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Money expert reveals how to build credit score WITHOUT a credit card

A MONEY expert has revealed how you can build up your credit score without having to get a credit card.

A better credit score can increase your chances of getting approved for a loan or mortgageand even get you a cheaper interest rate when you borrow money.

Kia Commodore, aka Pennies to Pounds, has explained how a credit building tool works

Kia Commodore, aka Pennies to Pounds, has explained how a credit building tool worksCrédit: Kia Commodore/Pennies to Pounds
The 23-year-old graduate is helping young people understand money on TikTok

The 23-year-old graduate is helping young people understand money on TikTokCrédit: Kia Commodore/Pennies to Pounds

Kia Commodore shared the tip for improving your credit score in a video on TIC Tac, where she explained how to use a new type of credit building service called Loqbox.

You can improve your credit score by showing you can borrow money responsibly and pay it back on time.

This is commonly done using a credit card, but you have to spend money which can lead to debt and interest charges if you don’t pay it off each month.

Ms Commodore said Loqbox islike a savings account and credit builder in oneand that shepersonally used, tried and testedit herself.

The 23-year-old runs the account @penniestopounds and is also behind a financial literacy platform and podcast of the same name.

She explains in the video that Loqbox works like a loan you repay each month.

Let’s say I decide to make monthly deposits of £50,” dit-elle.

That’s £600 in total because you pay into Loqbox for a year. As I’m essentially paying back my loan, that helped improve my credit score, because I’m making regular and consistent payments.

At the end of the 12 months the ‘loanis paid off and I get that money right back.

After initially being sceptical about Loqbox, she was assured by the company’s work with several high street banks and checked that they are regulated by the Financial Conduct Authority (FCA).

Building your credit score without spending

Loqbox works by taking out a 0% loan for you, but locks it away so you don’t actually get the money and you can’t spend it.

When you repay the loan each month, Loqbox reports this to credit reference agencies.

In the UK that’s Equifax, Experian and TransUnion, and in the US where it also operates in 40 États, that’s Equifax and TransUnion.

Making these regular repayments on time can build your credit history and should make your credit score go up.

Because you don’t actually access the money from the loan, that cash is used to pay it back, and the money you arerepayingis put into a saving account for you.

At the end of the 12 mois, you’ve saved some cash and repaid a loan that can improve your credit score.

How to check your credit score

YOU see your credit report and score for a monthly fee with all three credit reference agencies: Equifax, Experian and TransUnion.

But there are ways to get it for free. It’s important to regularly check your credit report to spot any errors that may make it harder to get decent finance deals.

  • Equifax: Vous pouvez check your score and report for free for the first 30 jours, after which it’s £7.95 a month.
  • Experian: You can check your score for free using its online service. But if you want to check your report itself, you can only do this for free using a 30-day trial, after which you’ll be charged £14.99 a month.
  • TransUnion (formerly Call Credit): You can sign up to its Credit Karma service for free to get unlimited access to your report and score for life.

You also have a legal right to request a statutory report on data that credit reference agencies hold on you but this won’t include your score.

You can usually apply for this on a credit reference agency’s website or by post for free.

Alternativement, you can check your credit score for free using the following third parties:

Your savings are protected in an independently verified, ring-fenced account with Barclays.

But you won’t be protected by the Financial Services Compensation Scheme (FSCS) which protects individual’s cash in accounts up to £85,000 if a bank were to go under.

When it’s unlocked after a year, you get the money paid into a new bank account for free.

In the past this has included TSB, Starling Bank, RBS, NatWest, Shepherds Friendly and Pockit, but the accounts available can vary.

You can also to get the cash you’ve saved paid into a bank account you already have, but you’ll have to pay £30 to do that.

It’s not like a normal savings account mais, and you won’t earn interest on the money you’ve put away.

Ms Commodore told The Sun that she used Loqbox from January to December last year, putting away £50 each month.

By the end of the year she saved £600 and improved her credit score by around 100 à 150 points, but adds that there are other factors which can affect credit scores too.

I already had a good credit score but wanted to make it as good as it could be,” dit-elle.

No magic fix for improving your credit score

In the video she also warns about the risks of not keeping up with repayments: “Rappelles toi, as it’s credit, any missed payments will harm your credit score.

Loqbox says that it encourages all its users to complete the full 12 months and you can deposit between £20 and £200 each month.

But if you can’t afford a payment you canunlockearly by letting them know, and that means the loan will be repaid in full from the money locked away.

Missing a payment can harm your credit score, and unlocking early can too if you have not made enough regular payments.

Over a six month period LoqBox says users increase their credit score by 34 points.

Ms Commodore also warned that the there’s nomagic potionfor fixing your credit score overnight.

This will likely take six months to a year, so be patient,” dit-elle.

The money expert set up Pennies to Pounds in 2019 after graduating from University and now has thousands of followers on TikTok and other social media sites.

She set up the website to help others improve their finances and manage their money by budgeting, especially among young people, and has also appeared on the BBC.

You’re not taught this kind of stuff at school,” elle a dit au soleil.

Kia Commodore set up Pennies to Pounds to help people better understand money

Kia Commodore set up Pennies to Pounds to help people better understand money

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