Simple Steps on How Nigerians Abroad Can Build Credit Score Faster To Access Loans
- Nigerians moving to the United Kingdom, the United States, or Canada often start without a local credit history
- It is possible to build a credit score to be able to access loans, rent apartments, and meet other needs
- Credit scores are calculated by agencies, with payment history a key to building a good rating
Legit.ng journalist Dave Ibemere has experience in business journalism, with in-depth knowledge of the Nigerian economy, stocks, and general market trends.
When Nigerians move to another country, it is advised that they focus on building a credit score from the start, as it plays a central role in accessing financial opportunities.
Typically, Nigerians arrive in Europe or America with no credit history, making it difficult to access loans, credit cards, car financing, phone contracts and even certain jobs.
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Experts noted that understanding how credit works, which typically takes six to 12 months of consistent responsible behaviour, can be key to having a stress-free life far away from home.
UK, Canada, US, others' credit score explained
Experts describe a credit score as a “financial report card”, a numerical rating that shows how trustworthy a person is when borrowing and repaying money.
Lenders check if people pay their bills and loans on time, how long they have debts and if they have made payments or defaulted.
In the UK, companies such as Experian, Equifax, and TransUnion track how people borrow and repay money. They look at things like credit card debt and loans.
In the US, Equifax, Experian and TransUnion are the credit bureaus that collect information about people's credit.
The FICO score from Fair Isaac Corporation is widely used. It ranges from 300 to 850. A score above 700 is generally considered good. Canada has a system.
Credit scores range from 300 to 900. Equifax Canada and TransUnion Canada manage the scores. In Canada, scores of 800–900 are excellent.
Scores of 720–799 are very good, 650–719 are good, 600–649 are fair and below 600 are poor.
When it comes to credit scores, payment history is usually the most important factor. It accounts for around 35% of the FICO score.
Credit utilisation is next at 30%, then length of credit history at 15%, credit mix at 10% and new credit inquiries at 10%.
Payment history and credit utilisation are key to a credit score.
People need to pay their bills on time and keep credit card debt low. A long credit history also helps.
A good credit mix and less frequent credit inquiries are also important. All these factors help lenders evaluate a person's creditworthiness.
Banks use this information to decide if they can lend to someone. People must manage their credit well. They should monitor their credit reports and scores regularly. This helps them understand their credit situation and make financial decisions.
Why does it matter for credit score?
A strong credit score can help an immigrant get a mortgage, car loan or rental agreement at an interest rate.
For example, on a $300,000 mortgage, someone with a good credit score could get a 4.5% interest rate.
On the other hand, someone with an average or bad credit score might have to pay 6.5%.
Some landlords usually check credit scores before approving tenants. Some employers abroad, especially in finance, may also check credit scores when giving a job.
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Practical steps to build credit faster
1. Register on the electoral roll (UK only)
For Nigerians relocating to the United Kingdom, it is important to register with the local council where they are residing to enable them to vote, as doing so helps verify their identity and residential address.
This strengthens their credit profile and supports financial credibility as newcomers.
2. Open a bank account immediately
Also, opening a bank account serves as a foundation for future credit applications. This establishes a banking relationship early, helps newcomers, and creates a financial footprint with traditional banks.
3. Get a phone contract that reports payments
Mobile network providers such as O2 in Uk offer contract plans that, when paid on time, can contribute to a credit history if reported to credit agencies.
4. Use direct debits for bills
Timely payments of utilities bills, rent, WiFi, and phone contracts improve credit records. Some systems even allow reporting these payments to credit bureaus, further strengthening newcomers’ credit profiles.
5. Start with a secured credit card (US and Canada)
A secured credit card requires a refundable cash deposit, typically between $250 and $1,000, which acts as a guarantee; using it responsibly, such as paying the balance in full each month.
Repayments can make applicants eligible for a regular credit card within six to twelve months.
In the United States, applicants generally need a Social Security Number or an Individual Taxpayer Identification Number (ITIN).
6. Consider a co-signer or authorised user option
Nigerians abroad can build credit by having someone with an established credit history, such as a family member or spouse, add them to their credit card account, provided the credit card company reports the new user’s activity, ensuring it contributes to their credit history.
7. Keep credit utilisation below 30%
It is also recommended not to use more than 30% of your credit limit; for example, on a credit card with a £1,000 or $1,000 limit, you should keep your balance below £300 or $300 to maintain healthy credit usage.
8. Avoid excessive hard inquiries
Applying for credit too frequently can lower your credit score because each application triggers a hard inquiry on your credit report, which temporarily reduces your score; it is advisable to space applications, ideally waiting at least six months, and to check eligibility before applying to avoid unnecessary credit checks that could harm your credit profile.
9. Do not close old accounts unnecessarily
Length of credit history matters. Closing long-standing accounts can shorten average credit age and negatively impact scores.
10. Monitor credit reports regularly
Immigrants are encouraged to check their credit reports at least every six months for errors or unauthorised activities. Disputing inaccuracies with the relevant bureau can prevent long-term damage.
In conclusion, paying bills on time, avoiding excessive borrowing and maintaining low balances remain the most effective strategies.
Canada 2026 immigration pathway opens
Legit.ng earlier reported that the Immigration, Refugees and Citizenship Canada has announced categories under its Express Entry system.
This is to attract international workers from Nigeria and other countries. The Express Entry system is Canada's way of managing permanent migration.
It includes programs, like the Federal Skilled Worker Program and the Federal Skilled Trades Program.
Proofreading by James Ojo, copy editor at Legit.ng.
Source: Legit.ng
