You may find yourself turning to borrow credit to make ends meet or manage an unforeseen expense. You’re not alone in this, as many people are struggling financially amidst rising prices and cost-of-living challenges. This can be particularly daunting if you have a low credit score, as traditional lenders rely on these numbers to calculate their lending risks.
However, in 2025, the lending market is undergoing transformative changes thanks to innovative fintech solutions like Open Banking. This allows lenders to access real-time financial information that helps them offer you tailored, affordable loan options that go beyond standard credit scores.
What does this mean for you as a borrower? If you have a poor credit score, it will no longer be a barrier for you to access loans. Instead, you can access some of the best loans for bad credit, especially if you borrow from ethical lenders, who use Open Banking data for their affordability assessments.
In this article, we explore ways you can secure funds even with a low credit score.
Keep reading to find out more.
Explore Alternatives Before Borrowing Credit
This may sound dull and dampen your enthusiasm for borrowing, but it comes from sound financial wisdom. Borrowing credit, no matter how small the amount, is a serious financial commitment that requires prudence and due diligence on your part. One missed payment or borrowing the wrong credit option, especially when you have a low credit score, can prove risky and trap you in a potential debt cycle.
For this reason, it’s advisable to exhaust all your other alternatives. This could include selling second-hand goods, taking up a gig to generate some quick cash, using smart budgeting techniques, or even seeking free financial advice. You could also check if you qualify for any benefits under government schemes or borrow from emergency/hardship funds from your local council. Only when you’ve exhausted all these options should you consider borrowing credit.
Build Your Credit Score
A low credit score hurts when it comes to borrowing because your loan options, though available, can be limited. If you’re borrowing for a non-emergency financial need, consider investing some time in building up your credit score. This will improve your credit standing for the long term and broaden your credit options considerably.
You can start by looking into credit builder products like a secured credit card or credit builder loans, which are specifically designed for those with poor credit. When done right, they’re a simple and effective way to build a positive payment history quickly. However, before you borrow a credit builder loan, check your credit report and report any inaccuracies or update any outdated information. This way, you can start building your credit from a clean, error-free slate.
Leverage Open Banking
To say that Open Banking has revolutionised the lending market may be an understatement, given its wide-reaching impact across fintech products and services. Since its introduction in 2018, it has empowered numerous consumers to access cheaper financial products and services that best suit their financial needs. As a borrower with bad credit in 2025, your best bet to find the right credit option is to grant consent to Open Banking.
These are highly secure systems that use application programming interfaces (APIs), so you needn’t worry about your data being misused. Ethical lenders use this to study your cash inflows and outflows, which helps them gain clarity about your financial situation in real-time. It allows them to focus on your current financial resilience and take an affordability-based approach rather than one based on your creditworthiness or your past financial mistakes.
Borrow from Responsible, Ethical Lenders
You may have heard your share of stories about predatory lenders who use questionable marketing tactics, offer remarkably low APR rates and other misleading information to lure vulnerable borrowers. Well, responsible, ethical lenders are the exact opposite of this and can help you find the right credit and ensure a smoother borrowing experience.
There are several reasons why you should consider borrowing from an ethical lender. You’re more likely to find an affordable credit option with flexible repayments and transparent terms and conditions when you borrow from them. This is because these lenders are committed to borrower welfare and financial inclusion. They also offer products and services that specifically cater to those who are excluded by mainstream lenders owing to a poor credit score.
This way, you stand a better chance of accessing low-cost credit when you choose an ethical lender. It limits your borrowing risks significantly, while helping you meet your financial needs minus the stress.
Summing Up
Securing funds with a low credit score might seem like a challenge, especially when your credit options seem limited. However, by being strategic and doing your due diligence, you can find a loan option that’s just right for you. Choosing an ethical lender is a big part of that and can make a huge difference in your borrowing experience.
