Your credit score is important in determining if you meet the requirements to access a bank loan in Nigeria
Improving your score can be achieved by following these steps:
- Pay bills on time: Late payments can have a major impact on your score, so make sure to pay all bills on time.
- Keep credit card balances low: High credit card balances can indicate that you’re using too much credit and can hurt your score.
- Limit new credit applications: Each time you apply for credit, it shows up as a hard inquiry on your credit report and can lower your score.
- Monitor your credit report regularly: Check your credit report for errors and dispute any inaccuracies with the credit bureau.
- Pay off debt: High levels of debt can lower your score, so focus on paying off debt and reducing your credit utilization.
- Consider a secured credit card: A secured credit card can help you build or rebuild your credit history if used responsibly.
Remember, improving your credit score takes time and consistency. Stay vigilant and persistent with these steps, and your score should increase over time.
How your Credit score is calculated
A credit score is calculated based on several factors, including:
- Payment history: Late or missed payments can negatively impact your credit score.
- Credit utilization: High credit utilization, or using a large percentage of your available credit, can lower your score.
- Length of credit history: A longer credit history can increase your score.
- Types of credit: A mix of different types of credit, such as loans and credit cards, can boost your score.
- Recent credit inquiries: Too many recent credit inquiries can lower your score.
These factors are typically weighed differently by different credit bureaus, so a specific score can vary between bureaus. However, the information used to calculate the score is usually the same. The StartCredits score builder will help you to learn the process and how to improve your score.
Improving your credit score is an important part of increasing the availability of loans to you, there are also other factors to optimize in order to qualify for bank loans.