What is a credit score?

A credit score is a statistical number that reflects the information in your credit report. The score summarises your credit history and helps lenders predict how likely it is that you will repay a loan and make payments when they are due. Lenders may use credit scores in deciding whether to grant you credit, what terms you are offered, or the rate you will pay on a loan. Information used to calculate your credit score can include: The number and type of accounts you have ; Whether you pay your bills on time; How much of your available credit you are currently using; Whether you have any collection actions against you; The amount of your outstanding debt; and The age of your accounts.

What causes a credit score to change?

Your credit score reflects the information in your credit report, changes to your credit report may cause your credit score to change. For instance, if you pay your bills late or incur more debt, your credit score may go down. However, if you pay down an outstanding balance on a credit card or mortgage or correct an error in your credit report, your credit score may go up.


What is a credit report? A credit report is a record of your credit history that includes information about:

  • Your identity
  • Your name
  • Address
  • Date of birth
  • Possibly employment information
  • Your existing credit
  • Information about credit that you have, such as your credit card accounts, mortgages, car loans. It may also include the terms of your credit, how much you owe your creditors, and your history of making payments.
  • Inquiries about you. A list of companies or persons who recently requested a copy of your report.

Why is a credit report important?

Your credit report is important because lenders, insurers, employers, and others may obtain your credit report from credit bureaus to assess how you manage financial responsibilities. For example: Lenders may use your credit report information to decide whether you can get a loan and the terms you get for a loan (for example, the interest rate they will charge you). Insurance companies may use the information to decide whether you can get insurance and to set the rates you will pay. Employers may use your credit report, if you give them permission to do so, to decide whether to hire you.

Who collects and reports credit information about a consumer?

The Financial Services Regulatory Authority licensed a credit bureau as per the provisions of the Consumer Credit Act, 2016. Amongst its many roles, a credit bureau is by law permitted to gather and maintain the information about you that is included in your credit report. The credit bureaus then provide this information in the form of a credit report to companies or persons that request it, such as lenders from whom you are seeking credit.

Where do credit bureaus get their information?

Credit bureaus get information from your credit providers, such as a bank, credit card issuer, or other financial services providers as required by section 74 (1) which states that a credit provider shall submit consumer credit information to a credit bureau and may submit such credit information to more that one credit bureau. Section 74 (2) states that, upon entry into or amendment of a credit agreement, the credit provider shall submit to a credit bureau consumer credit information, in the prescribed manner and form, and within the prescribed time

a) The name, principal business address, and registration number of a credit provider;

b) The name and address of the consumer;

c) If the consumer is – A natural person, their identity number, or in the case of a person who is not a citizen and who does not have an identity number, a passport number; or

A company or body corporate, its registration number or tax certificate number;

d) If the agreement of a credit facility, the credit limit under that facility, and the expiry date of the agreement, if any.

Each credit bureau gets its information from different sources, so the information in one credit bureau’s report may not be the same as the information in another credit bureau’s report.

How can you build your credit history?

It is important to begin building your credit history early. If you do not have a credit history, it is much harder for lenders or credit providers to make a decision about you, since they have nothing to base it on.

One of the best ways to build a credit history is to apply for a credit card and make your payments on time. It can sometimes be hard to get a regular credit card if you have had trouble with credit in the past.

An option is to apply for a secured credit card.

You need to provide the credit card issuer with a deposit. When you make payments on the balance of a secured credit card, it will be reported to the credit reporting agencies in the same way as a regular credit card.

Access to credit does not necessitate misuse. Consumers should be aware that they have to exhibit responsibility when dealing with credit. Failure to do such can either build or ruin your credit history.