CR Services Plc, one of Nigeria’s credit bureau companies, has introduced CreditRegistry SMARTScore, designed to determine customers’ creditworthiness.
A statement by the company on Friday said, for the first time, a statistically-based credit /score had been developed exclusively for Nigeria, saying it was a result of years of evaluation, development and commitment from its subscribers to improve data quality.
According to the company, the use of statistical methods to help manage multiple decisions is commonly known as scoring. Scoring is based on the use of mathematical models to predict the odds of future results.
Credit scores are used to help predict the credit behaviour of customers and determine the creditworthiness or probability of not defaulting. Scoring systems have been around for decades to enable bankers, insurance underwriters, service providers, retailers and many other institutions to make instant approval or rejection decisions.
The statement said credit scores were determined by a variety of characteristics such as payment history, outstanding debt, type of credit exposure, new credit enquiries, number of delinquencies, etc.
He said, “Scoring systems are designed on a simple premise that past behaviour predicts future behaviour. Hence, credit scores are not the only deciding factor in making lending decisions and in fact creditors can decide to override a score based on relevant information not considered by the scoring system.“Overall, in developed economies, credit scores are the norm and creditors use such techniques to instantly evaluate customers for product offerings thus enabling fast easy access to credit to improve standard of living and stimulate economic growth.”
The statement quoted the Chief Executive Officer, Mr. Taiwo Ayedun, as saying, “With the introduction of credit scores to the Nigerian financial industry, banks can now integrate this world-class instrument into their risk architecture whether for monitoring risk, segmenting or evaluating new applicants for credit. With the introduction of SMARTScore, organisations can improve risk management, reduce loan processing time and market their products much more effectively. Overall, SMARTScore enables creditors to identify risk in a standard and concise manner across all loan portfolios.”