Building credit can feel like you’re stuck in a vicious circle. You’re told to apply for a credit card or take out a loan so you can prove you’re capable of paying it back. However, very few providers will offer you a loan and the ones that do only offer a loan with sky-high interest rates. If you have less than stellar credit and are at your wits end, don’t despair. There are various credit building apps, cards and monitoring services you can use to get out of this cycle.
There are different ways to build your credit. You can get apps that will guide you through the process of building credit or a credit builder credit card. In addition, you should always monitor your score so you’re the first person to know if anything changes. There are various services that can help you build credit so we have run through a comparison of the best credit building and monitoring options for 2020.
4 Credit Builder Apps for 2020
Portify has partnered with Experian to provide credit score building and interest-free loans. The app allows for balance prediction and income management to ensure you never miss another bill payment. Each monthly subscription payment and loan repayment on the app is reported to Experian and builds positive credit history.
Cost: £4 per month for a standard account; the Portify Plus account costs £7 per month.
Bits: Bits is a digital credit building service that also boosts your Experian credit score. They also build your credit by reporting monthly payments to Experian. Keep in mind that Bits warns it is not a service for everyone — they do not recommend you use their app if you are heavily indebted, behind on bills, have declared bankruptcy recently, or if you are generally struggling financially.
Cost: Fees range between £2-20 per month, depending on your account.
LOQBOX is a tool that builds your credit score over the course of a year so you can access more lenders and better rates. LOQBOX reports to all three credit agencies. To use the service, you tell LOQBOX how much you think you can save in a year. This amount is locked away in a 0% APR loan which you pay off each month. At the end of the year, they return your money to you in full. While this process can help your credit score, they advise quitting immediately if you miss a payment, as missing a payment will negatively affect your score.
Cost: They have 3 packages, each with different benefits, which range from free to £10 per month. If you want to access your money, but don’t open an account with them, they charge an additional £30.
CreditLadder is an app that ensures your rent payment each month builds your Experian credit history. Where mortgage payments have helped homeowners improve their credit, renters have largely been left behind. CreditLadder also reports your rental history to one of the largest UK financial institutions, Nationwide. If you are a first-time homebuyer, using this app gives you access to better mortgage rates with Nationwide.
Cost: Free to tenants, but they offer a paid version (£9/month) where you can save more money and access free mobile phone insurance.
5 Credit Builder Accounts for 2020
Barclaycard Forward Credit Card:
This credit card offers a minimum credit limit of £50 and a maximum of £1,200. Other features include a 0% interest on purchases for the first 3 months. IIf you make all your payments on time, it offers a 3% interest rate reduction.
Vanquis Bank Classic Credit Card:
Vanquis presents opportunities for credit limit increases after your 5th statement, with more incremental ones every 5 months up to £4,000. The minimum credit limit is slightly higher than the Barclaycard at £150, with a maximum of £1,000 and a representative 39.9% APR (variable).
Vanquis Bank Chrome Credit Card: This card is very similar to the Vanquis classic card, but with a higher minimum credit limit (£250). It also carries a lower APR at 29.5% (variable).
Tandem Journey Credit Card:
Tandem touts their journey credit card to be the ‘perfect travel partner’. While 2020 hasn’t been the greatest year for travel, it may be handy to have in the future. Transactions abroad do not have an extra withdrawal fee and currencies are converted at the standard Mastercard exchange rate. This card has a minimum credit limit of £500 and a max of £1,500, with a representative 24.9% APR (variable).
Tesco Bank Foundation Clubcard Credit Card:
This card allows you to collect Tesco Clubcard points when you spend money both in and outside of Tesco, which gives discounts on future Tesco purchases, dining out, hotels, and other travel expenses. Credit limits are between £250-1,500 with a representative 27.5% APR (variable).
4 Free Credit Score Apps to Check Your Credit Score
Credit Karma’s app allows you to compare offers for credit cards, auto loans, home loans, and more without hurting your scores. They offer credit monitoring, provide insights on what affects you most, and make personalised recommendations.
They are one of the most trusted scoring systems in the UK and offer free credit reports as well as personalized tips on how to get your finances in tip-top shape.
ScoresMatter provides free credit reports and credit monitoring, a loan affordability assessment to see what you might be able to afford, as well as a dark web scan for additional online protection against identity theft.
In addition to credit reports, they offer educational materials to help you understand your report, how to improve your score, and, if you’re a business owner, how to prepare to apply for business lending.
Article contributed by Portify, the UK Credit Builder App