Your credit history is a record of monies that you have borrowed, whether you repaid, and whether you repaid on time.
After this analysis is done on your credit history, your credit score is then generated.
Your credit score is a single number based on the information from your credit history that lets lenders know how risky it is to lend money to you compared to other borrowers.
Your credit history goes beyond telling the lender whether to reject or accept your application, it can also prompt the lender to give you loans at a higher or lower interest rate – depending on the level of risk calculated.
Not only can having a good credit score save you tens of thousands of Naira in interest over your lifetime, in the nearest history in Nigeria, your credit score may be used to determine whether you get an apartment, car insurance, or even a job.
Remember when you were told by your mummy that a good name is better than riches? She was right.
Let’s say your good name = a good credit history.
Here’s a list of 5 steps you can take to preserve your credit history
#1: Only take loans when you need them
#2: Don’t take the amount you need, take the amount you can repay comfortably
#3: As much as possible, limit your loans to one at a time
#4: Avoid really high interest rate loans as a result of short tenor, space out your loans conveniently enough
#5: Know your credit history; this final one might sound a little strange, however, you can get your credit history from independent bodies that collect this data from financial partners.