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Open Banking has changed the way people manage their finances and how regulated financial organisations and direct lenders assess applications for credit.
Rather than asking customers to find, download and send copies of their bank statements manually, Open Banking can allow financial information to be shared securely and electronically. This can make financial services faster, reduce unnecessary administration and give lenders a clearer, more up-to-date picture of an applicant’s circumstances.
However, allowing another organisation to review banking information can understandably raise questions. You may want to know what data can be seen, whether your login details remain private and how the information may affect a lending decision.
This guide explains what Open Banking is, how lenders use it and what you can expect if an Open Banking check forms part of a Polar Credit application.
Open Banking is a secure way for customers to share financial information held by their bank with an authorised third-party provider.
It was introduced to give people greater control over their financial data and make it easier to access services based on their actual financial circumstances.
With your permission, an authorised provider can securely retrieve information such as your account transactions, regular income and recurring expenditure. This information can then be used by a financial service, budgeting application or lender for the specific purpose you have agreed to.
Open Banking does not give companies unrestricted access to your bank account. The organisation can only access the information covered by your consent and for the agreed period.
We may use Open Banking as part of the application and affordability assessment process.
Where an Open Banking check is required, it can help us verify information provided during an application and understand whether the proposed credit is likely to be affordable.
It may provide a clearer picture of factors such as:
Open Banking is only one part of our lending assessment. An application may also be assessed using information entered on the application form, credit reference agency data and other affordability or creditworthiness checks.
Completing an Open Banking check does not guarantee that an application will be approved. Equally, a lending decision would not be based on a single transaction viewed in isolation. The information contributes to an overall assessment of the applicant’s circumstances.
It is always important that you only apply for credit if you are confident that you can afford the repayments comfortably.
As a responsible lender, we must assess whether lending is appropriate and whether the applicant appears able to manage the repayments without experiencing significant financial difficulty.
Open Banking can support this process by providing timely financial information rather than relying solely on information that may be incomplete or out of date.
Applicants are asked to provide information about their earnings, household spending and existing commitments.
An Open Banking check can help confirm whether the information entered on the application broadly reflects the activity shown in the selected bank account.
A lender needs to consider more than whether an applicant has money entering their account. Regular bills, housing costs, other debt repayments and essential spending can all affect whether further borrowing is affordable.
Open Banking can help us consider income and expenditure together rather than viewing either one in isolation.
Without Open Banking, an applicant might need to find and submit copies of recent bank statements. These documents would then need to be reviewed manually.
A secure electronic check can reduce this administration and help the application progress more efficiently.
Credit reports provide useful information about existing accounts and borrowing history, but they may not always provide a complete picture of someone’s current day-to-day finances.
Open Banking can supplement other checks with more recent transactional information. We do not assess applications solely based on a person’s credit score and this process helps us better evaluate applicants with a bad credit history.
The exact process may vary depending on the provider used, but an Open Banking process will generally involve several clear steps.
1. Permission
You will be told that financial information is required and asked for your permission to continue.
2. Secure bank authentication
You select the bank or building society holding the account you want to connect and are transferred to your bank’s secure website or application to authenticate yourself.
3. Information sharing
Once you approve the connection, the authorised provider can retrieve the agreed account information and share the relevant results with us.
The process may take only a short time, although this can depend on your bank, internet connection and whether additional information is needed.
No. Polar Credit does not receive your online banking password, memorable information or other login credentials through an Open Banking connection.
You authenticate directly with your bank using its normal security process. Depending on the bank, this may involve its mobile application, a one-time code, biometric identification or another secure authentication method.
The Open Banking provider receives permission to access agreed account data, not your login credentials.
You should never provide your online banking password or security details directly to a lender, adviser or other third party. A genuine Open Banking journey should direct you to your bank’s own secure environment for authentication.
The precise information available depends on the permission requested and the account you choose to connect.
The purpose of reviewing this information is to understand your overall financial circumstances and assess affordability.
It does not mean every individual purchase is judged on its own. A responsible assessment should consider the wider pattern of income, essential expenditure and existing commitments.
An Open Banking connection does not automatically provide permanent or unrestricted access to your account.
The access available depends on the consent you provide. Some checks may involve a one-off retrieval of information, while other services may request access for a defined period.
Where continued access has been requested, you can normally withdraw your permission. However, withdrawing access will not necessarily remove information that has already been lawfully obtained and used.
Open Banking is designed to allow information to be transferred using secure technology and without requiring customers to disclose their bank login details to the business requesting the data.
Banks, lenders and Open Banking providers must follow relevant security, data protection and regulatory requirements.
