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The Central Bank of Nigeria (CBN) has mandated the enrolment of other financial institutions (OFIs) on the credit risk management system (CRMS).

CBN gave the directive in a circular published on its website and signed by Chibuzo Efobi, Director, Financial Policy and Regulation Department.

CRMS is the practice of mitigating losses by understanding the adequacy of a bank’s capital and loan loss reserves at any given period.

With this, the CBN and OFIs would be able to track any bank debtor to know if such a debtor owes another institution.

OFIs include development finance institutions (DFIs), microfinance banks, (MFBs), primary mortgage banks (PMBs), and finance companies (FCs).

“All OFls are hereby informed that the provisions of the regulatory guidelines for the redesigned credit risk management system for commercial, merchant, and non-interest banks in Nigeria issued on February 27, 2017 (Ref No. FPR/DIR/GEN/CRM/06/012) and the additional regulatory guidelines for the operation of the redesigned CRMS issued on September 10, 2018 (Ref No. FPR/DIR/GEN/CIR/07/007) have become applicable to all OFls,” the circular reads.

“Accordingly, and more specifically, enforcement of Section 3.1(a) of the guidelines on CRMS that captures the ‘submit before disbursement’ requirement shall commence on August 1, 2022.”

Section 3.1(a) of the regulatory guidelines for the operation of CRMS states that “rendition on the CRMS is required before the disbursement of any loan or credit facility.

“This process of submission does not interfere with any participating bank’s decision to extend a loan or credit to its customer. Consequently, rendition is only required after approval to disburse is given.”

The apex bank also reminded OFIs to ensure that all their customer accounts comply with the 10-digit Nigeria uniform bank account number (NUBAN) format, and are tagged with bank verification number (BVN) or tax identification number (TIN) for individual and non-individual accounts of the account holder and profiled on the Nigeria Inter-Bank Settlement System’s (NIBSS) industry customer accounts database (CAD) not later than June 20, 2022.

“These remain prerequisites for enrolment onto the CRMS,” CBN said.

CBN further warned that failure to comply with the stipulated timelines would attract appropriate sanctions.

CBN dismisses report of stopping overseas school fees, Form A withdrawal

The Central Bank of Nigeria (CBN) has dismissed media reports that it will withdraw ‘Form A’ discounted foreign exchange (FX) window and effectively stop the funding of overseas school fees, saying it will continue to meet all legitimate requests.

The apex bank urged parents, students, and other members of the public to disregard the reports as false and speculative.

The reports suggested that payments of overseas tuition fees from Nigeria will cost more from January 2023 due to the purported withdrawal of the ‘Form A’ with effect from December 31, 2022.

A Manchester-based university reportedly issued the advisory urging students whose tuitions were paid from Nigeria to pay up a large portion of their outstanding fees as possible, through Flywire, before December 31, 2022, claiming that the Central Bank planned to withdraw the “Form A” discounted rate.

Through the window, parents are able to access FX at a discounted rate to fund tuition and other school expenses of their wards abroad.

But the CBN described the reports which quoted the UK tertiary institution as unfounded. It urged Nigerians “to take advantage of the Central Bank Form A discounted rate while it is still available.”

CBN Director, Corporate Communications Department, Osita Nwanisobi, told journalists that the purported advisory and report were false, misleading, and speculative.

While also reminding all stakeholders that front-loading (for both visible goods and invisible) was contrary to the provisions of extant regulations, the CBN spokesman assured them that the bank would continue to meet all legitimate demands for foreign exchange.

The spokesperson urged all authorised dealers to ensure that payments for tuition outside Nigeria are made no earlier than 30 days prior to the due date, even as he charged them to put in place measures to forestall abuse.



NCC, Google collaborate on internet affordability

The Nigerian Communications Commission (NCC) and Google Global Services Nigeria have expressed determination to work together to actualise the national targets for ubiquitous broadband access in furtherance of Nigeria’s digital transformation policy.

