Knowing Your Credit Score

What is your credit score? How credible a lender are you? Are you aware that to access loans of varying amounts, you need a credible financial reputation?

A credit score is a number based on a level evaluation that represents the credit worthiness of an individual or business. Typically, the higher your credit score, the more financially trustworthy you are considered to be. All financial institutions are required to turn in both good and bad loan accounts to the credit bureaus to generate the necessary credit reports. These credit reports are then prepared by the credit bureaus based on information submitted to them by financial institutions.

The credit bureaus provide credit report evaluation for lenders, banks and any other financial institution that would want to determine an individual’s financial history or creditworthiness.

The Credit Bureau Association of Nigeria (CBAN) was set up in 2012 by the three licensed credit bureaus in Nigeria. They are the CRC Credit Bureau Ltd, CR Services Credit Bureau Plc and XDS Credit Bureau Limited. Each financial institution that lends is required to send reports to the bureau for every loan given, whether negative or positive.

Each time you try to obtain a loan and are unable to because of a credit issue, it means you may have a bad credit report. You may have unpaid installments on a previous loan or you have a financial history of late loan repayments.

With the advent of financial technology (FinTech), with provision of applications that can be accessed on mobile phones, getting a loan is much easier. The earlier you repay loans gotten on these platforms, the higher the amount you can access and the more creditworthy you become. Subsequently, we shall be looking at various fintech platforms that you can access loans from and navigating you through the process of a securing a loan.