A credit bureau is basically like a data hub that gathers, evaluates, and manages credit information about people and businesses
The overall functions of credit bureaus in Nigeria include;
a) Data collection: Credit bureaus obtain data concerning credit profiles of individuals and businesses such as credit histories and other relevant information from a variety of sources.
b) Credit reporting: Upon collection of the above data, it is then compiled into comprehensive credit reports that can be consumed by both borrowers and lenders.
c) Credit scoring: Credit scores are simplified methods of risk assessment whereby creditworthiness is measured and represented by a three digit value.
d) Fraud prevention: Through monitoring of credit applications and behavioral analysis of borrowers, credit bureaus are able to detect, prevent or report instances of data breach through identity theft or fraud.
e) Dispute resolution: Credit bureaus possess the mandate to effectively investigate and resolve credit related disputes brought about by inaccuracies and discrepancies in credit reports.
f) Credit education: Credit bureaus provide adequate resource material beneficial in the promotion of financial discipline among individuals.
g) Clear defaulters: Credit bureaus can clear the names of defaulters in the event that they meet their financial obligations by clearing an outstanding balance.
Importance Of Clearing Name From Credit Bureaus In Nigeria
Clearing your name from credit bureaus is crucial especially in regards to maintaining a positive credit score.
Prolonged blacklisting with credit bureaus as a result of loan default or inaccuracies in your credit report can have negative consequences listed below
i) Denial of credit – Being blacklisted by credit bureaus may portray poor financial management that can be a basis for loan denials by lenders.
ii) Credit score reduction – Being blacklisted by credit bureaus may lead to decline of creditworthiness represented by a low credit score denoting a risky borrower.
iii) Minimal job opportunities – Being blacklisted by credit bureaus may raise concerns regarding your financial responsibility especially if credit checks are mandatory during hiring exercises thus lowering chances of securing job placements.
iv) Loan limit reduction – As a result of being blacklisted and subsequent credit score reduction, lenders may opt to mitigate future loan default risks by reducing loan limits to accommodate your current financial standing.
How To Check Credit If Your Name Is Blacklisted By Credit Bureaus In Nigeria
Suspicions arising from the possibility of your being blacklisted should be promptly validated through obtaining a credit a credit report from any of Nigeria’s licensed Credit bureaus listed below;
1. Credit Registry
2. CRC Credit Bureau
3. FirstCentral Credit Bureau
How To Clear Name From Credit Bureau In Nigeria
Once you have ascertained your credit status, you can proceed to clear your name depending on your scenario
Scenario 1: Blacklisting Due To Loan Default
If your name features on the default list due to missed payments, follow the below procedure to clear your name.
i. Identify the lender who has blacklisted you
ii. Clear the outstanding balance
iii. Verify with the lender that the outstanding balance has been cleared
iv. Request for a batch number from the lender
v. Submit the batch number to the credit bureau for updating of your records
Scenario 2: Blacklisting Due To Inaccurate Credit Report
If your name is blacklisted as a result of incorrect information, follow the below procedure to clear your name by filing a dispute with the respective credit bureau.
i. Obtain credit report
ii. Identify the errors on the report
iii. Provide supportive evidence towards the dispute
iv. Submit dispute along with supporting documents
v. Wait for feedback on the dispute resolution within the credit bureau’s timelines.
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