This aligns with and gives unambiguous expression to NCC’s strategic vision plan centring on strategic partnership and collaboration with necessary stakeholders to achieve regulatory objectives.

The two organisations made the commitment when a delegation from Google Global Services Nigeria paid a courtesy visit to the Commission’s Head Office in Abuja to deliberate on viable collaborative interventions to propel digital transformation across the country and Africa.

Receiving the Google delegation, the Executive Vice Chairman and Chief Executive Officer (EVC/CEO) of NCC, Prof. Umar Garba Danbatta, said the commission’s expectations, initiatives, and vision towards increasing broadband penetration, quality of service, advancement of a digital economy and commitment to improving national security through technological advancement are at the front burner of its regulatory interventions.

Underscoring the importance of such synergy between the commission and Google, Danbatta, who was represented by the Executive Commissioner, Technical Services (ECTS), NCC, Ubale Maska, said the Commission looked forward to making the initiatives of both parties more impactful by enhancing cooperation between the NCC and Google Nigeria for quantifiable and remarkable impact.

The EVC expressed optimism that Google’s investment in the subsea cable, Equiano, which is expected to land in Nigeria by end of April 2022, will be more impactful in driving NCC’s ongoing implementation of the Nigerian National Broadband Plan (NNBP), 2020-2025, aimed at increasing broadband penetration to 70 per cent by 2025.

“I am hopeful that Equiano will have additional landing points in the hinterlands through collaborative efforts with the licensed Infrastructure Companies (InfraCos) to reduce retail data prices significantly and thereby complementing the commission’s efforts at ensuring affordable Internet services are available to boost the Commission’s ongoing broadband policy drive,” he said.

Earlier in her remarks, the Director, Google West Africa, Juliet Ehimuan, who led the delegation to NCC, commended the NCC for its consultative approach in formulating regulatory policies, as an engine room for optimal delivery of telecommunications services that will in turn impact the digital economy drive of the government.

She particularly applauded the commission for its seamless, fair, credible, impartial and successful auction of the 3.5GHz spectrum for the deployment of Fifth Generation (5G) in Nigeria, stating that it is evident that both the NCC and Google share a common goal.

According to Ehimuan, demands for Internet services have increased the need for more capacity, and sustainable collaborations with all relevant stakeholders within the public and private sectors. She asserted that Google’s commitment of $1 billion across five years in various interventions will support digital transformation in Nigeria and across Africa.

Ehimuan stated that research has proven that Africa will have an additional 300 million Internet users and Nigeria will lead in that number, given its current statistics of over 141 million internet subscribers and broadband penetration of over 40.88 per cent as of January 2022.



Report warns rising prices of essentials could trigger social unrest

A report by SB Morgen, Nigeria’s geopolitical intelligence platform, notes that skipping inflation has never triggered political agitation in the country but warns the trend could change if the government does not take urgent steps to manage the current rising prices “responsibly”

The report, which traces the inflationary trend since Nigeria’s independence, explains the underpinnings of inflation, suggesting that the country has had productivity issues since 1970s.

“Drastic measures need to be taken with laser focus to improve the productivity of Nigerians and the Nigerian economy. This will be achieved by improving education, providing tools and infrastructure, and securing lives, property and property rights.

“Education will also include disabusing the Nigerian psyche from destructive mantra such as equating the strength of the economy not with its productivity but with the strength of the currency, mantras that became entrenched in the book years of the 1970s and which continue to be employed as a tool by a greedy elite to mobilise the people against reforms that would ultimately be better for the country,” the report states.

It stresses that as people’s purchasing power gets eroded and they are unable to purchase essential commodities, the fabric of social cohesion begins to tear. This, it says, increases social tension and political unease. It argues that this informs the priority attention modern economies give to maintaining price stability.

