It’s not “ruining” the credit score (history), that’s for sure.
But everyone who’s gone full Monzo will potentially be affected at their old bank - preventing you from building/maintaining a great internal score with your (previously) main bank.
For example, if you banked with Nationwide but now leave the account dormant, any pre-approved offers etc will be less likely to happen.
They probably can still happen, based on the monthly feed the bank get from the CRAs (whilst you maintain at least 1 active credit product/current account with the provider) but it’s certainly less likely.
A bank that sees somebody getting paid by BGC every month £1,500 can by reasonably sure their net income is still around about £1,500. A bank that sees nada has to guess/use CATO (incredibly unreliable)/rely on the customer to give a truthful declaration. Slightly increasing the risk (most people are truthful, some aren’t)
Impact of moving to Monzo on most people in most situations is going to be tiny.
BUT I’d argue it’s be easier to get a Nationwide mortgage if you use a Nationwide current account - whether that’s through enhanced scoring (you run your CA brilliantly and they could love that) OR just less paperwork needing to be sent (if you have a main CA with them, you don’t need to submit bank statements) meaning it would speed things up.
I liked the car insurer analogy - it’s never a definitive “yes” or “no” either way, but each person certainly needs to weigh up the impact.
If you’re in your 30s or above with a stable job & existing mortgage, highly unlikely to make any significant difference in any application.
If you’re a young tenant with previous bad credit (or just a lack of credit), then lack of CRA data/internal bank data could well be the tipping point of you getting a ‘no’ rather than a ‘yes’.
Credit Risk is like Jenga - add a block for every ‘negative’ and eventually it’ll topple over and be a decline.