Do You Know Your Credit Rating?
Do your friends and family members know their credit ratings?
Credit rating knowledge and understanding is getting streamlined in Kenya thanks to Patascore, which is a unified source of truth for your credit score.
Patascore focuses on bringing you a holistic credit score and not having to keep records of all your credit scores from different CRBs and lenders without a clear understanding of what each of them mean.
Patascore is bringing safety, data ownership and credit financial education in a one stop shop for both individuals and financial institutions, in the end creating meaningful financial inclusion that drives responsible borrowing and wealth creation.
In the current lending space, Kenyans have an inkling about credit ratings in regard to the dreaded CRB that makes people shake in their boots. Traditional CRBs are viewed as negative report forms where loan defaulters are reported and punished with a five year listing sentence. The CBK has made efforts to make traditional CRBs unified platforms that contain both positive and negative information about an individual’s credit habits. However, the reality is far from being achieved due to inconsistent reporting from banks and Micro Finance Institutions that often work in silos, meaning the current status of CRB data remains outdated and unreliable.
Well, Patascore is here to change the face of credit rating and reporting by offering a unified platform with updated data that gives an in-depth and accurate rating of an individual’s financial habits.
What is a credit rating?
A credit rating is a number that shows an individual’s ability and willingness to repay a loan. A credit rating contains information about an individual’s financial habits and credit history, which lenders use to make informed decisions before offering credit facilities to individuals.
Patascore is providing credit ratings to everyone, including individuals with no bank accounts and credit history. We make this reality possible by using thousands of conventional and unconventional data sets (such as complete mobile money data, financial education data, supply chain data, farmer input data, CRB data, IPRS data among others) to give an individual a holistic analysis of their finances and tips on how to improve their credit scores through our inductive and data driven financial education.
Patascore Credit rating grading
Patascore provides an individual with a numerical unified credit rating accompanied by a risk description. The credit rating grading starts from 0 to 900 with ranges in an ascending format where 0–149 is a poor credit score while 750–900 is excellent. Each range has its own alphabetical rating, which range from AA to EE whereby 0–149 is EE while 750–900 is AA.
An individual with AA and BB (meaning low risk) credit rating has a well performing financial history in terms of
- Good spending habits — spending money wisely on needs more than wants, such as paying utility bills
- High savings — having a saving culture that entails regularly putting money away for funding short-term goals, long-term goals, and emergencies.
- Low non performing loans i.e. repaid past loans on time — having a history of repaying loans on schedule and no loan defaults
- Low gambling behaviour — low participation in gambling, betting, and lottery activities
- Low debt weight — debt weight refers to the amount of cash inflow that is affected by debt. Low debt weight means a small part of your cash inflow is affected by the debt that you need to pay
- High cash inflows — having large amounts of money coming into your mobile money or bank account
This individual also receives visibility on the amount of money that they can afford to receive from lenders. Such an individual will attract and have choice from a large pool of potential lenders who will offer high loan limits at affordable interest rates due to the trust they have in the individual’s ability and willingness to repay the loan.
An individual with CC, DD and EE (meaning medium to very high risk ) credit rating has a low and non-performing financial history in terms of:
- Poor spending habits — spending money poorly on wants more than needs such as entertainment and leisure activities
- Low savings — having a poor saving culture where your credit rating shows that you do not put money away regularly for funding emergencies and financial goals
- High non performing loans: did not repay their loans on time — having a history of repaying loans late and/or defaulting on loan payments
- High debt weight — this means that a large percentage of your cash inflow is used to repay debt(s)
- Low cash inflows — minimal receipt of money into your account
Lenders may be willing to lend to CC, DD and EE individuals but often with rates that are a bit higher compared to AA and BB rating. As such, these individuals may fail to qualify for a loan from lenders or may receive a low loan limit with high interest rates due to their poor credit rating.
Patascore transforms your negative credit score to a positive one
If your credit score is CC, DD and EE, it’s not the end of the world. Patascore will help you get it to a positive state of AA and BB through our financial education program by Patascore Academy. Having an AA and BB credit rating increases an individual’s credit access and choice from a wider base of lenders offering affordable financial options on the Patascore marketplace thus climbing up the financial ladder faster.
Our financial education program focuses on instilling financial literacy in individuals through the following topics that will help individuals to better understand their credit rating and how to improve it over time:
- Budgeting your money
- Maximising your income
- Responsible borrowing and effective debt management
- Understanding your credit score and knowing how to improve it in order to climb the financial ladder
- Savings and investments
Improve your credit score to a positive status TODAY from Patascore by downloading the app here https://play.google.com/store/apps/details?id=com.patascore.app