Startups are poised to become the provider of a niche market that has been passed by majority of banks. A collective of tech-savvy financial upstarts are willing to loan money to trustworthy borrowers whose credit scores had been damaged by the 2008 financial crisis.

One of them is FreedomPlus. On Wednesday, it announced that it will be extending consumers damaged credit scores up to $35,000 in loaned funds as it is confident that it could predict whose scores could rise soon. FreedomPlus hjas been backed by Microsoft co-founder Paul Allen-owned investment group Vulcan Capital for $125 million. In a pilot program which run for five years, FreedomPlus said it was able to loan people a total of $25 million. These people, said FreedomPlus, has a group FICO score average of 576, and that only 2 of the group had defaulted on their payments. FICO, a public company that provides analytics and decision making services, has a credit scoring model widely used in the industry.

Other peer-to-peer lending platforms like Lending Club and Prosper share the same characteristics of FreedomPlus. Businessweek said that this was because FreedomPlus chief investment officer Joe Toms held executive positions previously at both companies. Moreover, the report said all three companies have similar business models with Zest Finance and Cognical, which had developed pioneering techniques to determine potential creditors' creditworthiness from information that credit bureaus do not acknowledge.

Tom said, "There's this trend in the world that big data is going to take over, that it's going to be the domain of everything. I hear that, and I believe that's true, but we think face-to-face interaction counts," saying that there are huge opportunities in the financial niche market. Tom added this is as long as they can get a majority of the half of the 80 million people with FICO scores between 600 to 700 who will be seeing their scores rise the following year.