The practice of sharing credit information among financial institutions was introduced to combat the high levels of Non-Performing Loans (NPLs) that has marred Kenya’s financial sector,
This initiative, dubbed Credit Information Sharing (CIS) is aimed at reducing risks and preventing the collapse of lending institutions due to unsustainable loan portfolios.
CIS impact has gone beyond risk management, ushering in a new era where individual credit scores play a significant role in accessing financial services.
The Expert View on Credit Score
By promoting responsible borrowing behaviour, the credit score system has become crucial in determining creditworthiness and offering favorable terms to borrowers.
Ruth Nyambuti, Head of Customer Service at Metropol Credit Reference Bureau, stresses the importance of actively improving one’s credit score.
According to Ruth, a strong credit score not only increases the chances of loan approval but also ensures access to more affordable credit facilities.
“Providers of money, goods and services on credit will be more than willing to offer you more credit at better terms when you have a good credit score backed by a timely repayment.
It’s important that every individual borrower as well as businesses be intentional about building a higher credit score,” says Ruth.
The Credit Score Matrix
The credit score system relies on comprehensive credit information shared by various financial entities, including commercial banks, Digital Credit Providers (DCPs), Saccos, Microfinance Banks, and Trade Companies.
This comprehensive approach provides lenders with a detailed understanding of borrowers’ credit behavior across both traditional and non-traditional markets.
It helps identify habitual defaulters and promotes responsible lending practices.
While financial institutions traditionally assess individual risk profiles, the CIS mechanism offers a broader perspective, enabling informed lending decisions.
Borrowers are advised to prioritize timely repayment of installments and borrow only what they can afford to pay back.
“With a higher credit score, you are considered a low-risk borrower thus increasing your likelihood of credit approval.”
Also Read: Crystobol App Strikes Gold in the Best Credit Score Monitoring App Category
Such responsible financial habits not only strengthen individual credit scores but also contribute to a healthier credit ecosystem.
Understanding Your Credit Score
The Credit Score, which ranges from 200 to 900, serves as a crucial indicator of an individual’s credit quality.
Higher scores indicate better creditworthiness, while lower scores may suggest challenges in debt repayment.
For example, a score of 200 – which is poor, indicates a history of late or missed payments.
Metropol CRB provides user-friendly options for Kenyans to access their credit information, including their Credit Score and full credit profile.
With a USSD code *433# an individual can request their Credit Report or download the Crystobol app from the Google Play Store.
Customers also have the option of visiting crystobol.metropol.co.ke for seamless access to Metropol CRB services.
As the demand for transparent credit information continues to grow, Metropol CRB’s efforts to enhance accessibility set a benchmark for the industry.
Metropol has reinforced its position as a trusted brand in Kenya, by providing individuals with the tools to understand and manage their credit.
