CEO, CR Services, Mr. Taiwo Ayedun
By Obinna Chima
The CR Services (Credit Bureau) Plc has announced the introduction of Nigeria’s first credit bureau score named - CreditRegistry SMARTScore.
A statement from the firm at the weekend said the statistically-based credit score was developed exclusively for Nigeria as a result of several years of evaluation, development and commitment to improve data quality.
The use of statistical methods, it explained, would help in managing multiple decisions commonly known as scoring.
Chief Executive Officer, CR Services, Mr. Taiwo Ayedun, said that with the introduction of credit scores to the financial industry, banks could now integrate the instrument into their risk architecture either 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,” he added.
According to Ayedun, scoring in the system is based on the use of mathematical models to predict the odds of future results.
Credit scores are used to help predict the credit behavior of customers and determine the creditworthiness or probability of not defaulting, he stated.
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.
Ayedun said further: “Credit scores are determined by a variety of characteristics such as payment history, outstanding debt, type of credit exposure, new credit enquiries, number of delinquencies, etc. Scoring systems are designed on a simple premise that past behavior predicts future behavior.
“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.”