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Original poster

Is there any point trying to build my credit if I'm unemployed?

10 replies

TidyupPutaway · 01/12/2023 08:30

I'm on sickness benefits. Not likely to change in the future.

I've been trying really hard to sort my debts and am now debt free.

My credit score is poor. 680.

I joined Loqbox to try and boost it into 'fair' by saving £20 a month, I also am paying for their £10 a month £500 'loan' boost and am going to register my rent payments.

However I've just logged into Experian and it says my chance of a loan 0%, my chance of a good interest rate credit card 0% and my chance of a credit building poor interest rate credit card is 0%.

Most of my status is green apart from Amber 'no credit on file' and red 'unemployment'

Is there even any point?

I just wanted to get to the point where I could get a contact phone or have a credit card for emergencies or even one day finance a car but it just seems like I'm wasting my time?

OP posts:
Original poster
TidyupPutaway · 01/12/2023 08:32

Basically I'm just asking if now that my debt is gone is it worth paying into Loqbox (£30 a month) to try and build credit

Or should I just forget about my credit score because I can't improve it whist too ill to work?

OP posts:
WYorkshireRose · 01/12/2023 08:34

If you've only just got out of debt, how can your credit file be showing no credit on file. What was the debt?

Original poster
TidyupPutaway · 01/12/2023 08:47

It was virgin media I owed money to (a broadband/telephone debt) and a catalogue debt that was from 2014 years ago so hasn't been on my credit file for years

OP posts:

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IamSmarticus · 01/12/2023 09:49

Saving won't increase your credit rating, it is a record of how you manage credit - so loans, credit cards and things like that. Spending £20 on a credit card and paying it off in full every month would do more to increase your credit rating.

You definitely don't need to pay anyone £30 per month, the only thing that will achieve is that Loqbox will get richer!

IamSmarticus · 01/12/2023 09:54

Sorry, just realised you can't get a credit card at the moment, I still wouldn't bother with paying Loqbox. Whilst you are unable to work, you probably will not be able to get car finance etc anyway.

Original poster
TidyupPutaway · 01/12/2023 11:03

IamSmarticus · 01/12/2023 09:49

Saving won't increase your credit rating, it is a record of how you manage credit - so loans, credit cards and things like that. Spending £20 on a credit card and paying it off in full every month would do more to increase your credit rating.

You definitely don't need to pay anyone £30 per month, the only thing that will achieve is that Loqbox will get richer!

Loqbox shows up as credit.

They basically 'loan you the amount on paper but you can't access it. Then you pay 20 a month, which they register to credit files as a loan repayment and at the end of the 12 months you get your money back.

I can't even get a 50% interest credit card for people with poor credit.

OP posts:
Tiredbehyondbelief · 01/12/2023 11:06

It could take 3-4 months for any changes in circumstances to show up in credit agencies. I would definitely persevere

BarbaraofSeville · 01/12/2023 11:32

They basically 'loan you the amount on paper but you can't access it. Then you pay 20 a month, which they register to credit files as a loan repayment and at the end of the 12 months you get your money back

Does this cost anything except the interest that you would have got if you'd have saved £20 pm? I've never heard of it.

Don't worry about your credit score. It doesn't mean anything. There are other ways of obtaining credit such as from the bank you have your current account with, if they offer credit cards, they might give you one based on your account conduct and seeing regular payments coming in. There's also 'credit builder' credit cards (look on Moneysaving Expert). Or some current accounts allow a small interest free overdraft, which could be used to overcome any temporary cashflow problems.

Also, if you're now out of debt, that means that, if you should be able to save money each momth to act as an emergency fund - get the Help to Save account for the bonus.

No-one needs a contract phone, SIM only is much cheaper anyway for exactly the same service, so that's not something to aspire to.

Original poster
TidyupPutaway · 01/12/2023 12:01

I have a basic bank account with no overdraft.

No it doesn't cost anything. I put 20 a month in and at the end of the year I'll get 240 back, but of you don't have a specific bank then you have to pay £30 release fee but my bank is one of the free ones.

You can save as much as you want.

And sign up and pay £10 a mo th to increase the 'loan' amount.

Again you don't actually get to spend the money, it just registers as a loan on paper and the only repayment is supposed to show responsible payments.

OP posts:
cleaninglady123 · 01/12/2023 17:21

There is no harm in using LoqBox but you are probably not going to get any decent rate credit if you are unemployed.

Be wary of using any other 'credit builder' type services similar to LoqBox as they are mostly a rip off.

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