Monzo vs Starling Joint Accounts - Credit Score

SavvySpaniel

Hi there,

My sister and I are looking into setting up a joint account to which our elderly mother can pay some money into each month for us to do her shopping and buy bits and pieces for her.

I already have both a Monzo and a Starling account for holidays (Monzo came first and then when they introduced the additional charges for ATM withdrawals over £200, I ordered a Starling card). So far, they have both been great and I have used them both abroad and in this country with no problems.

So I thought one of these would be perfect for the job. Both of us would be able to see when any money is spent, and with the additional notes/receipt photos that you can add to transactions we would be able to keep a track of what has been bought. No more doubling up on bread and milk!! Mum could set up a standing order for money to be transferred into it each month and it would be a very transparent way of sorting out the finances between us.

I had a look at the Monzo information page about Joint Accounts and it had this piece of information:

Monzo Joint Account - A Few Things to Bear In Mind:
You’ll be financially linked to whoever you open the account with
When you open any joint account with someone, you become linked to them financially. That means you can be jointly credit-scored, and their credit history can have an impact on yours.

I then did an online chat with Starling to see if the info on the Monzo page also applied to them (as the Monzo statement indicates that when you open any joint account with someone, you become financially linked with them.

The Starling representative advised that with them, in order to open a joint account, each person will need to have a personal account and that is where credit checks are done - so we would not affect each other's credit rating.

Has anyone else researched this (either with these two banks, or with other banks?). Are they both correct - do they operate joint accounts in different ways. I would rather not share a credit rating with my sister - and am sure she would rather not share one with me!

Thanks

EarthBoy

The same rules apply to joint accounts with Starling as with any other bank, including Monzo. As I understand it, you don't share a credit rating, you keep separate ones, but they can be affected by each other's rating. As it says on Starling's website:

"It probably goes without saying that a joint account is for people who trust each other and know each other well – you’ll both be responsible for the account and will have full access to everything in it. Opening a joint account with someone with a lower credit score can affect your credit score so it’s worth being aware of each other’s financial situations before you open the account."

https://www.starlingbank.com/blog/joint-accounts-bank-anywhere-together/

SavvySpaniel

Thanks @EarthBoy ... I wasn't sure if the Starling representative had told me the right thing and, unlike you I hadn't come across that bit of info on their website! It doesn't seem to mention that bit on their website:
https://www.starlingbank.com/current-account/joint-bank-account/

Cheers!

[Deleted User]

Neither of you have a credit rating or a credit score - so ignore anything from the CRA's that say you do.

What you have is Credit History.

SavvySpaniel

Thanks !!! ... would you be able to expand on how that might affect us in terms of creating a Joint Account please? ie. say if one of us had a bad credit history ... would that reflect on the other person?

[Deleted User]

Not to a degree - however were you to make a joint application together then it may affect the outcome of that application

SavvySpaniel

OK thanks. I guess in both cases (Monzo and Starling) - each person needs to have their own account first before a joint one can be created, so if there were any credit history issues then these would be picked up at the initial account setup phase and one or other party would be denied an account.

Once both parties have an existing account - then I guess all is OK and we can go ahead and create the joint one.
Would you agree?

DCFC79

SavvySpaniel wrote: »

OK thanks. I guess in both cases (Monzo and Starling) - each person needs to have their own account first before a joint one can be created, so if there were any credit history issues then these would be picked up at the initial account setup phase and one or other party would be denied an account.

Once both parties have an existing account - then I guess all is OK and we can go ahead and create the joint one.
Would you agree?

Yes that's what I would do.

If both of your credit files are clean then you will be ok, just remember to be careful to not get defaults etc but I'm sure you know that already.

colsten

SavvySpaniel wrote: »

OK thanks. I guess in both cases (Monzo and Starling) - each person needs to have their own account first before a joint one can be created, so if there were any credit history issues then these would be picked up at the initial account setup phase and one or other party would be denied an account.

Once both parties have an existing account - then I guess all is OK and we can go ahead and create the joint one.
Would you agree?

Your respective credit history is not only important for opening the account at Starling / Monzo, but also for future transactions. As soon as you have made a joint application for any financial product, the two parties are linked, even beyond the time they hold a joint account.

So, for example, and this is purely hypothetical for illustrative purposes: your sister gets herself into significant debt on a personal account (not linked to you) and gets into arrears with the settlement of the debt. This will be reflected on her credit history. Now, when you apply for, say, a mortgage, in your sole name, you might get turned down even if your personal credit file history is perfect. The fact that you are linked to someone whose credit file history is in disarray will count against you.

This is how things work. You, and your sister, may not be concerned about it as you know and trust each other. I have a joint current account with one of my siblings for similar reasons as you describe, and we are both happy that we are not taking any undue risk. Only you can judge what your risks are, and whether you find them acceptable.

PRAISETHESUN

When you open a joint credit facility (eg. bank account mortgage, etc) with someone you are financially linked for the duration the account is opened. Whilst you are linked, your credit history will be considered whenever the linked person applies for credit, and their credit history will be considered whenever you apply for credit, irrespective of whether the credit is in joint or single names.

This is how things work for EVERY lender, not just Monzo/Starling. I would be very careful when considering opening a joint account with your sister - if one of you has bad credit, then this will affect the other if you need to make new credit card, loan or mortgage applications whilst the account is open.

A possible solution to avoid this would be to open an account in one of your names, and then add the other as an additional card holder - but be aware then the account is legally the property of one person, and the additional cardholder cannot open, close, or otherwise make decisions that affect the account. Another option could be to open an account in your mother's name, with both of you as additional card holders - if she is at the age where things like this could be an issue, it might be worth considering a power of attorney so you could do this on her behalf, rather than her having to open and manage the account herself.

colsten

PRAISETHESUN wrote: »

When you open a joint credit facility (eg. bank account mortgage, etc) with someone you are financially linked for the duration the account is opened.

And beyond, unless you take action. Financial associations last indefinitely on your credit report, unless you manually request their removal.

https://www.checkmyfile.com/articles/2917/credit-reports/guide-to-financial-associations.htm