The Top Credit Builder Tools for 2022
Credit building has never been more important as we enter a new year coming off of a tough year in which the UK economy contracted by 11.3%. The financial benefits of having good credit are abundant, but don’t panic if you have poor credit. There are more options than ever before to help you build credit and get on track to improving your financial wellbeing.
In this article, we will take a look at some of the best credit builder tools for 2022 in three areas:
- The 5 Best Credit Building Apps for 2021
- Top 5 Credit Building Cards for 2021
- The 3 Best UK Credit Builder Loans in 2021
It’s important to note that there is no magic wand you can wave that will build your credit instantly. The most important thing to do is to remain focused and stick to the plan. It’s also a best practice to regularly monitor your credit score as you work to build it — this can be done for free.
The 5 Best Credit Building Apps for 2022
- Pave App: Pave builds your credit score using a monthly membership fee. The app has over 100,000 users and can build your credit score with all major UK Credit Reference Agencies (Experian, Equifax and TransUnion). You can also see and track your credit score in the app.
Cost: there are two memberships for either £5 or £9 a month depending on how many agencies you want to report to and if you want to see your credit score
- Self: Self is an app-based service that allows users to create a credit builder account. The app has a rating of 4.9 out of 5 stars on the iOS app store and allows you to choose the payment terms and amounts owed (starting at £25/month). Payments are reported to the three major credit reference agencies.
Cost: flexible starting at £25 per month and up
- CreditLadder: CreditLadder is an app that helps use your monthly rent payments to build your Experian or Equifax credit history (or both for £5/month). Homeowners use regular mortgage payments to help improve their credit and CreditLadder is finally helping renters gain similar credit benefits. CreditLadder has a TrustScore of 4.7 out of 5 stars and also reports your rental history to one of the largest UK mortgage lenders. If you are a first-time homebuyer, using this app gives you access to better mortgage rates with Nationwide.
Cost: Free to report to 1 credit reference agency, but they also offer paid versions. If you’re willing to pay £60 up front for a year (£5/month) or £8/month you can report to both Experian and Equifax.
- Bits: Bits is another app-based credit building service that boosts your Experian credit score using, what they call ‘a digital credit-builder card’. The app has a rating of 4.6 out of 5 stars on the iOS app store. Keep in mind that Bits warns it is not a service for everyone — they do not recommend you use their app if you have current debts, are behind on bill repayments, have declared bankruptcy recently, or if you are struggling financially.
Cost: Fees range between £2-20 per month, depending on your arranged payment plan.
- LOQBOX: LOQBOX is a tool that works to build your credit score over the course of a year using a 0% APR ‘digital loan’ which you pay off each month. Essentially, the service allows customers to select an amount between £20 and £200 that they can afford to save each month and uses the monthly payments against the loan. At the end of the year, they return your money to you in full. LOQBOX is a browser based product but has a rating of 4.2 out of 5 stars on trustpilot. LOQBOX was the target of a data breach in March of 2020 where hackers accessed customers’ personal data – such as addresses, phone numbers and payment information. While the process offered by LOQBOX can help your credit score, they advise that missing a payment will negatively affect your score. Cost: They have 2 options which range from free to £30 per month if you don’t open a new account with them.
Top 5 Credit Building Cards for 2022
- 118 188 Money Credit Card: The 118 188 Money credit card charges no fees on a wide range of transactions from spending abroad to balance transfers and late payment fees. Instead, you’ll be charged a flat monthly subscription rate ranging from £8 to £17 a month, depending on the credit limit you are approved for. As your credit score improves, you will be offered a higher limit and a higher subscription cost as a result. This card carries the equivalent of a representative 34.0% APR (variable) interest rate when calculating the cost of the subscription rate.
- 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. If you make all your payments on time for the first year, it offers a 3% interest rate reduction. Gain an additional 2% reduction in rates the next year if you do it again. This card carries a representative 33.9% APR (variable) interest rate.
- 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 £1,500 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 29.3% (variable).
- NewDay Aqua Credit Card: The Aqua card has a few excellent perks including 0% interest on spending for the first four months and a seven-month period allowing 0% balance transfers, with a one-time transfer fee of 3% based on the amount of debt you transfer to the card. This might be a good card to consider if you have balances on other cards that are accruing high interest. The classic Aqua card carries a 37.9% APR representative (variable) rate.
The 3 Best UK Credit Builder Loans in 2022
Credit builder loans can be a good alternative to credit builder cards which are known for carrying higher-than-average annual percentage rates (APR) and lower credit limits. Credit builder loans are typically available at smaller financial institutions like credit unions, community banks or online lenders. For this reason, it’s important to find a credit union in your area. But because credit unions tend to be so localized, we will focus on three major markets in the UK:
- London Mutual Credit Union: offers a competitive credit builder loan product with a TrustScore of 4.6/5. London Mutual offers a mobile banking app and serves Lambeth, Southwark, Camden, Westminster and members of the armed forces. You can use their online loan calculator to gain clarity on monthly repayments for their credit builder loan offering.
- Capital Credit Union in Edinburgh: offers a great credit builder loan to help its members gain access to things such as better mobile phones, car hire, or house rental agreements. Capital Credit Union serves those who work or live in East of Scotland or members of Community Trade Union — visit their website to learn more about eligibility.
- Cardiff & Vale Credit Union: offers credit builder loans and loans to consolidate credit to its members. They focus on serving those who live or work in either Cardiff or Vale of Glamorgan and have very flexible eligibility rules.
Pave: Build Healthy Credit
Pave offers a simple and easy way to build your credit score with Experian, Equifax and TransUnion. Join a community of 300,000+ members. We work with all major UK Credit Reference Agencies to build your credit score. We pave the proper path to good credit.