How to build a credit history

TSB has teamed up with start-up financial services firm LOQBOX to give UK consumers alternative options to build their credit history.

It comes after TSB product manager Will Langdon-Davies struck up a conversation with entrepreneur Tom Eyre about the lack of options available to help people build their credit score.

Soon after, Mr Eyre and business partner Gregor Mowat went to TSB’s offices in London to explain how their LOQBOX system could help people transfer savings into monthly finance payments, similar to cash-secured lending.

“This solution will improve financial inclusion”

Customers choose an amount each month, between £20 to £500, they want to save over the course of a year.

They then buy a LOQBOX digital savings voucher worth 12 times this monthly savings commitment. Instead of buying their LOQBOX outright, they use 12-month interestfree finance to buy it.

Because payments are reported to the three main UK credit reference agencies, lenders can see the customer is a responsible borrower who can manage credit.

At the end of the 12 months, not only has the customer built a strong credit history but they get their lump sum of savings returned to them.

TSB product director Jatin Patel said: “We’re always looking at solutions that help bring more competition to UK banking and, ultimately, make banking better for all UK consumers.

“LOQBOX’s solution will improve financial inclusion for a number of people.”