It is a tough position to be in when you have to borrow money, especially if there’s an emergency. Sure, there are plenty of online resources available, but getting your head around the process can quickly get confusing and overwhelming. 

If you have limited or no credit history, it will further complicate your borrowing capacity because lenders heavily rely on credit scores to evaluate and gauge the risk involved. Your lack of credit history could, therefore, lead to higher interest rates or even rejection of your application. 

For years, building a strong credit score has been the key to securing loans and mortgages and exploring other financial opportunities. But with evolving trends, alternative lending models, and Open Banking assessments, the question arises: does a high credit score still matter as much in 2025, or do you need a loan with no credit check? Are there better ways available now to access credit, even without a perfect score? 

Let’s explore the changing landscape of borrowing and whether credit history and checks still hold the same weight today.

What Is a Credit Score?

Your credit score (you actually have three, not one) is a number generated from reports by the main credit reference agencies (CRAs) in the UK: Experian, Equifax, and TransUnion. There are two types of credit checks. A soft credit check only evaluates your credit eligibility and won’t impact your credit score. A hard check, usually preferred by banks, examines your entire credit record. Simply running a hard credit check can also impact your credit score. After understanding what a credit score is, it is natural to be curious about how to build a good credit score.

How to Have a Good Credit Score?

A good credit score cannot be defined by numbers, as each CRA has a different reference range. Based on these ranges, a healthy credit score ensures that you have favorable terms, easier bank approvals and pass employee background checks.

Your credit score depends on various factors, such as registering for an electoral role, building your credit history, making regular repayments, and keeping your credit utilization low. You might find yourself in a catch-22 situation if you have no or limited credit history and you try applying for bank loans.

What If You Have No Credit History?

One of the biggest myths is that having no credit history is better than having bad credit. In reality, without any financial track record, lenders don’t have a way to assess how you handle credit.

If you’re in this position, there are a few ways to start building your creditworthiness without taking unnecessary risks. Using a credit builder card (a type of credit card designed for people with little or no credit) can help establish a positive borrowing record. Setting up direct debits for utility bills and mobile phone contracts might work in your favor.

At the same time, avoid applying for too many credit accounts at once, as multiple hard credit checks can lower your score.

How Lending Has Changed in 2025?

In 2025, alternative lending models will make credit more accessible to those who need money immediately and have a bad or limited credit history.

1. Open Banking Assessments

Many lenders now use real-time banking data to analyze income, spending habits, and affordability instead of relying solely on credit scores.

2. No Credit Check Loans

Some lenders, especially those offering loans for bad credit, focus on employment status and affordability rather than credit history.

3. Buy Now, Pay Later (BNPL)

BNPL services allow consumers to make purchases without needing a traditional credit score.

Should You Get a Loan with No Credit Check?

Getting a loan without a credit check should be an option only in case of small emergency expenses. These loans can be helpful as lenders don’t require a credit check and instead focus on your income. The APRs (Annual Percentage Rate) for these loans will be a bit higher than bank loans; hence, they should only be considered when there are no other options. 

Summing It Up

A good credit score is still necessary for important purchases in 2025, but it is not the only solution for smaller and urgent expenses. Thanks to Open Banking, alternative lending models, and new financial services, people with bad or limited credit histories have more options for their emergency expenses.

If you’re planning to take out a mortgage, personal loan, or high-value credit in the future, keeping your credit score in check is a smart financial move. However, if your roof has just collapsed or your car has just broken down, then getting a no-credit-check loan is a better option. 

At the end of the day, the key is to make informed financial decisions that work for you.