Open Banking has been a concept for a long time, but for most people it’s a relatively new service and as with most new products, it takes time to build consumer trust and awareness. This is especially relevant with Open Banking, because for years banks have told consumers to never share their banking information and only log in to your bank account when you are sure you are on the bank’s direct website. So, when a third party company asks you to log in to your bank account, it’s only natural you might feel deterred from doing so. However, increasingly, lenders and banks are using Open Banking to better understand their customers’ financial circumstances and the suitability of certain products or services. In this way, Open Banking is a very helpful tool not only for lenders, but consumers as well.
Polar Credit may use Open Banking as part of the application process for a credit line. A credit line is a revolving credit facility which allows you to borrow as often as you need to, up to your credit limit, requiring only a minimum payment each month to keep your account up to date. Because you borrow money and repay those funds with interest, it’s important to determine whether the borrowing is affordable. As well as credit checks and standard affordability assessments, using Open Banking means Polar Credit can get a clearer picture of your financial circumstances. In some cases, it may even mean approving an application which would otherwise be declined.
Using Open Banking also means your application can be assessed within minutes, which is important if you need money fast and rely on quick lending decisions. Having a third party review the information with a computer algorithm also means the checks are consistent and not subject to unconscious bias.
Polar Credit uses Credit Kudos, an authorised and regulated alternative credit reference agency. The process is fairly simple: Credit Kudos will direct you to your bank’s website where you will log in as usual to your online bank account. Credit Kudos then takes a snapshot of your bank statement and we compare this information to the details you provided in your application form. It’s a way for us to verify your income and expenditure and ensure the credit line repayments will be affordable.
Credit Kudos is authorised and regulated by the Financial Conduct Authority. Neither Credit Kudos nor Polar Credit will ever have access to you login information and your financial data can only be accessed with your explicit consent. You also have to consent each time a company does an Open Banking check, so they don’t have permanent or ongoing access to your financial information. Credit Kudos has several fraud prevention measures in place as well, and several helpful FAQs about Open Banking on their website to provide consumers with all the information they need to understand the new service.
If your Polar Credit line application is subject to additional verification, you will need to complete the Credit Kudos report in order for us to proceed with your application. Credit Kudos is a secure platform, and your banking information is never shared with any third parties.
If your bank account is not on the list, please contact the Polar Credit customer service team and they can advise you further on proceeding with your application.
It’s important to remember that as a responsible lender, we only want to approve customers who can afford the repayments on their credit lines. It might feel unfair if your application isn’t approved, but take it as an opportunity to review your finances and your credit file so you can make improvements for future applications. You never want a credit facility to make your financial situation harder, and Open Banking helps lenders make responsible decisions in relation to your financial circumstances.
More questions? Check out our Info Hub.