Borrowers with elevated credit scores can quickly negotiate favorable loan terms. In Kenya, borrowers are qualified to one free credit each year, and any other reports asked within the year will be assessed. If you plan to reserve a loan in the future, you must keep a good credit score.
Through the Credit Reference Bureau (CRB) Rules, the Banking Act needs all Kenyan Banks, savings, &credits Cooperative and microfinance institutions to offer and periodically update their client’s credit information. Accordingly, these financial institutions are required to provide this details to all licensed CRBs monthly.
Tips for maintaining a good credit score
To emphasize some of the top tips for keeping a good credit score:
Pay bills on time
If you have loans and monthly repayments, make it infallible that you pay them on time. The first thing that a lender will examine at before giving you a loan is your earnings history. If you have an account of defaults or poor repayments, your score will be lower, and you may not allow for a loan.
Get copies of your credit report
Make sure that you know the distinction bureau your bank is noted with and get your credit report. It guarantees that you are acquainted with the terms that your lender will operate. It will also help you identify mistaken entries that could hurt your credit score.
Reduce existing debts
If you have a loan, make a attribute of reducing it. This will completely reflect on your credit statement and is an indication that you are a suitable borrower and payer. Further, this may help you get lower interests.
Avoid multiple loan applications
Your credit report will show any other mobile loan apps you have involved to. Applying for multiple loans within a temporary period will give the appearance that you are a risky borrower. This decreases your chances of getting a loan.
Avoid credit cards
Try as much as likely to settle your debts directly. The use of credit cards will only renounce you with high-interest rates in the hereafter. It is important to note that almost 30% of your credit score relies on the amount you owe.
Keeping the good credit score is very important to loan applications. A good credit score permits you to access better loans & credit services at a lower curiosity rate. It also offers you added benefits such as low rates on car insurance, and you also get a more elevated chance of easy loan approvals.
List of Licensed Credit Reference Bureaus in Kenya
Presently, there are only three licensed credit authority bureaus in Kenya:
To register with Metropol, you can dwell their site Metropol.co.ke. Alternatively, you can register by just dialing #433# using your mobile phone. The service is only functional to Safaricom customers. A registration price of Kshs.100 is required. You will then obtain a code via SMS, which you will use to access your credit information on their site.
Register via their website crbafrica.com or transunionafrica.com. Alternatively, send your full name to 21272 at the price of Kshs.50.
Register by visiting their website credit info.co.ke, and you will get your credit information via email.
Benefits of Maintaining a Good Credit Score
You can endure with a bad credit score, but feel me, it is not always easy, and most definitely, it will cost you. Nevertheless, maintaining a good credit score will enable you save money and make your life more comfortable.
If you are in short of motivations why maintaining a good credit score is important, here are some advantages to having a good score:
the low interest rate on loans & credit cards
better opportunity of loan approvals
more negotiating leverage
more elevated loan limits
better car insurance rates
cheaper utility benefits
effortless leasing of accommodation
I have just supplied you with a highlight of the top advantages of a good credit score.
What is the recommended credit score?
As a borrower, you must enlighten yourself with your credit rating. Through this, you can improve your chances of acquiring favorable business and personal funding. Furthermore, you are guaranteed to get higher and more workable loans with a high credit score.
The credit scores range between 100/ 900. If your score is under 400, then your probabilities of getting a loan are tiniest. Such a score indicates that one has a history of defaulting on payments.
A score of 401 – 600 means that the borrower has not defaulted on any payments, but they have descending chances of obtaining a sufficient loan. The borrower, in this point, is considered to be high risk.
However, a score of 700 upward will get you a ticket to more profitable loans. With such a score, you permit for a loan of your choice. The loans are also presented at a friendly term.
Borrowers in Kenya have allowed tone-free credit reports per year. Any other information requested within the years will be presented at a fee of Kshs.500.
Maintaining a good Credit Score is therefore essential for anyone wishing to guarantee a loan. Therefore, maintain a high score and get a high loan with friendly interests.