According to the report, Nigerian standard of living will improve significantly with improved productivity and a moderate inflation rate, which can only happen with reforms that reduce “structural productivity inhibitors”.

It doubts the possibility of meeting the single-inflation-rate target set by the monetary authority, saying that country only achieved the goal in 25 out of 62 post-independence years. “On a decade-by-decade basis, it is clear that our ability to achieve this has declined since independence,” it states.

It adds that the country only experienced deflation three times – between 1960 and 1969. In 1961, there was an inflation rate of -2.7 per cent while there was another negative inflation rate of 3.7 per cent in 1967 and another occurrence in 1968 (0.47 per cent).

It traces policy options taken by successive administrations to achieve a single-digit inflation rate, concluding that most of the approaches did not record much success. The discovery of hydrocarbon and subsequent oil boom, it states, played a key role in evaluating the role of money supply in price instability.

“Oil money had introduced a new paradigm into the Nigerian public psyche, one of an endless supply of money in a boom period. In 1974, the Udoji Award where the government essentially distributed money to civil servants led to a sudden increase in spending power,” it recalls, lamenting that the increase in money supply was not matched with commensurate productivity.

“The private sector that was the driver of production was unable to rise to meet the demand that the public servants flush with cash provided. In addition to this, the price controls instituted in 1971 were beginning to lead to severe shortages in essential goods as traders struggled to replace their goods at the prices the controls required them to sell at. Demand-pull and cost-push immediately drove inflation into the double-digit territory in response to this in 1974, reaching 12.67% and a black market began to thrive.”



Experts charge insurance professionals on industry’s development

Insurance professionals who gathered at this year’s 2022 edition of Fellows’ Hangout in Lagos organised by the Chartered Insurance Institute of Nigeria (CIIN) have been urged to structure their area of specialisation to promote industry awareness.

The Chairman, Examination Committee, CIIN, Olusola Ladipo-Ajayi, who spoke on a paper titled: ‘Contributions of Fellows to the growth of the Institute’ at the CIIN 2022 Fellows’ night, said there is a need for collaboration between the institute’s relevant stakeholders to promote insurance awareness and place the industry on the path of growth.

Ladipo-Ajayi tasked insurance fellows to hold meetings regularly and make recommendations that would assist the institute saddled with the responsibility of promoting insurance awareness.

He implored them to join hands with the institute to audit course books; help to supervise examinations and assist in determining skills and knowledge programmes.

Chairman, of the Society of Fellows, Prof. Joseph Irukwu, who was represented by the past President, Sunny Adeda, decried the number of fellows of the institution, which is 121, compared to India with 3,767 insurance fellows.

Adeda beseeched insurance practitioners and the public to embrace the institute’s examinations, stressing that the insurance industry currently has less than 4,000 professionals.

The President, CIIN, Dr. Muftau Oyegunle, charged the institute to determine a high standard of knowledge and skills for persons seeking to become registered members of the professional body, adding that he has strong confidence that this would help grow the industry.



‘Nigeria lacking structures required to implement AfCFTA’

Blessing Irabor is the current president, Organisation of Women in International Trade (OWIT) Nigeria and Chair for the OWIT Africa Liaison 2022. She is also thePresident/CEO, Blissomo International Ltd, providing services in agriculture, tourism, business development and consulting. In this interview with TOBI AWODIPE, she talks about challenges hindering Nigeria’s export and how the country can improve its non-oil export and international trade.

Nigeria’s trade deficit is widening, going by the latest data from the National Bureau of Statistics (NBS), raising concerns about the country’s capacity to improve its export. What do you suggest as the sustainable plan or action to reverse the deficit?
The wide trade deficit in Nigeria has a huge consequence especially for the foreign exchange (FX) market and employment creation. The country, with enormous unemployment and FX challenges, is by implication ‘outsourcing’ critical segments of the economy that create jobs (secondary production) to other economies. In simple terms, Nigeria has continued to export jobs owing to its inability to domesticate heavy factor industries. To address this, Nigeria has to take into priority the measures to address infrastructural challenges, regulatory constraints, security concerns, restricted access to foreign exchange and other related problems that have discouraged exportation of goods from Nigeria.

