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
A 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:
- Transunion
- Metropol
- 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.
- Pay
Ksh.50 through PayBill Number 220388
- Enter
your ID number as Account Number
- You
will receive a confirmation message with unique code details, a Reference
Number, and a particular link.
- After
registration, Dial *433#
- Input
your Identification Number.
- 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.