The Pot Overdraft


#1

Ok, bear with my rambling logic here before saying it makes no sense.

A future facility, where users with poor or no credit score, can arrange an over draft facility to match a “locked” pot, where monzo open an overdraft to match the pot or the pot times a small multiple say 1.2.

Firstly, help build a credit score for most showing they have an overdraft on credit report

Secondly, help monzo have security of the amount lent from the pot balance, if user doesn’t clear to above 0 within a timeframe.

Thirdly, helps user get money skills and trust which also having a saving pot

Similar concept to credit unions that often lend you x times your savings balance.

It would also give some revenue with overdraft fees if used. In head seems like a good scenario for user and monzo, at same time of giving people with checkered past chance to speed up building their future (in credit file sense).

Hopefully my suggestion has been explained logically!


#2

Good idea.

APS Financial provide a scheme thru CashPlus where the monthly fee is covered by a loan, so instead of paying your monthly fee you pay exactly the same amount into a Credit Builder Loan, and as long as you pay each month on time they report it back to the credit reference agency so keeping up payments helps improve your credit file. If you miss payments, or stop payments, they report that back and it will be a black mark on your file, making it harder for you to get credit.


#3

That sounds like good logic also !