WHAT IS A CREDIT SCORE?
What is credit? It is the ability of a consumer to obtain goods and services before making payment, based on trust that they will make the payment in the future, at an agreed time and frequency.
For financial institutions, it is a binding agreement in which a borrower receives an amount of money and agrees to repay the lender at some later date with interest.
Consumers need to know that the companies we engage with, which cuts across all sectors of the Nigerian economy, use credit histories and credit scores as one of the criteria to determine whether they get approval for credit card, loan, mortgage or consumer products (like refrigerators, home appliances, generating sets etc).
Before lending money, banks and other credit grantors look through a consumer’s credit history. It is basically a record of how you have paid your bills and met other financial obligations, to indicate if you will repay a new loan. Sometimes they need to take decisions quickly and these reports can be very lengthy so, they use the credit score.
The same way you have a Grade Point Average (GPA) number that sums up your performance in the university, all grades, including failed grades, passed grades and distinctions are added together and then those numbers are averaged which gives you a GPA. A credit score is just like that.
A credit score typically ranges from 300-850, so the higher your credit score, the better your chances of being accepted for credit or loans at the best interest rate. The following are used to calculate your score at a point in time:
The higher your credit score, the better chances of being accepted for credit or loans at the best interest rate.
So that bank account you left dormant? You might need to visit your bank and close it properly. Even delayed payments on your utility bills could have a negative effect on your credit score.
Would you like to know your credit score? Simply visit our website https://www.crccreditbureau.com/login to request your credit score. You can also get an instant summary of your credit report using the CRC Mobile Credit check by dialing *565*8# on your MTN line directly linked to your bank account.