N26 Discussion & Feedback


#1495

N26 did hard and soft credit checks on me on the 8th as well.


(Dan) #1496

I wonder what CRAs N26 reports to?


#1497

Looks like it’s just Experian for now


#1498

Normal practise for all German banks? I’m Portuguese, I have an N26 account and in Portugal we don’t even have credit scores, so if they’re happy opening accounts in some markets without looking at any such score, then why would they need to do it for others?


#1499

Why would a phone company do a credit check? Credit scores just seem like a bunch of nonsense. Glad I don’t have to deal with any of that here in Portugal


(Richard) #1500

Contracts for mobile phones, when you take one out you’re taking out a phone on credit and for services provided. So they need to make sure

  1. You can afford it
  2. How likely you’ll pay up etc

(Punit Mannari) #1501

When they are giving you a 900 pound phone of course they will do a credit check


#1502

Many countries don’t have ‘credit scores’ France and Portugual are the prime examples that come to mind.


#1503

To be fair, in some countries, they won’t do a credit check if you present a credit card in your name (I guess the logic is if your credit worthy enough for a credit card, they can give you a phone). It’s a pretty common technique used by some of the phone companies in Canada for new immigrants that have no credit history.


#1504

You’re talking about getting a phone loan, not strictly a phone plan. That makes more sense


#1505

Phone companies are also offering a credit facility with postpay even if you don’t have a phone included, as you can rack up charges on top of your included allowance. + When you are roaming, it can sometime take days or weeks for the foreign network to notify your network of the usage (not much of an issue with data but more calls and texts).


#1506

Here in Portugal in general for a credit card with a 300 Euro limit or less they will just check with the Portuguese central bank if you don’t have any debt defaults, sometimes they’ll do that for up to 750 euro limits. When it comes to loans, up to 600 to 800 Euros it’s the same thing.

For more than that you also need to show income statements from the last 3 months and depending on what it is maybe have a cosigner. There are no “credit scores” or “credit checks”, there’s just math. It’s just a matter of using a formula to see how much they can lend you based on your income and expenses


#1507

Guess that’s not much of a problem here. At most you’re paying 25 to 30 Euros for a fully unlimited plan, including any roaming, so they don’t really care about maybe losing 30 Euros if you can’t pay

Additionally the law specifically forbids any kind of income or creditworthiness restrictions when it comes to standard utilities, in which mobile phones are included


#1508

Banks in the UK, Canada and US traditionally give much higher limits (especially in the US, where limits over 30k aren’t uncommon). In Canada, you especially need a higher limit as debit cards aren’t usually accepted online or overseas (as the domestic debit card network is just for card present transactions). If you don’t have a credit card with a high enough limit, you simply can’t buy it.


#1509

Don’t get me wrong, usually the limits they give are higher than that and you need to show an income statement for limits ranging from 600/800 Euros up to 5000, after which they may require a cosigner. The “normal” for a credit card is about 1500 euros.

And in reality, the opposite happens here, debit cards are accepted everywhere while credit cards still aren’t accepted in a lot of places. The vast majority of people don’t have credit cards


#1510

Yeah it’s kind of the opposite in Canada. Debit cards are accepted much less accepted (Can’t use them at hotels, on planes, at parking machines). The only benefit is that they are essentially fraud proof (chip and PIN only, sometimes having contactless) and are either free (or just 1 or 2 cents) to accept. Interac has pretty much the lowest fraud rate of any card network in the world.

Credit cards are more popular and it’s not unusual to get free cards with unlimited cashback with over 1.5% (and often 4% or 5% on Groceries, Restaurants or Gas).


#1511

Our credit cards have similar benefits, except that the cashback is usually on everything, not specific categories and there’s usually a cap on the cashback you may pay in a year, somewhere around 200 Euros in cashback. Even then, most people really don’t care about 1 to 5% in cashback and are very debt averse, probably due to 20th century history in Portugal

Coming from this context, a company making a credit check for a current account just seems insane


#1512

Indeed. Unnecessary, unless you’re applying for an overdraft.


#1513

Absolutely agree. Even tough most banks here in Portugal will give you an interest free overdraft of about 250 Euros without asking or checking for anything, doing a credit check when someone applies for an overdraft, no matter the amount is perfectly reasonable. Doing it for just opening a current account is not reasonable


(Jamie 🏳️‍🌈) #1514

Depends on if the account is designed to allow you to borrow without formally requesting it first.

Monzo has a absolute ‘no’ at –£20 where it will begin bouncing transactions. If N26 is designed to allow you to borrow without applying (in effect applying on–the–hoof) then I don’t see why N26 shouldn’t reflect that in its credit file search.