The word “Credit score” is not a common term in Nigeria hence, the need to define it.
According to Wikipedia, a credit score is a numerical expression based on a person’s credit files’ level analysis to represent an individual’s creditworthiness. A credit score is primarily based on a credit report, information typically sourced from credit bureaus.
A credit score is used to determine or assess an individual’s worth, more like net worth. It is a combination of an individual’s credit background, which includes the number of accounts the individual has, the amount of money the person borrowed in the past, how quickly they were able to pay back, the accumulation of payment/debt history, and many more.
A credit score is used by many companies, especially money lenders, financial institutions, insurance companies, government parastatals etc. These organizations use credit scores to determine who is qualified enough to get a loan, what interest rate should the individual be given, who can generate better revenue and who can be trusted.
Points to put into consideration to improve your credit score
The higher the credit score, the higher the opportunity an individual has to get loans from financial institutions and gain the trust of other organizations.
- To improve your credit score, always make sure you clear all errors on your credit report. If there are any mistakes on your credit report, ensure it is fixed as quickly as possible. Doing this will improve your credit score. Errors on credit scores include filling in the wrong information, not settling past obligations as and when due, etc.
- Another way to improve your credit score is by paying your bills in due time. As said in the definition, the credit score includes your debt/payment history. If bills are not paid on time, it will reduce the individual’s credit score. Pay off your debt on time rather than postponing it.
- It is also important to create a spending limit and spend less than your spending limit to increase your credit score. That’s quite tricky, but it is achievable and essential.
- Check your credit report regularly. The only way you can detect any error on your record is if you check your report regularly. That way, you can lodge a complaint to the appropriate authority and have it settled in the fastest time possible.
- It is also essential to keep the balances on your credit card at a low percentage to improve your credit score.
How improving your credit score can affect your quality of life
A credit score is a vital aspect of an individual’s life, and it should not be taken with levity.
A low credit score could deprive you of the job of your dreams. Some employers run a credit score check on their employees. If you are not up to the company policy’s standard or level, you may not be hired.
If you need to take loans from lenders or financial institutions, your credit report must be good enough to get a loan.
For some lenders, if your credit score is low, your loan’s interest rate may be increased. You will be left with two options in such situations, either you take the loan with a high interest rate, or you don’t get it all.
The way you pay your bills will be affected if you don’t have a good credit score. Remember to pay your bills on time to keep a good credit score. Now, imagine what will happen if you don’t pay your bills on time. Your credit score will drop, which will not leave a good impression on your credit report.
Having a poor Credit Score is means that the chances that you will get a loan approved are low. However, if you get a loan approved, it will come with a higher interest rate and stiffer penalties. Also always ensure that all bank charges are paid and inactive accounts closed where their use is not required.
Having a good credit score will also enable you to register and get loans on the MySpecta Platform. Beyond getting loans, PayWithSpecta creates an opportunity for you to make purchases for things that are important to you without having to wait till you can raise the funds in full.
The ability to pay for something you need urgently, can open up doors and enable you to live your best life without having to wait. Waiting can sometimes mean that you lose a good opportunity that could have made a difference in the quality of your life.
Having a partner like PayWithSpecta helps you take advantage of some of the opportunities that come along.