Why does Loqbox Save show in my credit file as a loan?
Your Loqbox Save is financed by a 0% interest loan from DDC Financial Solutions. This is how Loqbox Save helps you to build your credit history.
To build your credit score, you must take out credit and make the monthly repayments on time and in full. This proves you’re creditworthy to future lenders, which is what a credit score is used for.
So, when you set up Loqbox Save, you selected how much money you wanted to save each month, and this became your monthly savings payments. You were then issued a digital savings voucher that costs one year of your monthly savings payments.
Once you selected the value of your Loqbox Save, you used 12-month interest-free finance from our sister finance company, DDC Financial Solutions, to buy it. This transformed your monthly savings payments into finance repayments which means that each payment builds your credit history, showing future lenders that you can responsibly manage finance.
Each monthly repayment reduces your finance balance. As your finance balance reduces, the amount you would receive from unlocking your Loqbox Save increases by the same amount.