Why Is My Credit Score Low Even When I Don’t Owe Anybody?

Many Nigerians are surprised to find out that their credit score is bad even though they owe no money presently. If you have never taken a loan or have cleared all your loans, you might expect your credit score to be perfect. The reality, however, is that owing nothing does not always mean one has a good credit score.

Here are some key reasons why your credit score may remain low—even if you're not currently in debt:

Zero or Limited Credit History
If you’ve never borrowed money or used a credit product, credit bureaus have no data to assess your financial behavior. This is known as having a “thin” or “invisible” credit file. Your score may be low, not because of negative activity, but due to a lack of credit history.
Solution:
Start building credit by borrowing small amounts or using credit products responsibly.

Inactive Credit Profile
If you used to borrow funds but haven't borrowed any recently, your credit file may be marked as inactive. Credit scores are all about recent conduct, so even when you previously had good borrowing habits many years ago, no new information can bring your score down.
Solution:
Use a low-risk loan or credit-building product and repay consistently to reactivate your profile.

Past Negative Records Still Showing
Even if you’ve repaid your debts, negative records such as missed payments, late repayments, or loan defaults may still appear in your credit report. These records can stay on your credit report for months or even years, depending on how serious they are.
Solution:
Ask for your credit report and check the history. If the information is incorrect or outdated, you can dispute it and have it updated or removed.

Mistakes on Your Credit Report
Mistakes do occur. Occasionally, your credit report will list:

• Loans you never applied for
• Payments that are considered late when they were paid on time
• Incorrect balances These mistakes can damage your credit score even if you owe nothing.
  Solution:
  Keep your credit report updated regularly. When you discover an error, alert the credit bureau.

Too Frequent Loan Requests
When you apply for numerous loans within a short period, it may project that you are credit desperate, which may damage your score, yet none of the loans were accepted or used.
Don't take loans from multiple sources at the same time. Take them separately and only borrow when you need them.

Several Past Loan Accounts Not Closed Properly If you borrowed a loan and repaid it but never had proper closure or clearance, the loan may still appear as "active" or "unresolved" in your credit report.
After being paid back in full, always request a loan closure letter or formal notification, and confirm that the lender notifies the credit bureau.

Identity Mix-Ups Review your credit report carefully. If you notice accounts that do not belong to you, report them immediately to the credit bureau and provide them with your correct identification details.

How to Check Your Credit Report in Nigeria You can request your credit report from any licensed credit bureau in Nigeria. Not having a good credit score does not mean you are broke. Sometimes, it's caused by a lack of activity, past accounts, or reporting errors. You can check your credit score and credit report on Scorewise.Download Scorewise on the App Store or Play Store.