While the concept of credit scoring is similar to that in other countries, the Nigerian credit landscape has unique characteristics. 

Unlike the standardized FICO and VantageScore models, Nigerian lenders often use their proprietary credit scoring models.  

Determining a specific numerical value for a “bad” credit score in Nigeria is complex due to the varying scoring models used by different lenders. 

However, general indicators of a poor credit score include:

• Payment History: Consistent late or missed payments on loans. Lenders view borrowers with bad credit as a risk, which means they’re less likely to approve you for credit. Since banks and lending institutions typically have rigorous qualification standards for their products, getting approval for a loan can be difficult for anyone with a bad credit score.
• High Debt-to-Income Ratio: A high debt-to-income ratio is a red flag for lenders. It can lower your credit score and reduce your chances of loan approval.
• Multiple Loan Applications: Frequent loan applications can negatively impact your credit score.
• Public Records: Negative information like bankruptcies or judgments can lower your score.

How to improve a bad credit score

There are many ways to improve your credit score. Ultimately, it comes down to taking strategic action and consistently making financial decisions.

Here are six steps you can take to improve your credit profile:

• Check your credit reports: Regularly review your credit report for errors and discrepancies. You can access these reports weekly. Dispute any errors and identify the negative information bringing down your score so you know where to focus your credit repair efforts.
• Avoid late payments: Since payment history makes up your credit scores, paying your bills on time is one of the best ways to build and maintain strong credit. Set up automatic payments on your accounts to prevent late repayments.
• Avoid new credit: Avoid applying for multiple loans simultaneously.
• Use Credit Wisely: Responsible credit usage can help build a positive credit history.
• Reduce Debt: Lower your debt-to-income ratio by paying off existing debts.

Building a good credit score takes time and discipline. If you follow preventive measures against credit scores,  you can increase your chances of securing loans with favourable terms.

Are you experiencing difficulty checking your customer’s credit score? Tendar can help you.