However, customers should still take normal precautions when using any online financial service.
You remain in control of whether you provide consent to an Open Banking connection.
However, if we need particular financial information to assess a Polar Credit application, choosing not to complete the requested check could mean that we do not have enough information to continue or make a lending decision.
This is not the same as being forced to share your banking information. You can decide not to proceed, although doing so may affect whether the application can be assessed.
Where alternative ways of providing information are available, these should be explained during the application process.
Completing an Open Banking check does not itself create a credit search or directly change your credit score.
It is a method of securely sharing account information rather than a credit reference agency search.
However, a lender may carry out a separate credit check as part of the application. You should review the information provided during the application to understand whether this will be a soft search, a hard search or another form of creditworthiness check.
The information obtained through Open Banking may influence the lending decision because it helps the lender assess affordability, but the connection itself will not be recorded as a borrowing application on your credit report.
Open Banking may be helpful where a traditional credit report does not provide a complete picture of an applicant’s current circumstances.
For example, someone with a limited borrowing history may have little information recorded by credit reference agencies. However, their bank account may show regular income, stable household spending and responsible financial management.
Open Banking can give a lender additional information to consider alongside the credit report, which may be particularly useful when assessing applications from people with a poor or limited credit history.
However, it does not replace all lending criteria and does not guarantee approval. The lender must still decide whether the applicant meets its eligibility, creditworthiness and affordability requirements.
Open Banking is not limited to credit applications. Authorised services can use it to help customers bring multiple bank accounts together, understand their spending and compare financial products.
| Use | How it may help |
|---|---|
| Managing several accounts | View information from different bank accounts in one place. |
| Creating a clearer budget | Categorise transactions into housing, transport, groceries, subscriptions and leisure. |
| Identifying subscriptions | Make recurring card payments, standing orders and Direct Debits easier to identify. |
| Comparing services | Support personalised comparisons based on actual account activity. |
| Business accounting | Connect bank activity with bookkeeping software and reduce manual data entry. |
A declined application can be disappointing, but declining borrowing that is unlikely to be manageable may protect the applicant from greater financial difficulty.
Open Banking can provide useful information, but it does not always tell the full story.
A selected account may not contain all of the applicant’s income or spending. Some people use cash regularly, share expenses with another person or move money between several accounts.
Individual transactions may also require context. A large payment could be a one-off expense rather than a normal monthly commitment, while a transfer into the account may not represent regular income.
For this reason, Open Banking information should generally form part of a wider assessment rather than being treated as a complete replacement for all other information.
Applicants should provide accurate details and explain anything unusual where they are given the opportunity to do so.
Do not continue if you are ever asked to provide your banking password to anyone that is not your bank.
If you are concerned about an Open Banking connection or believe your information has been handled incorrectly, contact the organisation that requested or provided the service.
Explain what happened and retain copies of any relevant emails, screenshots or transaction details.
You must also contact your bank if you believe an account connection was unauthorised or if you notice transactions you do not recognise.
Where a complaint is not resolved satisfactorily, further complaint or escalation options may be available depending on the organisation involved and the nature of the issue.
Sharing account information through Open Banking is different from authorising payments. A data connection will not allow Polar Credit to withdraw any money from your bank account.
Any repayment authority or payment arrangement that forms part of the application will always be explained separately.
No. You authenticate directly with your bank, and Polar Credit should not receive your password or any of your security credentials.
Only the account or accounts that you select and authorise through the Open Banking process will be visible, but we may be unable to continue with your application if not all bank accounts you have are connected.
No. Open Banking information forms part of the overall assessment and does not guarantee that an application will be accepted.
A lending decision is based on your wider financial circumstances rather than any one transaction viewed without context. However, the lender may need to consider any transaction that materially affects affordability or raises questions about the information provided.
The period of transaction history available can vary according to the provider, bank and purpose of the check. The consent information will explain what data is being requested.
You should connect the account that best reflects the income and expenditure relevant to your application. Where you use several accounts, you may be asked to connect more than one.
Open Banking is intended to give consumers greater control over their financial information while allowing authorised services to provide more relevant and efficient products.
For lenders, it can support faster verification and more informed affordability assessments. For consumers, it can reduce the inconvenience of manually supplying financial documents and help ensure lending decisions are based on a more current view of their circumstances.
When we at Polar Credit request an Open Banking check, the information is used as part of the wider application assessment. You remain responsible for deciding whether to provide consent and should only continue once you understand which information will be accessed and how it will be used.
Open Banking does not guarantee approval, but it can help us make a more accurate and responsible lending decision.