Credit rating builder Loqbox takes its novel ‘savings-loan’ to the US
What better place to help people build their credit ratings?
UK fintech Loqbox is expanding to the US with the launch today of its credit rating builder in 40 states across America.
According to Loqbox US CEO Brent Matson, the service is now available to 80 per cent of Americans and who it can help to improve their scores.
“We believe people should have the opportunity to build their credit score and achieve their goals, but without paying for it. Currently, it can cost US consumers between $50 and $150 to build their credit scores—our solution is free,” said Matson.
For the uninitiated, Loqbox works by offering a kind of 12-month ‘savings-loan’ to those with poor credit ratings. The loan itself is always held by Loqbox, helping to keep the interest low, while customers repay the amount each month, helping to build their credit rating.
At the end of the year customers can either take their savings as a lump sum into a new bank account—the commission of which pays Loqbox’s fees—or pay a £30 fee to have their savings deposited anywhere, both of which lead to a boost on credit records.
If a customer can’t keep up with their Loqbox’s monthly savings goal, they can simply close their account at any point and have their Loqbox classed as ‘settled debt’ on their credit record, but miss out on the credit record boost.
Group co-CEO and co-founder Tom Eyre said: “Loqbox works best for people early in their financial life or for anyone trying to improve their relationship with money. When they have finished their journey, LOQBOX customers have a better credit score, a nest egg of savings and the ability to achieve their goals.”
Presumably the US, a country far more reliant and with far greater public understanding of credit and credit ratings than the UK, will be a much larger market opportunity for Loqbox.
In the UK Loqbox also recently launched a personalised financial plan service with additional tips based on their finances for improving their financial live, which Eyre says will also be coming to the US soon.