What would you say are the major challenges hindering Nigeria’s export today?
So many but I’ll say insecurity as a threat to the economy; production of goods below approved international standards; substandard packaging of goods; inadequate infrastructure – transportation and logistics; warehouses and storage facilities which increase loss and damage; overcrowded ports; ill-conceived government policies that stifle businesses and reduce investor confidence. Others are poor/zero access to finance; a lack of understanding of foreign markets and regulations and complexities associated with foreign exchange.

Despite several promises and assurances of improving the ease of doing business for SMEs, would you say people in business/trade have benefitted from this in any way?
Some businesses have benefited but there is still a long way to go. The Nigerian business environment is toxic and hampers growth. Radical policies are made without due consideration and consultation. Access to finance is still a challenge for businesses. The cumbersome processes at agencies such as NAFDAC, SON and even the multiplicity of agencies have not helped either. Women are still struggling to enter certain markets. The assurances on improving the ease of doing business must be met with a harmonious implementation of policies across the federal and state levels of government.

Globally, inflation remains a challenge for many countries. For Nigeria, how much would you say this is affecting the local and international trade potentials?
The effect of inflation on international trade may be described quite simply. When prices and costs in any country rise rapidly, goods produced in the country soon become more expensive than similar goods produced abroad. Nigeria is no exception as the depreciating value of our currency has reduced the purchasing power of both local and international traders. This has further led to scarcity of resources to produce goods and an increase in the price of existing goods in store.

AfCFTA was greeted with so much fanfare when it was signed two years ago. Nigeria is yet to implement the agreement despite signing it. What are the implications for people in regional/international trade?
Though Nigeria has signed and ratified the AfCFTA agreement, the structures required for the implementation of the agreement are still lacking. This apparent deficit in infrastructure seeks to undermine this agreement. Nigeria’s security challenge has posed a major threat to this agreement, especially in the light of constant farmers-herders clashes and terrorist activities of Boko Haram. Nigeria’s population of about 200 million people provides a huge market in the wake of regional and continental trade. However, this population may become primarily consumers with a minimal export capacity if the infrastructure deficit is not addressed to increase production and export of goods. Our laws and practice in Nigeria are also not abreast with the dimensions of trade in services and the required infrastructure to make us competitive in services.

Oil and petroleum products still remain Nigeria’s biggest export despite promises from several governments to diversify and improve non-oil exports, how best can we improve the latter going forward?
According to The Guardian (of March 2022), between 2018-2021, crude and oil products accounted for an average of 89.4 per cent of the total goods exported, leaving industries and agriculture where the bulk of the jobs are created with about 10 percent. Despite the renewed campaign for non-oil exports, oil still controlled 88.7 per cent of the export basket last year. This shows that a lot more still needs to be done in diversifying Nigeria’s resources and promoting non-oil exports. Coupled with the suggestions I’ll state later on, the following interventions are equally critical: Concerted efforts by government at all levels and the various regulatory institutions to minimise all bottlenecks and bureaucracy associated with exportation of finished goods by Nigerian firms especially SMEs; Access to foreign currency would enable exporters manage challenges associated with currency fluctuations; Critically examining production challenges in priority sectors such as agriculture and addressing them more specifically and finally, taking on the situation caused by the global pandemic on Nigerian export businesses taking advantage of e-commerce would give Nigeria’s non-oil exporters the leeway to access international markets effectively.

As women in international trade, what unique challenges would you say you face?
Access to affordable learning opportunities to garner technical competence in international trade from reputable institutions; access to entry-level, mid-level and C-Suite roles for practitioners of international trade; production and export capacity; market access; lack of formalisation of businesses; legal and institutional constraints as well as structural inequalities in patriarchal societies.

