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Why Your Loan Application Was Declined

CredPal — Mon, 13 Sep 2021 19:15:00 +0000

A loan is a type of credit in which a sum of money is lent to another party in exchange for future repayment of the amount borrowed and the accrued interest. Anyone can apply to get a loan but not everyone is entitled to get an approved loan and this may get them to ask why their loan application was denied.

This is not a gender, religion, race, or ethnicity factor. There are some other factors that customers are not aware of because they are not aware of the reasons that can hinder them from getting their application approved.

This article is to expressly identify some factors that might be a blockage or hinder you from getting a loan. And also factors you should consider before you apply for a loan so that you do not get declined.

Applying for a loan takes a process that determines if the financial institution will disburse the loan to you or not. This process is when you are required to provide certain documents like your salary bank statement, work ID, government-issued ID, personal and employment details.

However, providing all these documents and other important information does not guarantee that your loan will be disbursed. Let’s take a look at some factors that can get your loan denied.

5 Reasons why you can be rejected for a loan

These are called predetermined criteria that guide us to know if you’re eligible for a loan or not.

1. Bad credit history

Your credit history is the primary way that lenders check if you have defaulted on paying back a loan in the past. If you have defaulted on repayment, you will be seen as a high-risk customer and you won’t get a credit limit. Providing your employment status or government-issued ID cannot help here, if your credit history is bad, your loan cannot be approved.

That is why it is essential that when you apply for a loan or a credit card and it is time to make a repayment, you make it at the appropriate time. Not only does it incur charges, but it also damages your credit history.

2. High debt-to-income (DTI) ratio

This compares how much you earn at the end of a month and how much of it you use to pay back loans. It is advised that you should not use more than 40% of your income to pay back any form of credit. Once we see that you are using more than 40% of your income, CredPal will not approve any credit limit for you. For example, if your monthly income is 150,000 Naira and you are using 105,000 Naira to pay back loans, which is 70% of your income, CredPal will not approve you of a loan.

3. You did not meet the minimum income requirement

If what you earn at the end of the month cannot pay back the loan you requested, it’s either your loan is not approved or you’re offered a lower amount. If you earn 100,000 Naira a month and you applied for a loan of 1 million Naira, that is likely going to take two years to pay back; the amount you requested will not be approved.

Also, If we’re unable to verify your proof of income or your income is below CredPal’s income requirement, you won’t be offered a credit limit. Another option here is that you might not get declined for the loan but you will be given a lower limit than you requested.

4. Inconsistent employment history

If your income is coming from different sources or you have recently changed jobs (in the last 60 days), or have freelance work from multiple employers, it may create an inconsistency in your income calculations and this could prevent us from offering you a credit limit. This is not to say that you can not be a freelancer or work on contract with different companies or brands, it simply says that you might get declined for a loan if you have an inconsistent employment history as a full-time employee.

5. You did not provide all the required information

As stated above, taking a loan takes a gradual process where you are required to provide some documents and necessary information that will help determine if your loan will be disbursed or not. Failure to provide these documents can get your loan denied. Make sure your documents are complete and accessible so you can use them when you need them.

There could be other reasons or factors as determined by your financial institution. Financial institutions always give reasons for disapproval so that you are not kept in the dark wondering why you were declined even after providing all the necessary information and documents.

In summary, to avoid not getting your loan denied, make sure that you have a good credit score, have a balanced debt to income ratio, make sure your income can pay back your repayment, have a consistent payment history, and provide all the required documents and information.

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CredPal And How They Build the American Express of Africa; SkillFront

CredPal — Fri, 10 Sep 2021 19:24:50 +0000

Our aim to become the American express of Africa is a mission tailored towards improving the quality of life by providing easy access to consumer credit across all payment channels.

Over the past 3 years, CredPal has been able to fill this gap by acquiring thousands of credit card users in Nigeria. We recently got featured on SkillFront, a public-benefit certification body that provides education and certification services.

SkillFront’s Interview with CredPal

SkillFront is a company that helps professionals learn skills that inspire them to find and execute profitable business ideas, grow companies, and become the category king of their markets. They provide objective evidence that a person or an organization needs to operate at the highest level of ethical, professional, and technical standards.

SkillFront recently made a publication about how we are building the American express of Africa which has been our goal since its inception.

