TSB Announces New Way To Build Credit History

TSB is partnering with start-up ‘LOQBOX’ to provide UK consumers with alternative options to build their credit history that doesn’t rely on spending and paying off debt but instead building their savings.

TSB’s Product Manager, Will Langdon-Davies struck up a conversation with entrepreneur Tom Eyre at their local pub in Bishopswood about the lack of options available to help people build their credit score.

Soon Tom, with his business partner Gregor Mowat, were at TSB’s office in London discussing what they had developed and how LOQBOX would help customers build their credit history by transferring their savings into monthly finance payments – similar to cash-secured lending.

So how does it work?

Customers select a certain amount each month – between £20 to £500 – that they want to save over the course of a year.  They then purchase a LOQBOX digital savings voucher worth 12 times this monthly savings commitment. Instead of buying their LOQBOX outright, they use 12-month interest-free finance to buy it. The finance payments are equal to the monthly savings commitment they signed up for and, because they are reported to the three main UK credit reference agencies, lenders can see that the customer is a responsible borrower who can manage credit.  At the end of the 12 months, not only has the customer built up a strong credit history, but they get their lump sum of savings returned to them.

TSB’s Product Director, Jatin Patel says: “At TSB, we’re always looking at solutions that help bring more competition to UK banking and ultimately make banking better for all UK consumers so when Will presented what LOQBOX had to offer we knew we wanted to be a part of it. LOQBOX’s solution will improve financial inclusion for a number of people.

“LOQBOX will give hundreds of thousands of consumers who don’t have a good credit score, through no fault of their own, the opportunity to prove that they are creditworthy.  For example, people who’ve never borrowed in the past, people who are new to the country, ex-members of the armed forces, and the growing younger consumers who are applying for credit for the first time will no longer be credit excluded.”

Tom Eyre, CEO and co-founder of LOQBOX says: “At LOQBOX, we’re delighted to partner with TSB, a bank with a strong social purpose and a fantastic, disruptive, challenger brand that really appeals to our users. We are passionate about helping make the financial system work for everyone, including those who have been excluded from it. This partnership with TSB is yet more proof that co-operation within financial services can lead to a more inclusive system for everyone.” 

LOQBOX also recently took home the accolade for Digital Agenda Impact Award for Financial Inclusion. The award recognises its achievements in fixing financial inclusion through the use of tech for good.  

The best part of the LOQBOX solution is that if for any reason customers can’t make a payment or don’t want to keep saving, they can simply ‘unlock’ (redeem) their LOQBOX and cash out early, without penalty and without damaging their credit history.

LOQBOX funds are stored in a UK bank account that is fully ring-fenced and also has FSCS protection for each LOQBOX user.