What is a credit score?
A credit score is a number that helps a lender
predict how likely an individual is to repay
a loan, or make credit payments on time. A
credit score is a number that changes as the
elements in a credit report change. A credit
score has broad use and impact. Your credit
past is your credit future. In Kenya credit
scores vary between 200 and 900. With the
lowest being the most risky while the highest
less risky
What makes up a typical credit
score?
In Kenya the Credit
Reference Bureaus
are the most misun-
derstood institutions
as some people carry
the mentality that it is
a place where default-
ers are taken to be
blacklisted contrary
to their very own defi-
nition!
Using the Source as Fair Isaac and Consumer
them and come up with a credit score.
Federation of America, 2005, the chart below
captures what makes up a typical credit score.
Credit reference Bureaus collect your
financial and personal information and
The metrics and algorithms that go into
document it on your credit report.
collating your credit score are changing rapidly,
so it’s good to keep up to date on how they are
This information is then used to calculate
changing and what you can do to preserve or
your credit score, which includes: Your
improve your credit score.
personal details such as your age, location;
The type of credit providers you have used
like bank or utility company;
A few things you need to know
about how you are scored
A credit score is a number, based on an
analysis of a person’s credit file, to represent
the creditworthiness of an individual. Lenders
use credit scores to determine who qualifies for
a loan, at what interest rate, and what credit
limits are applied.
Credit scoring models are statistical analysis
used by credit agencies or bureaus to evaluate
your worthiness to receive credit. The agencies
select certain statistical characteristics found
in a person’s credit payment patterns, analyze
60 MAL22/18 ISSUE
items reporting; people with similar
names or family members, fraudulent
use of your particulars to acquire loans
and items reported in bankruptcy still
showing balances owed.
Correcting credit errors
It is upon every person to download and
correct erroneous items in their reports
as follows; circle the incorrect items on
your credit report, write a letter to the
CRB, telling them which information
you think is inaccurate.
Provide supporting documentation,
send all materials by certified mail, send
a similar letter to the creditor whose
reports you disagree with, the CRB
will conduct an investigation and if
negative information is accurate, it can
stay on your report for 5 years. Tatua
Centre provides a whole mechanism of
having your wrongful report corrected
and are very kind in addressing the
CRB related errors. You should contact
them for assistance if need be.
How to take action to
The amount of credit you have borrowed;
The number of credit applications and preserve and improve your
enquiries you have made; Any unpaid credit score
or overdue loans or credit; Any debt
agreements or personal insolvency A friend downloaded his credit report
agreements relating to bankruptcy
from a local CRB and realized that
his score was 246 on a score rating of
between 200 and 900 and he was not
Errors in your Credit Report happy about it so he called me for
assistance.
It is claimed that 30% of all credit reports
contain “serious” errors that result in the On asking him a number of questions,
denial of credit, such as: paid items still I realized that he had defaulted once
showing an unpaid balance, someone else’s when he quit his job and from then he