Unfortunately I’m leaving Monzo

Monzo Chat
110

I do and I don’t Nick.

For the likes of you and I, whom have credit experience it’s no issue really. But for 18-20’s whom can’t get credit (should they actually need it) then any positive financial reporting is going to benefit them.

I have discounted mortgages here as as suggested earlier In the chain, the lenders complete a much more thorough review which includes applicants providing bank statements etc.

Although my broker did require a copy of my full credit report prior to finding me a great mortgage deal, but that was self sent so a TU report would have been fine.

My theory here is companies should do the least harm they can. If a major contingent of Monzo’s users could and would benefit from reporting into more than just TU, and it does not cause significant financial detriment to Monzo to do so then maybe they should?

I’m of course not in possession of the facts and there is likely more at which is why I am interested in why Monzo do not already do this.

Conversely it would be interesting to see which banks report to which CRA’s.


HoldenCarver
Nick
Crowdfunding Investor

    7 November

I think you’re overstating the effect Monzo will have on credit scoring.

When I was a teenager I was advised that it didn’t really matter which bank I was, that the better positive effects came from having credit cards and paying them off each month, as this would be what would improve my credit score by demonstrating I could manage credit responsibly.

Mobile phone contracts and household bills are another way of helping build a good credit record also, as I understand it.

There are now a number of people who are full Monzo who have made house purchases, for example, and this hasn’t affected their ability to do so.

111

And that’s what I would want to understand Sam.

You are of course right and it doesn’t represent a big risk to him at the moment but of course if Monzo had a plan to do so and they made this public it would be great to hear.

112

They’ve said it’s something that they’d like to do in the future:

As others have said, there are far better ways to building your credit score from scratch :slight_smile:

113

There is nothing counterproductive to your Nephew opening a Monzo account and keeping his Legacy one open.

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114

I feel you’ve done your nephew a disservice

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115

Exactly!

I think he has mislead him on the importance of a credit score.

The credit score itself is meaningless, it’s the data underneath that’s what people look at. As long as you pay your bills, credit card balances off and don’t make a lot of ‘hard searches’ in a short space of time his nephew will have no issues getting a mortgage later down the line.

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116

I agree Cameron, but think broader than my family here.

It’s not an unreasonable question to ask of Monzo.

I’m an advocate for making the younger generation much more financially savvy. All I’d like to see is if there is a commitment to reporting into other CRA’s or not.

117

Admirable, but if you were really wanting to educate younger generations you wouldn’t advocate the importance of debt.

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118

Yes and that is a big part of what we should be educating them about. But we have to be realistic in that debt of some kind or another will be a factor.

Learning to manage this properly and having access to the best possible financial products Is going to have to be a reality for many.

119

Back on topic…

I wonder if the OP has left yet :thinking:

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120

Regulars will know that I’m not a fan of credit reference agencies. I dislike my personal information being shared without my consent to what are largely unaccountable, private companies.

But I acknowledge that that’s the way the world works today and there would need to be done serious thinking about how to change it.

That said, I think you’re overstating the importance of Monzo reporting to credit reference agencies. I presume that the people you won’t be recommending Monzo to would have no credit anyway. So all a credit reference agency would be doing is establishing the time that someone has banked with an organisation. I can’t imagine that that would be a significant factor in agreeing credit.

As others have said, getting a credit builder credit card will get the outcome that you want in a better way.

You should also think about the inherent trade-offs. Monzo (or Dozens or another new bank) might be better for folk in terms of budgeting and money management. While it’s important for people to have all the facts, they need to balance the pros and the cons. In my view there are no cons to Monzo reporting to only one credit reference agency, whereas there are many pros to having a Monzo account.

Others’ mileage will vary, of course.

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121

And regulars will know I’ve been encouraging Monzo (along with @Throwingspoon), to report to ALL CRA’s, which I just feel should be a given (for me, the potential downsides are negated by the potential upsides - In a different world I’d be happy for none of my info to be shared).

Monzo had said they would do it in early 2019, which was pushed back to late 2019, and now it seems like it’s off the radar (it costs more money at the end of the day, and isn’t a priority for them).

But in this instance, I agree with @Peter_G and others (for your specific situation @Fenn).

If you are purely concerned with credit history for youngsters (and you are right to be IMO), having, or not having a Monzo account actually makes very little difference.

