What you Need to Know about Credit Scores

What you Need to Know about Credit Scores

Credit scores are numbers that reflect one’s likelihood of paying back credit. Lenders, like banks and credit card companies, usually look at one’s credit file when they calculate their credit score, which will show the level of risk in lending to the specific borrower.

Why Credit Scores Matter

Having a good credit score is important because it improves the chances of getting a loan to buy an apartment, or a car or get access to certain services such as medical care.

What is a good credit score?

For a score with a range between 300-850, a credit score of 700 or above is generally considered good. A score of 800 or above in the same range is considered to be excellent. Most credit scores fall between 600 and 750. Higher scores represent better credit decisions and can make creditors more confident that one will repay their future debts as agreed.

Factors That Affect a Credit Score

  • Payment history for past loans and credit cards, including the number and severity of late payments
  • Type, number, and age of credit accounts
  • Total debt
  • Public records such as bankruptcy
  • Number of new credit accounts recently opened

How to Improve Credit Scores

  • Pay all bills on time.
  • Get Credit for Making Utility and Cell Phone Payments on Time
  • Pay off debt so as to avoid defaulting on some of them.
  • Keep balances low on credit cards
  • Only open new credit accounts when needed so as to avoid creating too many hard inquiries on your credit report and reduce the temptation to overspend and accumulate debt.

WHAT’S A CREDIT REFERENCE BUREAU (CRB) IN KENYA

Credit Reference Bureau (CRB) is a company licensed by the Central Bank of Kenya to collect, store and collate credit information on individuals and companies from different sources and provide the information in form of a credit report upon the request of a lender, employer or any other interested party.

What is a CRB Report (CRB)

The CRB Credit Report is a detailed account of a customer’s borrowing as reported by all current credit providers. The Credit Report will list all the credit accounts (both past and present) and the repayment history for each of the accounts. A Credit Report is used by ALL lenders to determine whether or not to approve credit facilities to an applicant based on his past behavior. As such it is important to check your credit report at least once every 6 months if you are not actively borrowing. You are advised to check your credit report every month if you are actively borrowing

How to Check Your CRB Report/Status in Kenya

There are three credit reference bureau institutions licensed and with the authority to check on non-performing loans. Here is a list of these CRB institutions in Kenya:

  1. Transunion
  2. Metropol
  3. and Creditinfo

1. Checking via Metropol CRB status

Metropol CRB is a registered and trusted credit referencing firm in Kenya today. Besides credit referencing, Metropol also offers credit management, credit rating, and consultations.

First, you need to access the Metropol Website, download the Metropol Crystobol app, or dial *433#. Metropol is the most reliable platform when checking for CRB status online.

To register and check CRB status with Metropol, follow the procedure below.

  1. Pay Ksh.50 through PayBill Number 220388
  2. Enter your ID number as Account Number
  3. You will receive a confirmation message with unique code details, a Reference Number, and a particular link.
  4. After registration, Dial *433#
  5. Input your Identification Number.
  6. you will receive an SMS with your CRB Details

Another way to check CRB status on Metropol CRB is by visiting the Metropol Website or using the Metropol Crystobol app installed on your phone. This is only possible after making registration payments using the procedure described above.

Metropol gives a credit score of between 200 and 900. If your score is less than 400, it means you are a defaulter, and you can’t access loans from lenders. Scores above 400 mean you are a fair borrower, and lenders can give you money but with caution. Good scores close to 900 ways you are right, and repaying loans and lenders can quickly provide you with cash.

To check who forwarded you to the CRB by Metropol, you need to pay Ksh.50, and to obtain a clearance certificate, you need to pay Ksh.2200 after clearing your loans.

2. CRB Check Via CreditInfo Kenya CRB

CreditInfo Kenya is owned by Creditinfo International, part of the Creditinfo Group. Creditinfo Group is a multinational company operating credit bureaus across Europe, Central Asia, the Caribbean, The Middle East, and Sub-Saharan Africa.

Credit Info only gives information according to the messages they receive via email.

  • Fill in the credit request form to obtain your clearance certificate.
  • If your Credit Report contains the wrong information, you must fill out a Credit Report Dispute Form.

3. Checking CRB status in Kenya via Transunion

Transunion is an international credit referencing company based in Johannesburg, South Africa. The company has extended its services to other nations within Africa, including here in Kenya.

Transunion can be accessed through SMS line 21272 or the Transunion website. Also, you can access this platform through the Transunion Nipashe app.

The Nipashe app can be accessed from the google play store and installed on mobile devices.

To register on Transunion, follow this procedure.

  • Send your full names to 21272
  • Enter your ID number
  • Choose CC (Credit Information)
  • Wait for a reply Message with Credit status.

“Good” will mean you have are not blocked and have a good credit score, while “Default” will mean you are a defaulter and therefore you can not access loans.

How to check CRB status for free

You can also access a free credit report once a year from Transunion. However, you can access more than one report after paying Ksh.650 to PayBill 212121 and using your phone ID number as the account number.

To obtain a clearance certificate through Transunion, you will pay a Ksh. 2,200 fee to the PayBill number 212121 and enter your ID number as the Account Number. After paying, send your Mpesa message to cert@transunion.co.ke to claim your certificate.

Now that I have shown you how to check your CRB status, you will analyze your creditworthiness before applying for a loan. You should check your credit status with all three platforms since some lenders forward defaulters to all three bureaus.

What is a CRB certificate of clearance (COC)?

A certificate of clearance is a document that confirms that currently, a customer does not have a non-performing account.

Do you pay to have your record updated by a CRB?

NO: CRBs do not charge to have customer information on the CRB. Actually sharing data with CRBs is free for all lenders. Nevertheless, when a customer has a historical negative listing, a lender asks for a certificate of clearance (COC) from the CRB.

What are the reasons for getting a CRB kenya certificate of clearance?

A COC is meant to give the borrower peace of mind. A COC is required to present to a lender after being adversely listed, to apply for employment etc.

How long is a COC valid?

A COC is valid as at the date of issue. This is because CRBs receive information on a daily basis which could alter the customer information.

How much does a CRB Kenya COC (Clearance Certificate) Cost?

A COC costs Ksh 2200 which is payable through mpesa or to the CRB bank account

Who qualifies to get a CRB COC(Clearance Certificate)?

Conclusion

Checking your CRB status before applying for a loan will allow you to be able to manage your finances better and access loans at fair interest rates. You are entitled to one free credit report per year from Transunion. However, if you need more than one report, you will have to pay a small fee.


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