Nigeria would be hosting the international body of this association soon. What major issues would this conference look to address?
The 2022 Africa Women Trade Conference, which will be hosted in Nigeria, proposes to move beyond basic discussions around gender and trade to actual analysis of who participates and benefits from regional and international trade, and the process/extent of participation. In this regard, the conference will draw recommendations from the following questions: What are the current considerations for a gender-responsive trade facilitation agenda? How can gender-specific challenges be addressed within the AfCFTA complementary measures?

What is the gender dimension to investment, standardizations, certifications, competition policies and intellectual property rights? Do all exporters/importers and aspiring exporters/importers have equal opportunities? Are solutions available to address challenges they face within the context of trade in services/trade in goods? Is the export/import participation rate the same for both male and female gender? In what sectors are the genders prominent? What are the most efficient methods to support women on issues such as discrimination, capacity building and networking and how is gender-mainstreaming strategies enabled by government entities responsible for implementing trade facilitation measures?

The conference’s methodologies will include but not limited to: High-level meetings, 2-day discussion platforms that will involve short issues papers or powerpoint presentations prepared and presented as background for panel discussion as well as story-telling about successful women entrepreneurs. The meeting days will employ hybrid methodologies in order to expand the scope of participants. It would also have a 1-day trade show that provides a platform for sharing trade, investment and market information and enabling buyers and sellers, investors and countries to meet, discuss and conclude business deals and an award of excellence night for exemplary service by selected trade and business actors which will be aimed at recognizing special and outstanding services provided for national/regional and/or international significance.

What can the Nigerian government do to improve international trade to boost the nation’s GDP?
Nigeria has been a member of the WTO since January 1, 1995; having been a member of the General Agreement on Tariffs and Trade (GATT) since November 18, 1960.

Nigeria ratified the WTO Trade Facilitation Agreement on January 20, 2017 and the amended WTO Agreement on Trade-Related Aspects of Intellectual Property Rights 1994 (TRIPS) Agreement on January 16, 2017. Since then, Nigeria has entered into several other international, bilateral and regional agreements including the AfCFTA. However, in order to position the country to benefit maximally, the following must be considered and implemented: ease in the regulatory processes relating to exporting goods; promotion of social and economic policies that will be instrumental to promoting women and youth in trade, more specifically, improving their entrepreneurial capacity and employment opportunities; infrastructural development of road and rail networks as well as export facilities to enable transportation of quality products from and to Nigeria as well as optimization of border administration processes via technology. Other steps are improving security and general business environment; rationalization of import duties and restrictions to avoid the possibility of arbitrary product reclassification and to align with global cost-per-shipment levels; promoting transparency and accountability by avoiding duplicate procedures that often take time and lead to delay and publishing all timelines and clear cut processes for imports and exports on its website; coordinate and streamline procedures inside regulating bodies to expedite licensing requirements, inspections and tax exemptions; support subnational governments on its local agenda to promote trade development within its environment and the last but not the least, establish regulation to support more efficient and less-expensive logistics services like rail services and facilitating new investment in our ports.

What CBN’s interest rate hike means for Nigerians, the economy

The Central Bank of Nigeria’s Monetary Policy Committee on Tuesday raised the benchmark interest to 13 per cent. The governor of the Central Bank, Godwin Emefiele, said the action was to tame the rising inflation rate in the country.

Inflation in Africa’s most populous country soared to 16.8 percent in April, according to a report by the National Bureau of Statistics (NBS). The soaring rate was driven by fuel price increases and accelerating costs for food, including bread and cereals.

The CBN on Tuesday said that the global economic outlook remains uncertain amid rising commodity prices worsened by the Russia-Ukraine war.

Earlier in the month, a 0.5 percentage points interest rate hike announced by the United States’ Federal Reserve had reverberated around the globe, spurring other economies to hike rates.

