Credit Scores
A Credit Score is a three-digit number that reflects your creditworthiness. It helps lenders, like banks and financial institutions, assess how likely you are to repay a loan on time. In Tanzania, credit scores are generated based on your financial history, including how well you manage debts, pay bills, and handle other financial obligations.
Why is Your Credit Score Important?
Your credit score plays a critical role in determining:
- Loan Approval: A higher score increases the chances of getting loans or credit facilities.
- Interest Rates: Those with higher scores often enjoy lower interest rates on loans.
- Access to Credit: A good score opens up access to more financial opportunities.
How is Your Credit Score Calculated?
The score is determined by your:
- Payment History: Timely payments on credit accounts boost your score.
- Debt Levels: Lower outstanding debts generally improve your score.
- Length of Credit History: A longer credit history is often viewed favorably.
- New Credit Inquiries: Frequent new applications can negatively affect your score.