The advice I would have given (assuming your Nephew wanted to join Monzo), would be to keep (or open), a High Street bank account that they could keep forever.

From what I understand, simply having a bank account doesn’t improve your credit history, it’s the length of time you’ve had it for that they look at. So even opening a Lloyds account won’t drastically improve your credit score immediately, but having the same account for 10 years will.

Maintaining a phone contract, having a credit card and paying it off every month in full, taking out finance on things like cars and making sure you never miss a payment… Those are things that will help IMO.

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122

Thanks, Nick. Always helpful to have agreement that there’s diversity of opinion on this point. It’s important to hear from both sides of any argument.

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123

I completely disagree with you.

You need to educate people on properly budgeting their money, living within their means, saving and investing their money and having emergency funds.

Debt management should be taught, your right there but accruing debt shouldn’t be the first thing, not before they have tried saving up for whatever they need first.

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124

I think I’ve said before, but FWIW, I don’t want my data being shared more than it needs to, and I’m in a position where I could almost certainly get away with just using Monzo (and have my data reported to 1 CRA), and it likely would make no difference to my ability to get finance.

But if I think of my kids, I don’t know at what point they’d be taking out phone contracts, credit cards or other finance, and a bank account may be the only thing that reports to a CRA for a while.

I’d rather they could use Monzo (knowing they reported to all 3 CRA’s), than have to open a High Street account just for that.

It’s a pretty niche view I guess…

125

Thanks for the discussion guys. It’s been informative.

Re the point on having two accounts open. That’s what I have, but for the reasons stated that I suggest could affect my family.

What is interesting is from what I understand, Monzo has an issue with people not going “Full Monzo” which is what your suggestion would prevent (in certain circumstances). So is it not in Monzo’s best interest to start ticking off the things that will encourage people to get fully into bed with them.

I wholly admit that this is probably not at the top of that list though.

At the end of all this, I’d just be interested to hear Monzo’s position. It seems they don’t currently have one though (a public one at least)


nickh

    7 November

Peter_G:
Regulars will know that I’m not a fan of credit reference agencies.

And regulars will know I’ve been encouraging Monzo (along with @Throwingspoon), to report to ALL CRA’s, which I just feel should be a given (for me, the potential downsides are negated by the potential upsides - In a different world I’d be happy for none of my info to be shared).

Monzo had said they would do it in early 2019, which was pushed back to late 2019, and now it seems like it’s off the radar (it costs more money at the end of the day, and isn’t a priority for them).

But in this instance, I agree with @Peter_G and others (for your specific situation @Fenn).

If you are purely concerned with credit history for youngsters (and you are right to be IMO), having, or not having a Monzo account actually makes very little difference.

The advice I would have given (assuming your Nephew wanted to join Monzo), would be to keep (or open), a High Street bank account that they could keep forever.

From what I understand, simply having a bank account doesn’t improve your credit history, it’s the length of time you’ve had it for that they look at. So even opening a Lloyds account won’t drastically improve your credit score immediately, but having the same account for 10 years will.

Maintaining a phone contract, having a credit card and paying it off every month in full, taking out finance on things like cars and making sure you never miss a payment… Those are things that will help IMO.

126

Just for clarity, FullMonzo has been the most misunderstood terminology since they started.

I personally hate it, because it sounds like you can’t be part of the club unless you ditch everything and commit your entire life to Monzo.

But that’s not what it means… It’s supposed to mean that Monzo is your main account. However that may be.

Monzo will tell you they are more than happy for you to have multiple bank accounts - Ultimately, it’s just marketing spiel that the younger generation seem to like (especially ticking off your badges in the Monzo app… although I believe you can achieve this by CASSing away from Monzo :joy:)

They do have one, it was quoted to you a few posts back.

It’s something they are looking at, but reading between the lines, it won’t be soon (despite saying it would be early 2019).

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127

Why not just save up for a car?

Don’t become a slave to monthly payments. Your income is the no.1 thing to wealth building.

128

Because this isn’t about wealth building. It’s about credit history building.

People who simply buy everything outright likely have little credit history (and potentially don’t need it if they can afford to buy things outright).

If you had just enough money to buy a car, I’d recommend you took advantage of the deals a lot of dealers have, where you pay 50% up front, and 50% is interest free. That’s the best of both worlds in this instance.

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129

If you build wealth…then there is no need to go into debt.

Isn’t this a much preferred option?

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