Loan

When you borrow money from monzo, would that affect your credit score for a mortgage?

Credit score is a made up number.

But it will have an impact on your affordability.

5 Likes

Yes any loans taken out of hard searches will effect getting a mortgage and affordability as mentioned above.

A hard search is carried out if you accept the offer, which may impact your score.

1 Like

So for how long would my credit score goes up again after taking the loan or I have to make a full payment before I can be able to get the mortgage…

That’s not a question anyone can answer.

But if you got a loan that meant you had to pay back say £200 a month, then that would impact your ability to get a mortgage for the entirety of the loan.

When you get a mortgage your credit score has little impact. It’s more affordability related.

They want to see what you’re spending all your money on each month which is why they ask for 3 months of bank statements. Things like, car payments, fuel, nights out, subscriptions, new clothes etc… They want to assess that you can live comfortably (and their investment is well protected) with a mortgage payment should they lend you the money.

Don’t forget (if you’re a first time buyer) that when you own a home this comes with a huge amount of additional bills so they will be accounted for in the banks decision too.

You don’t need to take on credit to get a mortgage.

Mobile phone contracts, utility bills and things like car insurance paid off monthly can show reliability.

The more available credit you have, or ongoing repayments, can have an impact on your mortgage offer ie the amount you can borrow vs your other commitments.

Utilising your current credit, such as an overdraft or credit card responsibly, can show other lenders you can pay back what you’ve borrowed.

Using very little of your current credit, and paying back in full every month demonstrates you’re credit worthy.

The above is information pulled off the web and other sources, so wouldn’t take it as any form of financial advice.

A mortgage broker or similar, would be able to provide the most appropriate information for your circumstances to improve your chances of getting a mortgage later down the line.

If you have a high street bank it may also be worth speaking to them to see if they can offer any support.