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Helapesa Survival Guide: How to raise your CRB status in 6 Months

What is CRB?

In Kenya, CRB stands for Credit Reference Bureau. It is an organization that maintains a database of credit information on individuals and businesses. The information includes credit history, loan repayment history, and other details that may be relevant to a lender when assessing a loan application.

CRBs in Kenya are regulated by the Central Bank of Kenya, and their main role is to provide credit information to financial institutions, mobile lenders, and other credit providers to help them make informed lending decisions.

When you apply for a loan, the lender will likely check your credit score and credit history with one or more of the CRBs in Kenya. A good credit score and credit history can help you qualify for a loan with more favourable terms, such as a lower interest rate. Conversely, a poor credit score and credit history can make it more difficult to qualify for a loan or may result in a higher interest rate.

It is important to maintain good credit standing by paying debts on time and monitoring your credit report regularly to ensure accuracy and fix any errors.

How does one end up in the CRB?

An individual or business may end up in the Credit Reference Bureau (CRB) in Kenya if they have outstanding debts or have failed to make loan or credit repayments on time. When a lender reports a delinquent account to a CRB, the CRB will include information about the account in its database. This information may include the debt amount, the lender’s name, and the date the account became delinquent.

Additionally, an individual or business may end up in the CRB if they have a history of applying for credit or loans and being denied. This information is also included in the CRB’s database and may be used by lenders to assess the risk of lending to the individual or business.

It’s also important to note that in Kenya, CRBs also collect data from various other sources such as utility companies, landlords, and mobile network operators.

It’s important to check with the CRBs for your credit report regularly, to ensure that it’s accurate and fix any errors. A good credit score and credit history can help you qualify for a loan with more favourable terms, such as a lower interest rate. Conversely, a poor credit score and credit history can make it more challenging to qualify for a loan or may result in a higher interest rate.

How does CRB Status affect one’s credit rating?

A Credit Reference Bureau (CRB) status can have a significant impact on an individual’s or business’s credit rating. A CRB maintains a database of credit information on individuals and businesses, including credit history, loan repayment history, and other details that may be relevant to a lender when assessing a loan application.

When a lender checks an individual’s or business’s credit score and credit history with a CRB, they use the information in the CRB’s database to assess the risk of lending to the individual or business. If the credit report shows a history of late payments, defaults, or high outstanding debts, it can be an indication of a high-risk borrower, and the lender may be less likely to approve a loan or may offer a loan with less favorable terms, such as a higher interest rate.

On the other hand, if the credit report shows a history of timely payments and a low level of outstanding debt, it can be an indication of a low-risk borrower, and the lender may be more likely to approve a loan or may offer a loan with more favorable terms, such as a lower interest rate.

How does one get out of the CRB?

There are several ways to get out of the Credit Reference Bureau (CRB) in Kenya:

  1. Pay off outstanding debts: The most straightforward way to get out of the CRB is to pay off any outstanding debts. Once a debt is paid in full, the lender will typically report the account as settled to the CRB, and the information will be removed from the CRB’s database.
  2. Negotiate with the lender: If you are unable to pay off the debt in full, you may be able to negotiate a payment plan with the lender. Once the payment plan is in place, the lender may be willing to report the account as being in good standing to the CRB.
  3. Dispute errors: If you believe there is an error in your credit report, you can contact the CRB and dispute the information. The CRB will investigate the dispute and may remove the incorrect information from your credit report if it is found to be inaccurate.
  4. Wait it out: Some negative information will fall off your credit report after a certain period of time. In Kenya, it’s 7 years.
  5. Seek legal advice: If you believe your rights have been violated, you may seek legal advice and take legal action.

It’s important to note that, while it’s possible to improve your credit score and credit history, it takes time and effort to do so. It’s also important to maintain good credit standing by paying debts on time and monitoring your credit report regularly to ensure accuracy and fix any errors.

Can you prevent being put in the CRB when in Debt?

It is not always possible to prevent being put in the Credit Reference Bureau (CRB) when in debt, as lenders have the right to report delinquent accounts to the CRB. However, there are steps that you can take to minimize the chances of ending up in the CRB:

  1. Communicate with your lender: If you are having difficulty making payments, contact your lender as soon as possible. They may be willing to work with you to come up with a payment plan or other arrangements to help you get back on track.
  2. Prioritize payments: If you have multiple debts, prioritize paying the ones that are most likely to be reported to the CRB first. This includes loans and credit cards, as well as utility bills and other debts that may be reported to the CRB.
  3. Avoid taking on more debt: Taking on more debt when you are already struggling to make payments can make your situation worse. Be cautious about applying for new loans or credit cards until your financial situation improves.
  4. Seek financial advice: If you are having difficulty managing your debt, consider seeking the advice of a financial counselor or other professional. They can help you come up with a plan to get out of debt and may be able to negotiate with your creditors on your behalf.

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