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2020 Financial Planning: Do You Know Your Credit Score?

2020 Financial Planning: Do you know your credit score?

The year 2019 is now behind us, and many Kenyans are focused on new beginnings, new targets and revisiting old targets. At this time, it is common for many Kenyans to take a step back to review their financial positions and plans for the year.  One area that often gets overlooked in this process is the subject of examining one’s credit status.

Borrowing Options: So why do Kenyans often fail to prioritize personal credit report reviews?  Well, perhaps it is because Kenyans have obtained loans via two main avenues in the past.  The first, and most common, approach was to explore informal options such as borrowing from friends and family or getting “soft credit” by postponing payments and repayments to friends & family, schools, landlords, and the local kiosks, etc.  In this instance, an individual’s creditworthiness was assessed based on their reputation with the possible “lender / lenders”, leading to a limited need for knowing one’s credit score.

The second borrowing avenue has been to approach a range of lenders for loans. In the past, the Kenyan loan market was dominated by banks, microfinance institutions, SACCOs and shylocks.  However, increasingly the lending space has been also been flooded by a vast array of digital lenders. According to a recent survey conducted by FSD Kenya, there are now close to 50 digital lending apps in Kenya.

Digital lenders have gained significant popularity over the past 3-4 years, attracting enhanced interest from banks and Mobile Network Operators.  The digital lending platforms rely almost entirely on electronically available information such as credit scores and mobile money transaction activity. Therefore, although borrowing has become increasingly convenient, so too has the Kenyan borrower’s risk of getting locked out of the credit market due to being blacklisted based on information held by the 3 licensed credit rating bureaus in Kenya.

The First Step to Taking Control:  The options available for obtaining one’s credit report in Kenya are not always widely publicized. Many Kenyan borrowers do not take obtain their free annual credit reports from each of the licensed credit rating bureaus. So, in 2019, obtaining one’s credit score would be a good step to planning borrowing needs.  With this in mind, below are the options available for ordering your credit reports from Kenya’s 3 licensed credit rating bureaus (CRBs):

  1. Transunion CRB (website: https://www.transunionafrica.com/kenya )
    1. The website gives instructions on how to obtain a copy of your credit report.
    2. Automated report options include registration and requesting reports via an SMS to: 21272.
  2. Metropol CRB (website: https://www.metropol.co.ke/ )
    1. The website gives instructions on how to obtain a copy of your credit report.
    2. Automated report options include registration and requesting reports via dialling *433#.
  3. Credit Info CRB (website: https://ke.creditinfo.com/)
    1. The website gives instructions on how to obtain a copy of your credit report.

NOTE: be sure to check the respective company websites in case these details have changed. Here’s to wishing you a prosperous 2019!

www.comparerateskenya.com Lead Contributor

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