Your Biometric Verification Number BVN contains more information than you realize. One of the most essential pieces of information it holds, along with your fingerprints, pictures, and other biometric data, includes your credit rating.
Credit scores are a three-digit number that ranges between 300 and 800 (using the VantageScore model), which banks and other financial institutions utilize to determine the amount of risk involved in giving a loan or credit to applicants for one. The lower the score, the more risky, and it indicates the possibility that you’ll default on the payment and reverse. The scores are scored using excellent good, fair, average, or poor. In simple terms, it represents your creditworthiness.
Below are the creditworthiness scales
780 and above Credit score of 720 or above
690-719: Credit score good
630-689: Fair credit
300-629: Credit with bad credit
Even if you download an uninspiring loan app for your phone to make an application for a loan, that is likely the method that the app uses to determine the amount of loan you are eligible for or if you’re eligible for any loan at all.
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Good vs . Bad credit score
High Credit Score The loan history determines your rating. If you have a track record of paying your loans on time, clearing the debt balance, and making loans that are based on a reasonable basis, You will have a high credit score. A credit score with credit utilization that is less than 30 percent is considered to be an excellent score.
Bad credit score. Also, failure to repay your loan when due can result in a poor score for your BVN. A credit score that could be better generally is below the 630 mark on a scale ranging from 300-850 for the two most popular scores, FICO as well as VantageScore. Scores between 630 and 689 are considered to be fair credit.
Essential to Have a Great Credit Score?
- First, it allows you to obtain loans from lenders. If your loan application is frequently rejected, it’s most likely because of an unsatisfactory credit score.
- Increase the credit limit on credit cards. Although they’re less widely used in Nigeria, You can get credit cards through an express request to your bank to get more significant credit limits. A high credit score is an indication of your creditworthiness. You can benefit from it through more significant credit limits on your credit cards.
- Are you eligible for a pre-approved credit offer? A high credit score can increase the chances of receiving pre-approved loans with low-interest rates from banks and financial institutions.
How do you check the credit scores of your clients in Nigeria?
You can get one credit report for free each calendar month through First Central Credit Bureau. For free credit reports in Nigeria, you can use one of the following sources:
Visit the First Central Credit Bureau online gateway and request a FREE credit report with your BVN and email address.
You can get an annual credit report for free each month, which allows you to examine your credit score and work to enhance it.
Who Can See Your Credit Report?
Anyone with the need and your BVN number can download it on the internet and share your BVN with employers, banks, prospective tenants, etc.
How do credit scores impact loans?
For obvious reasons and practical purposes, it is true. The first thing lenders should look for when evaluating the request for a loan is the credit rating. This is why it’s essential to be attentive to the credit score on your report. It will determine the likelihood that lenders and creditors are willing to work with you and what kind of interest you can get for financial services!