How to borrow money in Nigeria without ruining your credit profile

In today's economy, borrowing money can be a lifeline to cover surprise expenses, fund a business, or invest in education. But, sometimes borrowers are caught in money traps that destroy their credit history and limit future loan access. With digital lending platforms and credit bureaus becoming increasingly mainstream, maintaining a good credit history is more crucial than ever.

The following steps highlight how to borrow cash in Nigeria without ruining your credit profile.

1. Understand How Credit Profiles Work in Nigeria
The credit reporting network in Nigeria continues to grow, and large bureaus make individual and company credit history reports available to them. Every loan you take out, pay off (or skip), and even some bill payments may be reported.
Your credit score is usually somewhere between 300 and 850, and it is influenced by:

• On-time payment history
• Loan usage
• Number of open credit accounts
• Credit checks
• Delinquencies or missed payments
  A bad credit score restricts your ability to borrow, and a good one provides more favourable loan terms and availability.

2. Borrow Only What You Can Pay Back
This may go without saying, but overspending is a leading credit wrecker. Don't borrow to fund lifestyle wants or requirements. Before applying for a loan, calculate:

• Your typical monthly income
• Debt obligations as they stand
• How much can you safely repay without disturbing your budget?
• Utilize this to guide how large a loan to borrow.

3. Choose Genuine Lenders
There has been a proliferation of loan apps and web lenders in Nigeria; some are genuine, while others target unsuspecting victims. Stick with:

• CBN-licensed microfinance banks and online lenders
• Trustworthy websites like Oja BNPL, Renmoney, and Aella Credit
• Banks offering personal or SME loans

Avoid lenders who require advance fees or resort to harassment or public shaming, which is illegal and damaging.

4. Know the Terms Before You Sign
Many borrowers ruin their credit reputation because they misread the loan agreement. Before you take any loan:

• Read the interest rate and APR.
• Check the repayment schedule and late payment charge.
• Know your rights and obligations.
• If in doubt, ask or leave.

5. Pay on Time
Your payment history contributes to the biggest percentage in your credit report. Always:

• Take a reminder or set up automatic payments.
• Pay the minimum amount due, on or before the pay date.
• Let the lender know ahead of time if you cannot fulfill an obligation, they can refinance the loan or grant a time extension.

Early payment preserves your credit and may increase your loan limit over the long term.

6. Avoid Taking Multiple Loans at the Same Time
Each loan request may trigger a credit inquiry. Multiple inquiries within a short period harm your credit score and make you look desperate for money. Take your applications seriously and do not "hop" from app to app for loans.

7. Build a Credit Record with Small Loans
If you are new to credit, start with small, short-term loans. Pay promptly and establish a good credit record. Over time, this improves your creditworthiness and eligibility for borrowing from better creditors.

8. Monitor Your Credit Profile
Get your report as frequently as possible. Look for errors, unauthorized loans, or discrepancies and contest them immediately. Borrowing itself is not always bad; it's a question of how you go about it.
Bonus tip:You can check your credit score by yourself on the Scorewise app, available on the App Store or the Play Store.