A missed payment on your LOQBOX account can tarnish your credit score, leaving lasting impacts if not addressed promptly. The smartest move? Utilise any immediate savings to cover the due amount. Neglecting this can sway your credit history from improvement to deterioration.
But the real question lingers: what if on-time payment becomes an impossibility?
In the following sections, I delve into the intricacies of LOQBOX payments, their approach to missed payments and arrears, and offer essential tips to safeguard your credit score. What secrets and strategies will be revealed? Stay tuned.
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What is LOQBOX?
Loqbox is a tool that helps individuals to increase their savings and build their credit scores. This gives users access to better lenders as well as better rates. They report your monthly savings (which is referred to as a loan) to 3 of the largest credit reference agencies.
This includes:
- Experian
- Equifax
- TransUnion
When they report your monthly savings to these agencies, it proves that you can handle credit well. Thus, this increases your creditworthiness. Since they are only web-based, the company is also working on building an app. The process consists of 3 main parts which include:
- Saving
- Building your score
- Repaying a loan
How Does LOQBOX Work?
Loqbox stands as a unique bridge between saving and credit building. Here’s the straightforward process:
- Partnering with DDC: They collaborate with DDC Financial Solutions (its sister finance company). They provide the financial backing, making the system work.
- Borrowing Concept: As a user, you’re essentially borrowing from Loqbox, but DDC is the actual financier.
- The Digital Savings Voucher: This is where it gets interesting. You commit to saving a certain amount monthly. For example, save £50 monthly for a year, and your digital voucher equals £1200.
- Cash Swap Option: After 12 months, here’s the exciting part: swap your voucher for cash! You get back exactly what you saved, maybe even more with the interest.
Loqbox shines in improving credit scores. Each on-time payment is reported to credit agencies, boosting your credit history. It’s a great strategy for those with damaged or no credit history. It’s proof that you have made payments without delay for a debt.
However, missing payments can hurt your score. It’s like walking a tightrope – exciting yet risky. Also, note that in order to use their service, you should have a bank account. The DD will be applied automatically the moment you register.
However, there’s no credit check when you sign up, making it accessible to many. So, if you have a damaged or no credit history, this is a great way to improve it.
What Are The Benefits of LOQBOX?
Some of the major benefits of Loqbox include:
- It helps to build your credit score, which will be beneficial when it comes to saving money. This will make it easier for you to get credit cards, loans, and mortgages for better rates.
- It doesn’t matter if you have a particular financial goal in mind or not; they enable you to build your savings and help you through the process.
- You can also use it for free if you take up their lite membership option (You can get this by withdrawing to a new account with one of their partner banks).
- If you register for a full membership, it will help you to further build your financial health. Once you make a weekly payment of £2.50, you will also get access to Loqbox rent and Loqbox spend. Their rent option enables you to include your rent payments on your credit report. Whereas their spend option provides a credit account that is interest-free. Apart from this, you will also be able to access the latest financial advice, along with a tailored financial plan that helps to meet your goals and needs.
How Does LOQBOX Make Money?
In order to enable users to have access for free, they receive a commission from the partner bank, which you decide to pay your money into. If you don’t want to open a bank account, as suggested by them, you can take up the Flexi Unlock premium add-on. To use this service, you should pay £30. But receiving money in your own account will be possible.
LOQBOX Reviews
Loqbox has a mix of reviews on Trust Pilot. They have a rating of 4.6/5 and are praised for their excellent service. Some of their reviews are as follows:
“I’ve always been quite nervous, almost afraid of the whole topic surrounding credit and credit scores, but after finding LOQBOX, I now understand it all better and am amazed at how easy the whole system is. The LOQBOX site is so simple to navigate and understand. Really looking forward to seeing my score climb…read more” –Adrian Sutherland
“Such an amazing tool. If you find it hard to save money and struggle with your credit, lockbox is exactly for you. My credit score went from poor to excellent in 10 months!! I’ve never had an excellent credit score, so it was really an amazing moment for me. Not to mention I’ve saved more money than I have ever saved in my life…read more” –Ebz Jay
“Loqbox is helping me as a new immigrants in the UK to build my credit score and to save for the future. So I have spread the news to my friends so they know about loqbox and benefit from the services it offers. For me its credit score building…read more” –Caroline Phiri
“I signed up for loqbox months ago to help improve my credit score. I did everything the app asked, but my score never improved, so I cancelled it in July…read more” –Luke Frank Vigus
Do I Take Out a Loan Using LOQBOX?
Yes, when you sign up, it’s like getting a zero-interest loan. But, instead of receiving money, you get a ‘cash redeemable voucher’. Think of it as your digital piggy bank. DDC Financial Solutions steps in here, backing your voucher financially. Also, DDC provides the funds to Loqbox for you.
So, you’re not just saving money; you’re part of an innovative saving and financing model. But remember, while there’s no interest, commitment is key.
Is My Money Safe With LOQBOX?
Yes, your money is safe with Loqbox. This is because your money is stored in a Barclays bank account. So, the Financial Services Compensation Scheme protects you if something goes wrong with Loqbox and they have to shut down. Loqbox is also regulated and authorised by the Financial Conduct Authority (FCA).
