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Loqbox’s first Impact Report, Building Better Borrowers, challenges assumptions about creditworthiness and financial inclusion, calling on lenders, fintechs and policymakers to build a better way into credit, where high-cost credit is no longer the default first step.
From pre-prime to prime: Loqbox data on almost 600,000 UK consumers points to a safer route into mainstream credit
Millions of people are locked out of mainstream credit with no clear way in.
Our first Impact Report, Building Better Borrowers, draws on data from more than 291,000 members, compared with more than 300,000 similar consumers who hadn’t used Loqbox. We found that when people are given an alternative way to demonstrate their financial reliability, they can build stronger credit profiles without relying on high-cost borrowing.
What our data shows
- Loqbox members who paid every month for a year, with no missed payments elsewhere, saw scores rise by around 73 points, while comparable consumers who didn’t use Loqbox saw no increase.
- Card holding among members new to credit rose from around 15% to over 46%, with balances stable at around £450.
- We’re calling on the financial services industry to create"a better way in", so high-cost credit cards are no longer the default route into credit.
Read Building Better Borrowers: Loqbox’s first Impact Report
The prime customers of tomorrow
The UK credit system works well for those already established in it. But between four and five million people have little or no credit history, more than 16 million have experienced adverse credit, and many self-employed people earn in a way that doesn’t fit the pattern lenders expect.
These consumers are usually labelled ‘sub-prime’, which describes where their credit file sits today and says little about the borrower they could become.
We call them pre-prime: people who haven’t yet had the chance to prove themselves, with many already doing the right thing.
Our new survey of 2,000 UK adults, commissioned alongside the report, found that nearly two-thirds (62%) have been declined for credit, a phone contract or a rental in the last two years. More than a third (37%) of those say they paid every bill on time.*
Where someone’s credit file sits today doesn’t tell us the whole story. People need practical ways to build a track record, demonstrate progress and show they’re ready for mainstream credit. How they get there matters too: building a stronger credit history shouldn’t mean relying on expensive borrowing along the way.
The cost of getting started
For anyone starting out, the standard advice is to take out a credit card, use it a little and repay it every month. But the cards most readily available to people with little or no credit history are among the most expensive on the market.
Our research found that almost half (49%) of UK adults have taken out credit they didn’t need just to build their score, and almost half of those (48%) struggled to repay it.*
This is the price of the ‘first-rung premium’: credit builder cards average around 36% APR, nearly double the 18.9% on student cards. Yet nearly seven in ten 18-year-olds hadn’t secured a university or college place by results day this year, so for many young people, that cheaper option isn’t on the table.
A product sold as a stepping stone can become a long-term cost, and the people least equipped to manage high-cost credit are often the ones most likely to be offered it.
For our CMO & Consumer Finance Expert, Dani Palmer, that’s why it’s important that people know there are other ways to start building a credit history:
"Being turned down for a phone contract or a flat can feel really personal, especially when you know you're managing your money as responsibly as you can. But it doesn’t always mean you’ve done anything wrong. Often the system just can’t see you yet.
"The good news is you don’t need to take on expensive borrowing to change that. Whether you’re starting out or getting back on track, the first step is knowing exactly where you stand. Check your credit reports with all three main agencies to make sure everything is accurate, register to vote at your current address and, if you rent, look into rent reporting.
"And you don’t need a high-interest credit card to build your credit. There are other ways to build a positive payment history, while developing savings, knowledge and financial confidence along the way."
What building better borrowers can look like
Our analysis of almost 600,000 consumers revealed that:
- Loqbox members who paid Loqbox every month for a year, and didn’t miss payments elsewhere, saw their credit score rise by around 73 points on average. Comparable consumers who didn’t use Loqbox saw no increase.
- Among members new to credit, credit card holding rose from 15% to over 46% (against 22% to 29% for comparable consumers), while average balances stayed broadly stable at around £450.
When people can build a track record without carrying high-interest balances, they arrive in the mainstream credit market better prepared, gaining access without a build-up of debt.
That’s what building better borrowers means to us: responsible access, rather than access at any cost.
