What is a Credit score and Why does it matter?

Growing up, I heard people complain about how hard it is for Nigerians to access credit. Honestly, given our history with debt, it’s not surprising.

One major issue is the lack of a centralized financial data system. So, when you suddenly need ₦1 million, lenders hesitate because there's no way to prove you’ll actually pay back.

A credit score is a number that shows how trustworthy you are when borrowing money. It’s like a financial report card that tells lenders whether you are likely to repay a loan.

It’s simple: Start transacting!

Open a bank account – Your financial activities are linked to your Bank Verification Number (BVN), which is used to track your creditworthiness.

Use credit products – Take a loan, use Buy Now, Pay Later (BNPL) services, or borrow for realistic goals.

Make timely repayments – Paying back loans on time (or earlier) builds a strong credit history.

On-time repayment increases your score – Lenders see you as responsible.

Late repayment reduces your score – Late payments make lenders view you as risky.

Missed payments are a red flag – Defaulting on loans damages your credit score.

Easy access to loans – A high score makes it easier to get loans for cars, houses, or business.

Proof of financial responsibility – It shows you’re disciplined with money.

Better loan offers – A good credit score can get you lower interest rates and higher loan amounts.

You can check your score through registered credit bureaus in Nigeria. Just visit their website and enter your BVN:

Now that you have checked your credit score using any of the bureau above, what does the number mean;

750 – 850: Excellent – You’re a low-risk borrower.

650 – 749: Good – You’ll likely get loan approvals easily.

500 – 649: Fair – You may get loans, but with higher interest rates.

Below 500: Poor – You may struggle to access credit.

Maintain it! Keep paying loans on time, avoid unnecessary borrowing, and don’t max out your available credit.

Start small: Take and repay short-term loans.

Avoid defaults: Pay all outstanding debts.

Monitor your financial activity: Don’t over-borrow, and always pay on time.

A good credit score opens doors to financial opportunities, so take it seriously!