Is being fully Monzo ruining my credit score?

Monzo Chat
41

Good day Ordog

I think you misunderstood what I was saying. I agree that there is no reason why people on benefits or low incomes should not be on normal tariffs. What I was referring to was the practice carried out by some untility companies of not advising customers that there is a lower and more economic tariff available to them. This particularly affects the elderly and other vulnerable individuals who are not necessarily fully au fait with the Internet.This is also why we all encouraged to check if we are on the right tariff on a regular basis. I think in fact the utility companies are now under an obligation to advise customers if there is a better tariff available to them.

Before privatisation, which was intended to create more competition - but has not, there was more transparency. Now the major utilities ( gas, electricy and water ) are effectively private companies accountable to shareholders so there is a focus on profit, which is not always consistent with the provision of an essential public service.

BlueBird123

42

That sounds very different to what you were saying :confused: but thanks for clarifying :blush:

Not being on the right tariff can affect everyone, not just the elderly and poor but you are right. It’s just like when your phone contract ends and they don’t switch you to a sim only deal or tell you if you don’t need all that data/minutes.

Thankfully all of this is made easier with comparison sites and the Money Saving Expert take this one step further. They will message you when you’re paying too much for your energy so you only need to do it once :slight_smile:

I too hope that some legislation comes in soon, similar to the phone scenario I mentioned above I believe they have now been forced to do this already :thinking:

43

No :slight_smile:

I’ve been full Monzo for 18 months (I have other accounts that I don’t use) and my credit score has not fallen.

44

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.

45

I think this is a confusing issue that has been created by Monzo trying to use some edgy social marketing.

There is still a very big misconception that “FullMonzo” means you only use Monzo and nothing else - That sounds like how the OP has taken the term.

In that scenario, then yes, undoubtedly being “FullyMonzo” is affecting your credit score (as it’s highly likely you’ll be checking your Experian or Equifax scores).

If, like @urban, “FullMonzo” means you use Monzo as your main account, but still have the old accounts open, then the answer flips on its head, and it’s unlikely to affect your score.

46

I don’t believe your meaning of “FullMonzo” is true, as switching to Go #FullMonzo means that the other Bank Account gets Closed.

47

You don’t have to do a CASS switch, though.

48

It’s not my meaning.

It’s Monzos - At least… It’s the definition that has been given by Monzo staff numerous times on this forum.

1 Like
49

8 posts were split to a new topic: Should I move to Monzo?

57

Sorry, but I didn’t had the chance to read the full thread as I am at work :smiley: and maybe someone did already talk about this…
Does having a Monzo Plus impact your credit score? You have a contract and monthly payment thing :smiley:

59

I mean specifically…does Monzo Plus subscription work similar as a credit score “boosting” service does. For example like https://www.loqbox.co.uk/
You have 1 year service and you pay it off on monthly basis. Would this help people like loqbox does?
Just curious…

60

No, I don’t believe it would.

My understanding is that it’s not reported in the same way.

3 Likes
61

yeh, it probably isn’t considered “credit”… :confused:

62

I wouldn’t be too upset by it - Keeping your Monzo current account in good order will boost your Credit Karma score in the same way - You won’t be missing out on anything.

If you did want to boost your scores across the 3 CRA’s, you’d need to take financial products with other providers.

63

The CRAs score is meaningless, they are not lending you money. Each lender scores you differently and secretly.

64

I wouldn’t say meaningless as such (although I know what you mean).

For people who aren’t “into” their finances, they perhaps don’t know some of the things that would be seen in a negative light (age of accounts, financial history etc) - I think the completely made up “scores” can possibly help some people get a grip on things (providing it says why the score is low).

1 Like
65

@nickh But why some people have 900ish but they are not able to get a sim only contract and vice versa?

66

Wouldn’t even dream to guess what goes into these decisions, and I’m not saying your “score” is necessarily an indication of your financial history.

But if this forum is anything to go by, I think it’s safe to say that the vast majority of people are financially uneducated to a degree (I know I certainly am).

I wouldn’t get caught up on the “scoring” system, but if the scoring system makes an individual think about what they are doing with various contracts/bank accounts/credit cards for example, and makes them understand even a little bit about what might be good practice… Then it’s a good thing.

I’d love for there to be clearer guidelines on this stuff, but it’s the murkiest of waters when you start looking into it.

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67

I agree, I’m just saying “don’t worry if a silly number goes down/up” you just need to check your report and forget about the number.

68

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Guess where I did a current account switch service to monzo and closed my HSBC account.