Our Co-Founder and CEO, Tom Eyre, said:
"Millions of people shut out of mainstream credit are managing their money responsibly and could be the prime customers of tomorrow. They just haven’t had the chance to prove it on paper.
Our first Impact Report shows what can happen when they’re given a safer way to build a track record: stronger credit profiles, wider access to mainstream products and no build-up of debt along the way.
The task is not to lower the standards for accessing credit. It is to give more people a fair opportunity to meet them."
More than a score
The impact of a limited or adverse credit file goes beyond the score itself.
Our survey found that nearly half (43%) of UK adults say their credit history has delayed a major life milestone, including buying a home (21%), moving out (18%) or leaving a relationship (14%).*
For Loqbox members, the benefits go beyond credit scores too. Since 2021, over 370,000 members have saved more than £151 million, and 47% of surveyed members feel more confident about their finances.
Responsible behaviour often goes unseen by the credit system: rent paid on time, irregular but well-managed income, or a credit history built overseas.
Loqbox member, Declan Jarvis, moved to the UK from South Africa and works in finance. Despite being a UK citizen with no history of debt, he found he effectively didn’t exist to lenders:
"Every time I checked, it just said I didn’t exist. I literally live here, but the system refused to acknowledge me.
When I couldn’t pass a credit check for a flat, it suddenly felt really stressful, because I knew it would only get harder when it came to a car or a home. You assume if you’re sensible with money, it’ll all work itself out. It doesn’t."
The challenge goes beyond Loqbox, raising questions about the role UK Fintech can play in creating a more inclusive financial system.
Janine Hirt, CEO of Innovate Finance, said:
"UK FinTech is synonymous with putting consumers and customers first, driving a more inclusive, democratic and transparent financial services sector that works better for everyone. With cost of living pressures still weighing on many households, our industry has an important part to play in helping people become more financially resilient.
"First-time borrowers and those rebuilding their credit often have little choice, and what’s available doesn’t always suit their circumstances. Loqbox’s findings show what’s possible when saving and support sit alongside affordable credit. The next step is making sure that support reaches everyone who needs it."
A better way in
Greater access isn’t always a better outcome. Credit needs to be appropriate, affordable and offered when someone is equipped to manage it.
- That’s why Loqbox is calling for a better way in: an end to high-cost credit as the default first step, a restart of the FCA’s work on minimum payments, and updated guidance that reflects the range of ways people can now build a credit history and is clearer about the cost of the products most often recommended.
- Our research shows the public agrees: 91% say people should be taught other ways to build credit besides a credit card, and 84% say people shouldn’t have to take on debt to prove they can be trusted.*
By recognising progress, rewarding responsible behaviour and matching access to readiness, the industry can build better borrowers and give credit where credit’s due.
Read Building Better Borrowers
Explore the evidence behind our first Impact Report and what it means for the future of financial inclusion.
Turn financial inclusion into opportunity
We partner with lenders, marketplaces and organisations across financial services to help more people build their eligibility for mainstream financial products, while helping our partners grow their pipeline of future customers and build longer-term relationships.
About the research
Building Better Borrowers uses mixed methodology, including:
- Analysis of 291,050 members and 1.6 million credit observations for those who joined Loqbox between 2022 and 2024, tracked for up to 24 months from sign-up, linking each member’s payment record with Loqbox to the credit record held on file. Working with its partners, Loqbox compared these outcomes with a control group of more than 300,000 comparable individuals who had not used Loqbox.
- Surveys of over 2,000 Loqbox members.
- 23 in-depth interviews with current Loqbox members.
These findings are based on observational data. They show how outcomes differed between members who behaved differently, but they do not establish that Loqbox caused those outcomes.
*Consumer survey: Conducted by Attest among a nationally representative sample of 2,000 UK adults aged 18+, between 13th - 27th October 2026. Results were weighted by age, gender and location using Office for National Statistics (ONS) population data to ensure national representativeness. Figures are scaled to approximately 55.5 million UK adults aged 18+, based on ONS population estimates.
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