Let’s be honest, a lot of Nigerians don’t think about their credit score. Many only discover it exists on the day a loan application gets declined.
That confusing message “Sorry, you’re not eligible” often has a quiet reason behind it which is your credit score.
So What Exactly is This Credit Score?
Think of your credit score as your financial reputation. It’s like your street credibility in the money world. It tells lenders how trustworthy you are when it comes to borrowing and repaying money.
In Nigeria, credit scores are provided by agencies like CRC Credit Bureau, Credit Registry, and First Central Credit Bureau. Your credit score usually ranges between 300 and 850, and the higher it is, the more lenders trust you.
Here’s a quick breakdown:
• 750 – 850: Excellent: Lenders fully trust you with credit
• 700 – 749: Good: You’re seen as a low-risk borrower
• 650 – 699: Fair: You might get loans, but often with higher interest rates
• 600 – 649: Poor: Lenders will be cautious with you
• 300 – 599: Very Poor: Your chances of getting approved are pretty low
Generally, anything from 700 and above is considered a good score, while below 650 is seen as poor.
Your score is affected by things like how consistent you are with repayments, how much you currently owe, how long you’ve used credit, and how often you apply for new loans.
3 Signs Your Credit Score Might Be in Trouble:
Bad credit doesn’t always show up as a big red flag. Sometimes, it creeps in quietly. Here’s how you can tell when something’s off:
You’re Getting Loan Rejections, Even for Small Amounts: If short term loan applications of ₦10,000 or ₦20,000 keep getting declined or approved for smaller amounts than you applied for, your credit score may be the reason.
Why this might happen:
• You may have missed repayments or delayed them repeatedly, even by a few days.
• You’ve borrowed from too many lenders at once, which makes you look desperate for credit. In the financial world, a low score equals high risk, and lenders generally avoid risk.
Your Interest Rates Keep Getting Higher: Have you ever wondered why your friend got a loan at 15% interest while yours is 25%? That’s your credit score quietly working against you. Lenders charge higher rates to borrowers they don’t fully trust.
So, the lower your score, the more expensive borrowing becomes. Improving your score could save you thousands of naira in interest over time.
Loan Approvals Suddenly Take Longer: If getting approved for loans used to be quick but now takes forever, that’s another warning sign. A low credit score can trigger extra verification steps or delay approvals. In some cases, your name could appear on the national credit database blacklist, which makes borrowing elsewhere more difficult.
You see those “tiny” debts that you’ve ignored? That urgent ₦5,000 loan you took two years ago and forgot about? They count. Every unpaid balance or late payment slowly chips away at your credit score. And just like the saying goes, tiny drops of water make a mighty ocean.
Why Your Credit Score Matters:
In Nigeria, your credit score is one of the major criteria for you to access good financial opportunities. A strong score means:
1. Easier access to loans when you need them most
2. Better interest rates and higher limits
3. A stronger financial reputation across banks and Financial Institutions. When lenders see that you handle credit responsibly, they’re more willing to trust you again and on better terms.
How to Check Your Credit Score:
Checking your credit score in Nigeria is easier than most people think. You can do it right from your phone by simply visiting these websites:
How to Improve Your Credit Score:
Don’t panic if your score is low. It’s not a life sentence, just a sign that it’s time to build better financial habits. Here’s how to start:
1. Make sure to repay on time. Never delay loan or bill payments no matter how small.
2. Don’t juggle too many lenders. It makes you look financially unstable and desperate. This translates as risk to a lender, and you already know how lenders feel about risk right?
3. Check your credit report regularly, make it a financial habit you try to cultivate. So you can easily detect any errors or outdated information.
These small, consistent habits can raise your score and open the door to better financial opportunities.
At Zedvance, we’re more than just a lending company. We are your financial growth partner.
We are Licensed by the Central Bank of Nigeria (CBN) and have over a decade of experience in helping Nigerians grow financially with confidence and security.
Zedvance is right at your service.
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