Credit Score at 18

cymruchris

Dylanm2002 said:

cymruchris said:

D3xt3r5L4b said:

Don’t use Loqbox

I knew you’d say that. 

I looked it up, it's not great, but it's a start. My only option right now are to get an arranged overdraft (With i've done) and a credit building product. (Loqbox) Which i've done. I've only done £20 a month so it's not really money i'll miss, it's worth a shot. If it doesn't increase my credit rating by much then at least I get my money back -£30 if I return it to my bank account.

Good - another step towards building a better credit file. The most positive impact comes at the end of the agreement when it gets marked as settled. As we've said - when you get to see scores - don't worry about them moving up or down, as it's the data that counts most. 

Dylanm2002

D3xt3r5L4b said:

Dylanm2002 said:

cymruchris said:

D3xt3r5L4b said:

Don’t use Loqbox

I knew you’d say that. 

I looked it up, it's not great, but it's a start. My only option right now are to get an arranged overdraft (With i've done) and a credit building product. (Loqbox) Which i've done. I've only done £20 a month so it's not really money i'll miss, it's worth a shot. If it doesn't increase my credit rating by much then at least I get my money back -£30 if I return it to my bank account.

You won’t know if it “increases your credit rating” unless you have insider knowledge on each lenders (commercially sensitive) lending criteria?

Also to get your money back from them you have to open one of their “selected” accounts - but again it begs the question whether you’ll be eligible to open said account dependant on a lenders views of you at the time. And the £30 “fee” is daylight robbery. 

Also with the overdraft, arranged or not, don’t ever dip into it.

What? It's a credit building product. Yes it will increase my credit rating. If not then they're wrongfully advertising? £30 isn't a lot. If it helps increase my rating, for which I can then get lower interest cards and potentially lower rate loans/ mortgage. Then it's completely worth it and will probably save me money in the long run.

[Deleted User]

What they say is that it will increase the number the CRAs give you.  They can't guarantee that will happen, as they have no control over it and the number isn't related to your credit worthiness.

They just work on the assumption that the type of person who responds to their proposition will try to manage their finances better, which may in turn change the number the CRAs hands out. 

Whether the Loqbox product actually changes the way that lenders view you is a more debatable point.

So they're not wrongfully advertising, but the average consumer believes they're promising something they're not - ie greater credit worthiness.

D3xt3r5L4b

Dylanm2002 said:

D3xt3r5L4b said:

Dylanm2002 said:

cymruchris said:

D3xt3r5L4b said:

Don’t use Loqbox

I knew you’d say that. 

I looked it up, it's not great, but it's a start. My only option right now are to get an arranged overdraft (With i've done) and a credit building product. (Loqbox) Which i've done. I've only done £20 a month so it's not really money i'll miss, it's worth a shot. If it doesn't increase my credit rating by much then at least I get my money back -£30 if I return it to my bank account.

You won’t know if it “increases your credit rating” unless you have insider knowledge on each lenders (commercially sensitive) lending criteria?

Also to get your money back from them you have to open one of their “selected” accounts - but again it begs the question whether you’ll be eligible to open said account dependant on a lenders views of you at the time. And the £30 “fee” is daylight robbery. 

Also with the overdraft, arranged or not, don’t ever dip into it.

What? It's a credit building product. Yes it will increase my credit rating. If not then they're wrongfully advertising? £30 isn't a lot. If it helps increase my rating, for which I can then get lower interest cards and potentially lower rate loans/ mortgage. Then it's completely worth it and will probably save me money in the long run.

Your “marketing gimmick” CRA score/rating may well “go up”.
Actually, if anything, it will drop once the Loqbox account is closed and settled.
But that doesn’t matter since lenders don’t use these numbers for anything in reality.

This is why the premise in which Loqbox and other companies are sold is completely immoral, misleading and wrong. 

cymruchris

D3xt3r5L4b said:

Actually, if anything, it will drop once the Loqbox account is closed and settled.

Mine went up once settled from Fair to Good on the month it was marked as such. There may have been other factors, but fairly certain it would have had a contributory effect. As I've mentioned numerous times - it delivers an account on your report that shows regular, on-time payments, and once settled, it shows lenders that you've had a commitment, stuck to it, paid it on time, and that you're likely to do the same with another financial product, so I would be hard pressed to agree with anyone that said this positive behaviour would have a negative impact on your history, particularly if you're someone with a very thin credit file.

But yes - ignore the scores. What you're trying to build is a pattern of good financial management - and that means doing all the things you are doing - Onto the electoral roll, getting a sim-only contract, using the (contentious) Loqbox, eventually getting a high rate credit builder credit card, using it, paying it in full every month, so that by the time you get 18 months from now, you'll have a more solid financial history that future lenders can review to enable their decisions. It's a combination of all that you're doing that will have the impact. No one factor will do it alone. 

Over the period - you'll see your scores drop down on one CRA but up on another, and then next month the opposite might happen. That's really nothing at all to worry about. Keep on with your plan, pay it all on time, don't miss any payments, and you'll soon build up enough history to eventually get a mainstream credit card, and eventually when needed a mortgage (subject to income requirements etc).

cymruchris

Deleted_User said:

Whether the Loqbox product actually changes the way that lenders view you is a more debatable point.

