Thanks to digital technology and the introduction of bank verification number (BVN), credit score bureaus are springing up in Nigeria to help lenders quickly assess how likely it is for a given individual to repay a loan. An individual’s credit score is either an asset or a liability. Here is how it is calculated.
One of the companies leading this charge is CRC Credit Bureau. The CRC Score is a digital method of determining the creditworthiness of customers before granting them credit facilities. Financial institutions are taking this seriously. So should every person.
The CRC Score is a numerical representation of how risky it is, for lenders and creditors to do business with individuals. It is a three (3) digit number that ranges from 300-850, with 300 being the lowest and 850, the highest.
Many Nigerians ignore or do not understand how credit scores are calculated. A credit score is derived from the information on your credit report, which details your credit history over a period. The elements from your credit report that shape your credit scores are called credit score factors.
The CRC Score is powered by the Fair Isaac Corporation (FICO), an American company with over 50 years’ experience in data and analytics. FICO scores are the most widely used credit scores worldwide. CRC Credit Bureau in partnership with FICO developed a unique credit rating system for the Nigerian market that helps lenders make quick and informed credit decisions and for individuals the knowledge of what their credit status is.
For the CRC Score, the following ranges are considered standard: exceptional, 800 and above; very good, 740-799; good, 670-739; fair, 580-669 and poor, 579 to lower.
Taking the above ranges into consideration, how then is the CRC score calculated? The following factors are used to calculate a CRC Score using the FICO methodology built uniquely for the Nigerian market:
Payment history (35%): How regularly individuals pay their bills or debt obligations to lenders. The amount owed (30%): Outstanding debt calculated in all the individual’s accounts (loan accounts, current accounts with debit balance).
The pursuit of new credit (10%): how often an individual applies for new credit-related facilities over the last two years. Length of credit history (15%): A longer Credit history with up to date repayments in relation to other parameters increases Credit Score, and credit mix (10%): The mix of Credit types like credit cards, personal loans mortgages etcetera increase your credit score.
Regular requests for your CRC Score should be made if you intend to apply for a loan or credit facilities in the future. Checking your CRC score at least once a month is advisable.
The CRC Score powered by FICO is easily accessible to everyone and can be bought via the CRC Credit Bureau website for four hundred Naira only (N400.00). Knowing your CRC Score, makes you better prepared before applying for a loan and is the first step in taking control of your financial reputation.
To request for your CRC score visit the CRC website page https://www.crccreditbureau.com/product/crc-score-individual to register and pay for Credit Score and have it delivered to your email address in a matter of minutes
STEPHEN ONYEKWELU
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