Most credit limits are often set at the start of the customer relationship, and then left alone. But income changes. Spending habits shift. Life happens. The result? Some people are overexposed, holding on to more credit than they can safely manage. Others are underserved, with too little access despite being able to afford more. Neither outcome is good for the customer or the lender.
Open Banking changes all that.
With access to real-time transaction and income data, lenders can make assessments with far greater accuracy and adjust credit limits accordingly, not just once a year or when something goes wrong, but as a regular part of responsible lending.
Why credit limits need to keep up
When credit limits are based on a snapshot in time, they quickly lose relevance. Most lenders set limits during onboarding, using historical data or rough affordability models. But once set, those limits often remain unchanged, unless the customer encounters a problem or asks for a review.
That creates two types of risk:
#1. Underexposure: Customers with improving income or reduced outgoings might be unnecessarily restricted. They have room to borrow safely, but the system says no. That’s a missed opportunity for both the customer and the lender.
#2. Overexposure: On the flip side, someone whose income has dropped or whose expenses have risen could still have access to credit they can no longer afford. This increases the risk of missed payments, defaults, and regulatory scrutiny.
In both cases, the issue is usually down to a lack of information. Without timely insight into a customer’s financial reality, credit limits become static. And in an environment where regulators expect fair, responsible lending based on actual affordability, that’s a risk you can’t afford to carry.
📕Further reading: Spot the warning signs: How Open Banking data flags high-risk spending habits
What real-time data really shows
Traditional credit data gives you a view of the past. Open Banking shows you what’s happening now. With consented access to live bank transactions, lenders can go past surface-level metrics and start to understand the full financial picture—one that updates in real time.
That includes:
- Income patterns: Is income consistent? Has it increased or dropped recently?
- Spending behaviour: Are essentials being prioritised? Are there signs of stress or risk?
- Vulnerability indicators: Benefits income, gambling spend, persistent overdraft usage, and more.
These act as signals. And they help you answer questions like: Can this person comfortably afford more credit? Do they need a lower limit to stay in control? Is there a shift in financial stability that needs attention?
| AperiData provides this insight through a real-time Open Banking feed, delivered via API and ready to plug into your existing systems. As a regulated Credit Reference Agency, we offer the right data and the credibility and governance that financial services teams need at speed and at scale. |
It’s a level of granularity you won’t find in traditional credit data alone.
When decisions are grounded in real, up-to-date affordability data, credit limits can finally become what they were meant to be: fair and personalised.
📕Further reading: From proof of affordability to hardship assessment: Open Banking data’s role in vulnerability
From static limits to credit line optimisation
Of course, knowing someone’s real-time financial position is only half the story—the real value comes from what you do with it.
With Open Banking, lenders can move from static, one-off decisions to proactive, personalised credit management. That means optimising limits in a way that reflects the customer’s current situation, not just their historical credit behaviour.
Here’s what that can look like:
- Gradual limit increases for customers with stable income, low utilisation, and strong financial resilience. Rather than relying on customer requests or generic rules, you can proactively offer more credit to those who can genuinely afford it.
- Temporary limit reductions when income drops or spending patterns suggest pressure. These aren’t punitive—they’re preventative, helping customers stay in control before issues escalate.
- Trigger-based reviews that respond to changes in financial behaviour, rather than waiting for missed payments or complaints.
When done well, this approach helps strike the right balance between growth and caution.
It also opens the door to more meaningful conversations. Customers don’t feel like they’re being judged by outdated scores. Instead, they see a lender who understands their situation and acts accordingly.
The business case for right-sizing credit
Getting credit line optimisation right has far-reaching benefits, from reducing risk to improving compliance and strengthening customer trust. Set credit limits too high, and risk increases. Too low, and you miss growth. Either way, the impact goes far beyond customer outcomes.
Here’s how Open Banking supports a smarter approach:
🛑 Risk
When limits are based on outdated data or assumptions, lenders carry avoidable risk:
- Overexposure inflates bad debt provisions
- Underexposure holds back growth and leaves low-risk customers underserved
- Misaligned limits increase the likelihood of missed payments and arrears
Right-sizing credit lines with real-time data creates a more proactive lending model… One that reflects each customer’s financial reality. That means earlier interventions, more accurate approvals, and fewer surprises down the line.
📋 Compliance
With Consumer Duty in force, lenders are expected to make fair, proportionate decisions based on up-to-date evidence (not historical assessments). Using Open Banking data helps demonstrate that credit limits are actively monitored and adjusted in line with actual affordability.
🤝 Trust
Customers notice when credit feels fair. Limits that reflect real circumstances, rather than fixed thresholds—build credibility and confidence. That trust leads to better engagement, more responsible borrowing, and stronger long-term relationships.
| AperiData supports this by giving you control over how and when credit limits are reviewed. Our data outputs can be tailored to your risk appetite, lending policies, and customer profile—whether you’re operating in prime, near-prime, or specialist markets. |
The bottom line: When your decisions are grounded in real data, it’s easier to lend responsibly, stay compliant, and earn customer trust.
Lending that keeps up
Fixed credit limits might be simple. But they don’t reflect how real life works.
Customers’ financial situations shift all the time. And when limits stay the same, lenders risk missing both the warning signs and the opportunities.
Open Banking changes that. By giving you a live view of income, spending, and resilience, it allows you to make credit decisions that stay relevant—day to day, customer by customer.
It’s better for compliance. Better for risk. And better for the customer.
Want to right-size your credit decisions with confidence? AperiData delivers the regulated, real-time data financial services need for smarter lending and effective credit line optimisation—backed by flexible delivery, CRA-level assurance, and a consultative approach built around your goals. Get in touch. We’d love to hear from you.