The U.S. Fed raised its benchmark interest rate to a target rate range of between 0.75% and 1%, the largest hike in 22 years. The decision followed a 0.25 percentage point increase in March, the first increase since December 2018.

Like the US, other big economies of the world have raised their rates.

Monetary Tool

The interest rate is one of the key tools deployed by central banks across the world to manage the flow of money and productivity in their respective countries. A change in the interest rate could have an effect on macroeconomics and other key economic indicators like consumer spending and borrowing.

In Nigeria, the tool allows the apex bank to effect changes in broad monetary policies designed to facilitate the government’s planned fiscal policy.

Mr Emefiele explained on Tuesday that at the MPC meeting, six out of the 11 members of the committee voted to raise the key rate.

The committee also voted to retain the asymmetric corridor at +100 and -700 basis points around the MPR, just as it maintained the Cash Reserve Ratio (CRR) at 27 per cent.

The CBN governor argued that the sharp rise in inflation across both the advanced and emerging market economies has generated growing concerns among central banks across the world, adding that the progressive rise in inflation driven by rising aggregate demands and wage growth has put sustainable pressure on price levels.

Inflationary Pressure

The major determinant of the CBN’s hike in rate on Tuesday was the need to tame rising inflation. Until Tuesday, Nigeria hadn’t altered its interest rate since September 2020 when the CBN reduced the monetary policy rate from 12.5 per cent to 11.5 per cent.

In the midst of the global hike, the nation faces a dicey situation amid efforts to contain inflation, keep domestic prices stable, and ensure economic growth.

Mr Emefiele addressed this concern on Tuesday, thus: “On the need to tighten, MPC feels compelled that tightening would help moderate inflationary trade-off from the steady growth so far recorded and improve real GDP.

“It also feels that tightening would help rein inflation before it assumes the galloping frame considering the rising increase in headline inflation month-on-month.”

By hiking the interest rate to 13%, it is expected that borrowing would become more difficult and consumers would have less money to spend. By implication, amid lower demand among consumers, manufacturers of goods would be wary of raising prices. In effect, all of these would combine to reduce inflationary pressure.

But the hike could also fail to tame inflation if other macroeconomic indicators go wrong.

Manufacturers’ nightmare

A hike in interest rate is often considered manufacturers’ nightmare as it stifles productivity and expansion.

As the apex bank raises its rates to 13%, manufacturers hoping to borrow from banks may have been shut out of the windows due to the higher cost of borrowing amid falling demands.

When the benchmark rate was pegged at 11.5 per cent, banks typically charged manufacturers and other lenders between 12 to 30 per cent on loans. With the hike in rate (13%), the charges could skyrocket.

Earlier in the year, the Manufacturers Association of Nigeria had said the average rate at which its members borrowed money from banks was 20.75 per cent and 21.25 per cent in 2020 and 2019, respectively.

“It is important for the CBN to carry out a coordinated reduction in the monetary policy rate and lending rate,” MAN said in a statement.

Employment and Productivity

A hike in interest rate slows down productivity, as manufacturers struggle to keep machinery in operations and pay salaries. Those who look forward to borrowing for expansion and production would have to shelve such ideas in the face of the high cost of accessing funds. Persistent low interest rates favor larger companies because it allows them to increase production, employ more people, and expand. When the interest rate is hiked, the reverse is the effect.

In terms of job creation, a hike in interest rate could have effect—if marginal—on the number of jobs created or lost.

Unemployment Rate in Nigeria averaged 13.55 percent from 2006 until 2020, climbing to an all-time high of 33.30 percent in the fourth quarter of 2020. Even if the impact may not be significant in the immediate, the hike in interest rate and attendant fall in productivity could throw a number of people out of jobs.

Stocks, Bonds, and Forex

By default, low interest rates can cause the stock market to go up, just as the market records depreciation when the apex bank raises interest rates.

By implication, change in central banks interest rates affect prices of various assets such as bonds, stocks and houses.

