Nigerians moving to countries like the UK, US, and Canada often start with no credit history, making it challenging to access loans, credit cards, and even certain jobs. Experts say building a solid credit score from the start is critical for long-term financial stability.

According to financial experts, a credit score is a numerical rating that reflects a person’s ability to borrow and repay money. In the UK, credit bureaus like Experian, Equifax, and TransUnion track how individuals manage debt and make payments. In the US, the same companies monitor credit activity, while the FICO score, ranging from 300 to 850, is the most commonly used metric. A score above 700 is generally considered good.

Payment history is the most important factor in credit scores, accounting for about 35% of the FICO score. Credit utilization, or the percentage of available credit used, makes up another 30%. Maintaining a low balance on credit cards, timely bill payments, and a long credit history also contribute significantly to a strong score.

For newcomers to the UK, registering with the local council can help verify identity and residence, strengthening their credit profile. Opening a bank account and maintaining a relationship with financial institutions is also essential. Mobile providers like O2 in the UK may report timely payments to credit agencies, contributing to a person’s credit history.

Secured credit cards, which require a cash deposit, can be a good starting point for those with no credit history. Using them responsibly—by paying the full balance each month—can lead to eligibility for regular credit cards in six to twelve months.

Applying for credit too frequently can lower a credit score. Each application triggers a hard inquiry, which can temporarily reduce the score. It is advisable to space out applications and check eligibility before applying.

In the US, applicants typically need a Social Security Number or an Individual Taxpayer Identification Number (ITIN) to build credit. Having a family member or spouse add them to a credit card account can also help build a credit history, provided the credit card company reports the activity.

Immigrants are encouraged to check their credit reports at least every six months for errors or unauthorized activity. Disputing inaccuracies with the relevant credit bureau can prevent long-term damage to their credit profile.

A strong credit score can significantly reduce the interest rates on mortgages, car loans, and other financial products. For example, a good credit score can lead to a 4.5% interest rate on a $300,000 mortgage, while a lower score may result in a 6.5% rate.

Some landlords and employers, especially in the finance sector, may also check credit scores before approving tenants or offering jobs. Maintaining a good credit history is therefore crucial for both financial and employment opportunities abroad.