How do I increase my credit score without borrowing more?

Your credit score plays a key role in determining your financial credibility in Nigeria, especially with the rise of digital lenders and the growing influence of credit bureaus.

People always think that the best way to increase their credit score is by borrowing more, but that's not the case. Your credit score can be better without incurring more debt. Here's how:

Pay current loans and bills on time.
Your payment history is an important component of your credit score. Whether it’s a microloan, a bill, or a Buy Now Pay Later (BNPL) service, even if you are not taking new loans, pay your dues on time.

Tips:

• Set reminders or enable automatic debits to pay on time.
• Keep payment proof receipts in case of reporting errors.

Dispute errors on your credit report
Sometimes, credit reports contain oversights that can lower your score. These may include inaccurately reported defaults, missing records of payments you've made, or accounts that don't belong to you.

What to do:

• Request your free credit report from Nigerian credit bureaus.
• Carefully read it.
• Make corrections by contacting the bureau or financial institution involved.

Maintain low credit utilization.
If you have an overdraft facility or credit card, keep your spending under 30% of the credit limit.

Leave your old accounts open.
The longer you've had a credit history, the better for your score. If you've had old accounts (like a store credit or a mobile loan site), don't close them unless you don't use them often.
Closing old accounts will shorten your credit history and reduce your score.

Don't take multiple loans over a short period.
Each time you apply for a loan, it triggers a "hard inquiry" on your credit report, which can temporarily lower your score. Even if you're not planning to take on new debt, avoid applying for credit too often just to test your eligibility.

Do not take on new loans for the sake of variety. Ensure that you pay off what you already owe.

Always check your credit score.
You can check your credit score on the Scorewise app. Download Scorewise on the App Store or Play Store.