Article - Why going 'full Monzo' can damage your credit score

I commented over here:

More generally, I don’t like the credit reference system. But I understand why Monzo is incentivised to play along. Ideally, I’d like a system where my data genuinely belonged to me and I had discretion over who handles it and for what purposes. As I said above, I’d prefer for Monzo to send the minimum of my data to the minimum of organisations. But others have different views. And, for many, the current system (not Monzo, the way credit works in the UK) makes that very difficult.

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I am getting the point I think that like you say leave it they

I checked this with Monzo, and this is what they replied:

“When you open an account we run a soft credit check. This leaves a “soft footprint” on your credit report, meaning that it’s not something lenders are allowed to take into account when making lending decisions. You can read more about this on our blog.
We currently report to At the moment we only report to TransUnion (previously known as CallCredit). We chose TransUnion after carrying out a due diligence process with all the major credit reference agencies and deciding they were the best fit for us.
In the long run we aim to report to multiple credit reference agencies so we give our customers the best chances of being able to borrow but we’re not quite there yet.
Until we do, Monzo will only show up on your TransUnion credit report which you can view by logging into your Credit Karma account.
So you know, each agency has their own scorecards on how they estimate a customer’s credit score and certain factors on a credit file might weigh more favourably/negatively in one credit agency’s scorecards over another’s.
If you’d like to learn more about credit scores you can check out this blog post here. And this blog post here will tell you how to build your credit score. Let me know if you have any questions about this — I’d be happy to explain.”

So I guess the answer is technically yes. If you’re trying to get a mortgage or loan, and the lender doesn’t use the same credit agency that Monzo use, then you may be unable to borrow from that lender. So dependent on your immediate circumstances, it might be better to stick to your current traditional bank until Monzo increases, at the very least, to Experian.

This is out of date, isn’t it?

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Is it?? That’s what one of their agents told me on the chat… either way, I’ve gone running back to my traditional bank, and opted out of full Monzo for now.

Shame; it looked interesting.

Yep, that COp’s information is out of date :slightly_smiling_face:

Your credit’s going to take a real hit opening and closing accounts like that.

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When were you given that information?

Monzo still doesn’t appear on my Experian account. I subscribe to the paid account, and still nothing comes up for Monzo; just my old banks.

Oh no, I wasn’t leaving my bank, I was just moving my direct debits across to try the full experience offered. I’ve been with my old bank for a while, and still have insurances I was keeping.

But thank you letting me, either way.

I would assume it takes a few weeks for the data to propagate through and appear on your Experian report.

I see that @bfmuchengwa has found the Experian topic now, but for absolute clarity’s sake I’m going to paste in one part from the blog post.

The question:

The answer:

Although we’ve started sharing information with Experian, it’ll take a month or two for Monzo to appear on your Experian credit report.

(Emphasis mine.)

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I received it today, via chat. I migrated all my direct debits this weekend to Monzo, so panicked thinking that I needed to move them back as I want to buy a house later this year.

For all that I place no value in the CRAs, their bodguy numbers or what they provide, I do know that the location of Direct Debits has zero impact on what is reported to them.

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If that can help,
I can confirm that my two credit reports (Dec and January) went down 19 points from Credit Karma.
And the only new item in it is my monzo perso and joint accounts.
Same for my wife.

It’s not just new items that impact your score.

What about all your other accounts. I assume all those have changed too? EG. Loan, credit cards, mortgage, overdrafts, utilities. The amount you owe or have available will likely have changed over 2 months.

If absolutely nothing has changed then that is also a reason for it to go down. Also, you’ve opened a new credit account so that takes your score down too, it would happen with any bank.

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I say that nothing changed apart from that because it is the case :slight_smile:
I’ve heard that not having any change for a long time can in fact affect the credit score.
But feeding two new accounts to the CRAs, I believe that has changed the score.
that being said, as someone who worked in Financial markets, I must say it is counter intuitive to penalise an actor for being two stable :slight_smile:

There is a ‘Negative factors’ tab on your report. If Monzo is the culprit it should be listed under there :slight_smile:

I hate the whole system too :cry: It makes no sense that you have to get in debt to prove that you’re responsible to have money lent to you - thus increasing your score. Those who never get into debt should be rewarded as they budget and manage their money well in my opinion, instead they are sadly penalised for it. :man_shrugging:

Can we call the Guardian “Pravda” if this is allowed?

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What do you mean if this is allowed? Are we banning people from making jokes now? The telegraph is very Tory friendly, I am not sure why you think it shouldn’t be allowed to joke about it being the “Torygraph”. Try not to get worked out over things.