Your complete guide to understanding credit scores in Kenya - how they work, what they mean, and why they're crucial for your financial future.
A credit score is a three-digit number (ranging from 200 to 900 in Kenya) that represents your creditworthiness - essentially, how likely you are to repay borrowed money on time.
Think of it as your financial report card. Just like grades in school show how well you're doing academically, your credit score shows how well you manage borrowed money.
Key Point:
Banks, lenders, and even some employers in Kenya use your credit score to decide whether to approve your loan application, what interest rate to charge you, or whether to hire you for financial positions.
Kenya has three licensed Credit Reference Bureaus:
These bureaus collect information about your borrowing and repayment behavior from banks, microfinance institutions, mobile money lenders (M-Shwari, KCB M-Pesa, Tala, Branch), SACCOs, and utility companies.
The CRBs use complex algorithms to analyze your credit behavior:
Based on this analysis, you're assigned a score between 200-900:
Most important factor. Do you pay on time? Even one missed payment can drop your score by 50-100 points. This includes bank loans, mobile money loans (M-Shwari, Tala), credit cards, and even utility bills that are reported to CRB.
How much of your available credit you're using. If your credit card limit is KES 100,000 and you're using KES 80,000, that's 80% utilization - very bad! Keep it below 30% for a good score.
How long you've been using credit. A 5-year-old credit card with good payment history is much more valuable than a new one. Don't close old accounts even if you're not using them much.
Having different types of credit (personal loan + credit card + M-Pesa loan) shows you can responsibly manage various credit products. But don't take out loans just to diversify - only borrow what you need.
Too many recent credit applications signal financial desperation. Each application creates a "hard inquiry" that stays on your report for 2 years. Space out applications by at least 6 months between each one.
Banks check your score first. A score below 600 means instant rejection at most banks. Above 700? Instant approval.
A 700+ score can get you 13% interest. A 600 score? 18% interest. That's a difference of KES 250,000 on a KES 5M loan over 5 years!
Want to buy a home? Mortgage lenders require minimum 650 score. Below that? You'll need a larger down payment or co-signer.
Banks, financial institutions, and government positions check CRB. A negative report can disqualify you from the job.
Premium credit cards with rewards, cashback, and travel benefits require excellent scores (700+). Poor scores get basic cards with low limits.
Asset finance for vehicles requires good credit. Poor scores mean higher down payments (30-40% vs 10-20%) and shorter repayment terms.
Truth: Checking your own score is a "soft inquiry" and doesn't affect it. Only when lenders check (hard inquiry) does it impact your score.
Truth: You don't need to pay interest to build credit. Pay off your full balance every month - this shows responsible use without costing you money.
Truth: Closing old accounts shortens your credit history and can hurt your score. Keep them open even if you don't use them much.
Truth: Your salary doesn't directly affect your score. A millionaire who doesn't pay debts will have a poor score. A teacher who pays everything on time will have an excellent score.
Now that you understand what a credit score is, take the next steps to improve yours.