When you apply for a loan, it can be frustrating to feel judged solely on your past. Traditional credit checks often don’t give lenders the full picture, and that’s where open banking comes in. At Cockle Finance, we use open banking to offer fairer, faster, and more personalised lending decisions.
In this guide, we’ll explain what open banking really is, how it works, and why it could make a big difference when applying for a loan.
What is Open Banking?
Open banking is a secure way for lenders to access your recent banking data with your permission. It allows trusted financial providers like Cockle Finance to view your income, spending habits, and account activity in real time, not just a credit score that may be months or years out of date.
Open banking was introduced by UK law in 2018 as part of a push to make banking more transparent and competitive. It is completely legal, safe, and regulated by the Financial Conduct Authority (FCA). You stay in control, and your data is never shared without your consent.
What Does Open Banking Check For?
Open banking checks the actual financial activity in your bank account, including:
- Your regular income such as wages or benefits
- Monthly bills and subscriptions
- Spending habits and any gambling or risky patterns
- Your ability to keep your account in good standing
This helps lenders assess affordability in a much more accurate way, not just whether you’ve had credit issues in the past.
Why Cockle Finance Uses Open Banking
At Cockle Finance, we believe in giving people fairer access to loans. That’s why, when you apply directly with us, we use open banking instead of a traditional credit check.
Here’s how it helps:
- Quicker decisions – we can often make a same-day assessment
- More inclusive – ideal if you’ve been declined before due to poor credit
- Fairer process – based on your current financial situation, not just your past
- No hidden surprises – we clearly show you what you can afford
If you’re applying from outside our direct lending area and we act as a broker, we may pass your application to a partner lender, and they might still carry out a traditional credit check. We’ll always let you know first.
Is Open Banking Good or Bad?
For most people, open banking is a positive step forward. It gives borrowers more control, allows lenders to make better decisions, and reduces reliance on outdated credit reports.
Pros:
- More accurate lending decisions
- Faster application process
- Easier access for people with poor or thin credit files
- Improved transparency
Cons:
- You must be comfortable sharing your bank data, though it is secure
- Some people may find it intrusive if they’re not familiar with the process
Does Open Banking Affect Your Credit Score?
No. Using open banking does not affect your credit score.
When Cockle Finance uses open banking to assess your application, there is no mark on your credit file and no credit search is recorded. It is a soft, real-time review of your finances based only on the data you choose to share.
Is Open Banking Legal in the UK?
Yes. Open banking is regulated in the UK by the Financial Conduct Authority (FCA) and governed by strict data privacy laws under the Payment Services Regulations 2017 and GDPR.
Only regulated third parties like Cockle Finance and our open banking partners are allowed to use the system, and you can revoke access at any time.
A Smarter Way to Borrow
Open banking is changing the way people access loans in the UK, offering loans without traditional credit checks. At Cockle Finance, we use it to help people get fairer decisions based on their real-world finances, not just their credit history.
If you’ve struggled to be approved elsewhere or want a faster, more transparent process, open banking could be your best option.
Ready to apply? Visit Cockle Finance to see how we can help.