Lenders when reviewing credit files don't see who provides the credit - so it's just a report showing that a loan was taken out, and if paid monthly on time, that it was settled. Just like any other account it shows positive financial management on what otherwise might be a very thin or poor credit file. There can't be many lenders that would look at a report and say 'Oh they had a loan, paid it on time and fully settled it as per the terms of their agreement' and then think - 'Oh if that's the case we'd better not lend anything to them'. Compared to someone that has no history, or only poor history - if you were a lender which customer would you prefer to say yes to? It's not a product for someone with a bulging credit file with lots of cards, and a huge positive history, it's for those that have almost nothing on their report who are trying to show they're a decent prospect.  (Sorry to go off-topic a bit away from the OP's question - it's just that I've seen it knocked so many times when there are people it would be a benefit for - it's definitely not for everyone, and in fact it's not for the majority, but it does have its place)

bazzyb

Dylanm2002 said:

D3xt3r5L4b said:

Dylanm2002 said:

cymruchris said:

D3xt3r5L4b said:

Don’t use Loqbox

I knew you’d say that. 

I looked it up, it's not great, but it's a start. My only option right now are to get an arranged overdraft (With i've done) and a credit building product. (Loqbox) Which i've done. I've only done £20 a month so it's not really money i'll miss, it's worth a shot. If it doesn't increase my credit rating by much then at least I get my money back -£30 if I return it to my bank account.

You won’t know if it “increases your credit rating” unless you have insider knowledge on each lenders (commercially sensitive) lending criteria?

Also to get your money back from them you have to open one of their “selected” accounts - but again it begs the question whether you’ll be eligible to open said account dependant on a lenders views of you at the time. And the £30 “fee” is daylight robbery. 

Also with the overdraft, arranged or not, don’t ever dip into it.

What? It's a credit building product. Yes it will increase my credit rating. If not then they're wrongfully advertising?

Well, you said you didn’t have a rating at all as the CRAs couldn’t identify you, as you had no credit history for them to rate you on. So that shows that their advertising is not quite as it seems as how can you identify if your rating has increased or not if it didn’t exist to begin with?

Anyway, the point being made is that there are far better ways to get your history built up than using LoqBox - at your age it is expected that your credit file will be pretty thin, so it’s not a negative thing in itself as far as underwriters are concerned. You would be far better off just working to ensure you have a current account and phone bill showing, as well as being on the electoral roll. This is just adding something completely unnecessary for your circumstances. It’s an additional cost for pretty much no real benefit, and they hold your money to ransom until you’re forced to open an account of their choosing which, of course, they will receive a commission for you setting up. 

[Deleted User]

cymruchris said:

Deleted_User said:

Whether the Loqbox product actually changes the way that lenders view you is a more debatable point.

Lenders when reviewing credit files don't see who provides the credit - so it's just a report showing that a loan was taken out, and if paid monthly on time, that it was settled. 

That's correct. But we also tend, particularly in the sub prime market, to give less credence to the pseudo loan products, which are fairly easy to identify via the low value amounts.

The loqbox idea is just a new variation on the concept of paying £5 a month for a credit card that was popular around 6 years ago. It's not that we view it poorly, but just recognise it as a somewhat artificial construct.

You're right that having some history is better than none. But some types of history are better than others.

cymruchris

Deleted_User said:

cymruchris said:

Deleted_User said:

Whether the Loqbox product actually changes the way that lenders view you is a more debatable point.

Lenders when reviewing credit files don't see who provides the credit - so it's just a report showing that a loan was taken out, and if paid monthly on time, that it was settled. 

That's correct. But we also tend, particularly in the sub prime market, to give less credence to the pseudo loan products, which are fairly easy to identify via the low value amounts.

The loqbox idea is just a new variation on the concept of paying £5 a month for a credit card that was popular around 6 years ago. It's not that we view it poorly, but just recognise it as a somewhat artificial construct.

You're right that having some history is better than none. But some types of history are better than others.

I do agree completely in terms of the totals - I do think the higher the value the better - which was primarily why I chose to do the maximum level - the £200 a month one - where the total paid over the year was £2400. I'm sure that had a more positive impact than if I'd done it at £10 a month and £120 over a year. But yes - it's definitely better than no history.  It's a tool in the toolbox that's suitable for some people. 

Dylanm2002

bazzyb said:

Dylanm2002 said:

D3xt3r5L4b said:

Dylanm2002 said:

cymruchris said:

D3xt3r5L4b said:

Don’t use Loqbox

I knew you’d say that. 

I looked it up, it's not great, but it's a start. My only option right now are to get an arranged overdraft (With i've done) and a credit building product. (Loqbox) Which i've done. I've only done £20 a month so it's not really money i'll miss, it's worth a shot. If it doesn't increase my credit rating by much then at least I get my money back -£30 if I return it to my bank account.

You won’t know if it “increases your credit rating” unless you have insider knowledge on each lenders (commercially sensitive) lending criteria?

Also to get your money back from them you have to open one of their “selected” accounts - but again it begs the question whether you’ll be eligible to open said account dependant on a lenders views of you at the time. And the £30 “fee” is daylight robbery. 

Also with the overdraft, arranged or not, don’t ever dip into it.

What? It's a credit building product. Yes it will increase my credit rating. If not then they're wrongfully advertising?

Well, you said you didn’t have a rating at all as the CRAs couldn’t identify you, as you had no credit history for them to rate you on. So that shows that their advertising is not quite as it seems as how can you identify if your rating has increased or not if it didn’t exist to begin with?

Anyway, the point being made is that there are far better ways to get your history built up than using LoqBox - at your age it is expected that your credit file will be pretty thin, so it’s not a negative thing in itself as far as underwriters are concerned. You would be far better off just working to ensure you have a current account and phone bill showing, as well as being on the electoral roll. This is just adding something completely unnecessary for your circumstances. It’s an additional cost for pretty much no real benefit, and they hold your money to ransom until you’re forced to open an account of their choosing which, of course, they will receive a commission for you setting up. 

The main thing isn't it improving my credit rating, I know for a fact that it will help as it shows I have stuck to an agreement and paid on time. The main thing this will help with will be so the CRA's can verify my identity, so I can apply for some sort of credit.