The exchange rate can also be affected by the increase in rates, because a hike in a nation’s interest rate relative to other countries makes the domestic currency denominated assets more attractive to foreign and domestic investors. This can lead to a rise in demand for the domestic country’s currency in relation to other foreign currencies.

Meanwhile, as domestic currency strengthens, imported goods would become cheaper while locally produced products would become more expensive in the foreign market. This could as well affect demand, and lead to reduction in foreign exchange earnings with possible impact on balance of payments.

In the case of Tuesday’s increase in Nigeria’s interest rates, it remains uncertain how much this would affect the nation’s foreign exchange in the light of the widespread hike in rates across different economies around the globe.

As of press time Wednesday, numerous central banks across the world have hiked their rates in the wake of the United States’ hike in rate earlier in the month. Like the US’ apex bank, the Bank of England increased interest rates from 0.75% to 1% in order to tackle soaring inflation that is expected to rise above 10% in the coming months. The bank also warned that the cost-of living crisis could plunge the economy into recession in 2022.

Similarly, Australia’s central bank as well as the Reserve Bank of India (RBI) raised their rates to accommodate the changing dynamics.


Source: Premium Times

Why is it Essential to Have a Good Credit Score?

What is a Good Credit Score? 

A credit score is a three-digit number known as a CIBIL score that is given to you as a representation of your creditworthiness. Credit bureaus associate this score with your profile based on your financial wellbeing. If you have a history of making all your credit payments on time, clearing your card debt balance, and taking justified loans, then your statement will reflect a good credit score. Any credit score which has credit utilization below 30% is considered a good score.

Benefits of Your Good Credit Score:

  1. You’ll get the best rates on car loans, home loans, and other personal loans: Lenders who wish to offer a loan to clients first check their credit scores to determine their creditworthiness. If you have a good score, you will be able to close a good deal with lower interest rates and premiums from the vendor.
  2. Secure higher credit limits on credit cards: If you have a good credit score, you will be approached by more and more premium lending institutions with higher spending limits. A good credit score automatically reflects well on your creditworthiness and you can take advantage of that in the form of higher credit limits on your cards.
  3. Access to the best-rewarding credit cards: Several credit cards offer various benefits to privileged customers in the form of discounts on different online shopping platforms, cash back, complimentary movie tickets, discounts at luxury dining restaurants and hotels, travel miles, and much more. A good credit score will help you unlock such cards at lower rates.
  4. Eligible for a pre-approved loan offer: High creditworthiness will up your chances of being offered pre-approved loans from banks and financial institutions. A good CIBIL score goes a long way in ensuring that you get reasonable interest rates on these pre-approved loans too.

What Factors Impact Your Credit Score? 

  1. Timely bill payments: Pay your bills on time to ensure that your CIBIL score is not impacted negatively.
  2. Pay off your debts:Debt accumulation can result in a weak credit score. You can also consider debt consolidation by using a personal line of credit, which offers seamless debt management and lower credit rates.
  3. Manage how often you apply for credit: Applying for credit too often results in ‘hard inquiries’ on your credit score, which further weakens your score. So be judicious in choosing when to apply for credit, and span out your applications.
  4. Manage your credit card usage: Using the credit card within limits and ensuring timely payment of the bills will positively impact your credit score.
  5. Check your CIBIL score and report regularly: It’s good to keep a tab on your credit report and periodically check your credit score to help identify any inaccurate or incorrect information and rectify it.

Securing a good credit score requires perseverance, diligence, and prudency. Be realistic with your financial spending capacity before using various means of credit; be sure that make your bill payments on time. With a high credit score, there are several more benefits that you shall reap. You may be able to secure an interest-free loan, better credit rates; you will even be able to save on rentals and mortgages. You will be able to negotiate the best deals and interest rates. So make sure that you consistently work towards achieving a good credit score.


Source: ProShareNg

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