Which CRA is used for Loan Applications?

I have just tried to look into a Monzo Loan but it immediately said my credit score was too low.

which was a shock as I have an “excellent” score on Experian of 963, so I went checking elsewhere and found an error on a loan which is only reported to TransUnion and Equifax, I have contacted the lender so will wait to see what they say but it got me thinking: who does Monzo use when Credit Scoring new applicants?

They generally use transition but they also create an internal credit score using that data and mysterious other data (probably income and outgoings etc) to decide if you qualify for a loan

They are very conservative in their lending so it’s not clear from the outside who qualifies for a loan and who doesn’t

I’m looking for a loan for home improvements so have been looking on and off at Monzo for months.

Monzo use Credit Karma I believe to check for loans. They can check Experian but when my Credit Karma score went up one time it ‘unlocked’ that first stage and it referrs you to Credit Karma (or did) to see why.

Now I’m ‘stuck’ at the second stage as Monzo doesn’t know my income, even though my salary is paid into Monzo and I am a teacher on the upper pay scale so it is a mostly covid-secure job, above the national average.

I have good offers from Zopa or high street banks such as Royal Bank of Scotland or Barclays so know it isn’t my situation. I generally see it as Monzo has ‘closed applications’ for now to all but a few individuals who meet their random*** internal scoring as they are just very conservative at lending.

*** Not random for Monzo, but it feels random to me.

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As others have previously mentioned, Monzo is being extremely conservative with it’s lending practice.

The scores that credit reference agencies give have no real meaning outside of the agencies as each organisation will have its own criteria. It’s why they can be a little frustrating.

On paper, based on my credit files and regardless of score, I would be a sure fire bet for credit but like you’re experiencing, Monzo won’t do very much.

It probably has very little to do with you and a lot to do with Monzo. The Experian score is just their shot in the dark of how creditworthy you might be, it does not take into account the two main factors - your salary and how much money Monzo wants to lend out at any point in time.

In the years I’ve banked with Monzo I’ve qualified for loans from NatWest, Nationwide, Ratesetter and Halifax, and have got new credit cards from fairly difficult to qualify for lenders like AMEX and MBNA and we’ll as all the rest, and all Monzo has ever offered me is a tiny overdraft. I’m not hung up about it as I know it’s just them being very cautious.

(Made up numbers for illustration) If they wanted to lend £100m out and they have 5m customers, that’s only £20 a customer available for them to lend. Instead of offering half the userbase a loan of £40 they are likely only offering 1% of the userbase a loan of £1k or 0.1% of users £10k. And those 0.1% of customers would not only have an excellent credit score but also a very high (probably £100k+) demonstrable income going into their account over a long period of time.

I earn around £25k so I presume i am very far away from ever getting a loan with Monzo.

I wonder if anyone who has a monzo loan would care to share their income? If it’s sub £30k then I’ll eat my hat!

I reckon that is the key metric they are going by, not whether Experian thinks you are a 875 or 999.

Just speculatiion though.

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I was offered one before covid on a wage income that normally comes to £21k per year after overtime and bonuses (I declare before that on eligibility checkers and applications)

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What seasoning do you want on your hat?
Definitely sub 30k. I’ve had it since last September though when they were less cautious

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Argh! Maybe I’ll just delete my post instead of eating all these hats!

Updated post: I have no idea whatsoever how Monzo decides who to loan to! :man_shrugging:

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Monzo loans tend to work off the spin of a roulette wheel

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Nobody will ever know.

Would not be surprised if they have paused lending new loans while the economy stops going bang.

Imagine the northern rock run with social distancing (something to think about in the shower)

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They’re activity allowing overdraft increases at the moment, wouldn’t know about loans as I’ve got one already

Monzo are weird. They offered me an overdraft of 2000 then the law changed about interest last year (or this year maybe) and suddenly they wouldn’t offered me anything over 50 quid. They’re offering me a grand now though

I’m on about £39k but Monzo doesn’t ‘know’ what my income is even though my salary paid into Monzo, I have declared it to Monzo and the credit reference agencies know the amount because I declared it to them too. It seems a random throw of the dice which makes me speculate they have effectively closed applications, maybe for the reasons @rarther states. Who knows :man_shrugging: .