Why Credit Is Still Broken in 2025

Credit is supposed to unlock opportunity. Yet in 2025, too many people are still stuck in a system that doesn’t understand them. Whether it’s a first-time homebuyer, a young professional, or a gig worker, borrowers are often assessed by outdated processes that miss the full picture of their financial health.

At Teal, we believe it’s time to ask a fundamental question: Why is credit still broken in 2025?

The Legacy of Static Scores

For decades, the credit industry has relied on static, backward-looking models like credit scores and payslip checks to determine affordability. But these methods are increasingly unfit for today’s workforce:

• Payslips are slow and error-prone. Manual uploads and document checks waste time and frustrate customers.

• Static scores can’t see nuance. They often exclude people who don’t fit a traditional profile, like gig workers or those with multiple income streams.

• Outdated processes slow down decision-making. Lenders spend too much time chasing data instead of serving customers.

In short, the traditional credit system is stuck in the past—treating people like numbers, not like real humans with dynamic financial lives.

The Problem with Incomplete Income Data

Income is the single most critical factor in assessing affordability. But legacy systems typically rely on outdated or incomplete data:

• Gaps in visibility: Traditional lenders often rely on self-reported income or outdated records, missing changes in employment status or salary fluctuations.

• Risk of exclusion: Millions of borrowers fall through the cracks simply because their financial picture isn’t visible enough to underwriters.

• Compliance headaches: With regulations like the FCA’s Consumer Duty now in full force, lenders are under pressure to ensure they’re making fair and responsible lending decisions based on accurate, up-to-date data.

At Teal, we see this as the biggest opportunity—and the biggest challenge—facing the credit industry today.

A Workforce That Has Changed (But Credit Hasn’t)

The UK workforce has evolved dramatically over the last decade. More people are working flexibly, switching jobs, or earning from multiple income streams. Yet the credit industry’s reliance on outdated processes means these individuals often struggle to access the credit they deserve.

• Payroll is the source of truth. For most people, payroll is the most direct, consistent, and reliable record of income.

• Real-time verification matters. Lenders need to know—not guess—what someone earns today, not six months ago.

• Flexibility is the future. Affordability checks should reflect modern financial lives, not penalize people for non-traditional employment.

The Cost of Getting It Wrong

When credit decisions are based on incomplete data, everyone loses:

• Lenders risk higher defaults or miss creditworthy customers entirely.

• Borrowers face delays, rejections, or pay higher rates than they should.

• The economy suffers as financial access shrinks instead of grows.

This isn’t just a technical challenge; it’s a systemic problem that impacts real people—and the institutions that serve them.

How Teal Is Rewiring Credit

At Teal, we’re on a mission to fix what’s broken—by building the data rails that modern credit needs. We connect directly to payroll systems, giving lenders real-time, verified income and employment data, securely and with user consent. That means:

• Faster, more accurate affordability checks

• More inclusive credit decisions that reflect the modern workforce

• Lower risk for lenders, and better outcomes for borrowers

By bringing payroll data into the heart of credit decisioning, we’re helping lenders meet regulatory expectations while giving borrowers more control over their financial data.

Ready to see how Teal can transform your credit decisioning process? Visit goteal.co to learn more.