However, it’s important to note that they were targeted by scammers in February 2020. Because of this, the personal and financial data of customers were put at risk. However, Loqbox reached out to their affected customers and advised them.
How Fast Will I See Improvement In My Credit Score?
Once you start to use Loqbox, you should start to see improvement within 12 months. But within the first 3 to 4 months, you will notice a difference. They also state that, in some cases, credit scores might drop before they start to improve.
So, if you notice it dropping instead of improving even when you’ve made payments on time, this is expected to happen. This drop is called a ‘Credit Tick.’ So, if you end up cancelling your account and leaving this period, you might have a worse credit score than when you first joined.
Can I Sign Up for More Than One LOQBOX?
No, it’s generally advised to stick with just one Loqbox. This is because having multiple accounts is like juggling multiple credits. It’s a risky move that could backfire on your credit score.
More Loqboxes mean more credit, potentially harming your credit history. It’s a bit like playing financial dominos – one wrong move can topple your efforts to build a good credit score. While multiple accounts won’t directly hurt your credit score, they can make managing your finances trickier. So, don’t take this decision lightly.
What If I Forget to Pay a Monthly LOQBOX Payment?
If you miss or delay a payment, Loqbox reports this to credit agencies. This isn’t good news for your credit history. Instead of building it, you might be knocking it down.
Late or missed payments are red flags for future lenders. It could make getting loans or credit cards tougher. So, try your best not to miss payments.
However, if you’re struggling to pay, you can consider ending your contract. No penalties, no fuss. You’ll even get back what you’ve saved so far.
If you’re struggling with a payment, contacting their customer support can be a wise move. They might decide to give you some time to pay, but this is not assured.
What Happens If I Miss a LOQBOX Payment?
Missing a payment on Loqbox is a significant event with a clear set of consequences. Firstly, a missed payment leads to a report to credit agencies. This can negatively affect your credit score, which is a crucial part of your finances.
So, in this case, consider closing your account. This will stop any hits to your score. Doing this will also help you to retrieve any savings accumulated so far. It’s a safety net when it comes to stopping its punch on your credit score.
However, if you pay the missed amount on the due date, they will consider it as the payment was made on time. This means no harm to your credit score.
Either way, informing customer service early on is a good step. Also, make sure to let your bank know about the Direct Debit situation. This will help stop the addition of any extra fees. This principle extends to other companies, such as Acorn.
Loqbox Contact Details
In times of financial uncertainty, having direct contact with Loqbox can be a lifeline. Their customer support team is equipped to offer guidance and solutions.
Whether it’s a query about your account or an urgent issue regarding a missed payment, reaching out to them can provide clarity and direction.
| Address: | Henleaze Business Centre, Henleaze, Bristol BS9 4PN |
| Website: | https://loqbox.com/ |
I’m Finding it Difficult to Pay. What Steps Should I Take?
If keeping up with payments becomes a challenge, consider cancelling your Loqbox account. This action prevents negative reports to credit agencies, protecting your credit history. Some points to keep in mind are as follows:
- Proactive Communication: It’s essential to reach out to customer support if you foresee payment difficulties. They can guide you on the best steps to take.
- Retrieving Savings: if you’ve made some payments, like £80 out of a £240 loan, you can get this amount back. They ensure you don’t default on the loan, safeguarding your credit score.
- Early Cancellation Implications: While cancelling early prevents credit damage, it also means your credit score won’t improve as much as it could have.
- Avoiding Worse Scenarios: Ignoring missed payments can worsen the situation. If a Direct Debit fails, it harms your credit score. To prevent this, keep in touch with your bank and Loqbox. First, reach out to your bank and stop the DD.
- Thereafter, speak to Loqbox customer support. But avoid doing this at the last moment. Make sure you take the necessary steps with sufficient time left for your next payment deadline.
Overall, external advice is invaluable. If you’re struggling with debt, organisations like Citizens Advice, StepChange, and National Debtline can offer expert guidance.
Key Points
- Loqbox works by acting as a bridge between saving and credit building.
- They Partner with DDC Financial Solutions for financial backing.
- Users save a fixed amount monthly, accumulating into a digital savings voucher. Timely payments improve credit scores; missing payments can harm them. No credit check on sign-up, making it accessible to many.
- Signing up equates to a zero-interest loan in the form of a cash redeemable voucher.
- Loqbox functions as a digital piggy bank, with DDC financing the loan. The arrangement requires a commitment to regular savings.
- It is recommended to have only one account to avoid financial strain. Multiple accounts can negatively impact credit scores due to increased credit. Also, handling more than one account can complicate personal finance management.
- Missed or delayed payments are reported to credit agencies, impacting credit scores.
- Terminating the contract is an option to avoid penalties and retrieve savings.
- Contacting customer support can provide potential payment flexibility. Proactive communication with Loqbox and banks is advised to manage Direct Debits.
- Early cancellation can limit credit score improvement.
- Seeking advice from debt advice organisations like Citizens Advice, StepChange, and National Debtline is beneficial.