Words from our co-founder

In the interview, our co-founder, Fehintolu Olaogun was asked how we innovate and these were his words;

“One thing that is constant in the FinTech space is innovation. There is always one thing to change or improve on. It could be a better way to serve customers, a new product to fill a market gap, you know, there’s just always something. All these are different forms of innovation and we are not left out in this game.

“When it comes to innovation, what we do is listen to the market and customer demands. Our customers send requests for features they’ll love to see. We take that feedback and let it guide what we want to build next. Growth is important to us and there’s no way to achieve that if we do not focus on differentiating ourselves from competitors and keeping our customers happy.”

“When CredPal started, we were offering credit to Nigerians through POS financing but we knew there was more to be done. So, we launched the CredPal credit card in Q4 of 2020, which is a full-fledged card management system. This allows individuals and businesses to get credit cards to pay for emergency bills and make urgent purchases.

“The system gives full autonomy on creating policies on card usage, offering limits based on earning power, and placing restrictions on cards when necessary.”

“And this year, we’re looking to optimize our app through what we call CredPal Pay which we’ll be launching very soon. What I’ll just say about this new feature is that customers have access to funds and also get to shop for anything they want from our merchants and pay for it on their repayment date, all within the CredPal App.”

Read the full publication here.

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10 Common Credit Card Questions

CredPal — Fri, 10 Sep 2021 19:16:19 +0000

Questions regarding credit cards are over a thousand if we have to number them. From people finding answers to what a credit card is to where a credit card can be used amidst others. This is not surprising because many people are new to the concept of credit cards in Nigeria so it is only okay to ask questions for better knowledge. We have answered some of these common credit card questions in our previous blog post and have even made videos to better explain some of them.

In this blog post, we have curated 10 of these common credit card questions to better explain the concept of credit cards to you. If your question is not outlined here, kindly ask in the comment section, we have all the answers

Question 1

What is a credit card?

We won’t get tired of answering this question . A credit card is a small rectangular card like your debit card which allows you to get funds from lending organizations to pay for your purchases while you pay back on your repayment date (the end of your billing cycle). If this explanation isn’t clear enough, then you should watch this 1-minute video of this young lady explaining what a credit card is.

Question 2

What do I need to do to get approved for a credit card?

Getting a credit card takes a seamless process because you do not need to get collateral or a guarantor to get a credit card. We have written a blog post where we have provided you with all the information you need to get approved for a credit card.

Question 3

When am I to make my credit card repayment?

Credit card repayment is one important aspect of credit cards that you should not joke with as it can increase or decrease your credit score and affect your credit reputation. Increase your credit score when you make timely repayment and decrease your credit score when you miss your repayments. Still not clear? Watch this repayment video.

Question 4

What does it mean to be “pre-approved” for a credit card?

Getting a pre-approved credit card means that you have been found eligible to obtain a credit card. However, you still have to apply before you can access the funds on the credit card. For example, if CredPal pre-approves you for a credit card it means that you are a quality candidate for CredPal’s product (credit cards).

Question 5

What is the difference between a credit card and a debit card?

The difference between a credit card and a debit card cannot be seen in its physical form because they are both plastic and rectangular cards. In simpler terms, a credit card is a small plastic card that allows you to borrow funds to make payments at the point of purchase while a debit card is a plastic card that allows you to spend money by drawing funds you have deposited at the bank. Because this is a frequent question that people have asked over and over, we have written a blog post to answer the question properly.

Question 6

How do I avoid credit card fees?

Nobody likes extra fees. Imagine paying back what you have spent with extra charges that you did not plan for when you got your credit card, it can be very painful. There is only one way to avoid this, “Make timely and full repayment every month.” That is the only solution to avoid extra charges, it is not difficult to achieve, if you work towards it, you can achieve it.

Here is why it is important to make timely repayment.

Question 7

When should I redeem rewards on my credit card?

Whenever it is convenient for you. You can use your rewards to clear your balance when you want to make your repayment or use it to shop on CredPal’s marketplace to get discounts. However, some credit cards would require you to use your rewards within a certain period or you lose them.

Question 8

How do I clear my balance?

Different lending organizations have different options for clearing their customer’s balances but the common options are instant debit from your debit card or payment through a bank transfer. For CredPal, we offer an easy balance payment. All you have to do is click on the clear balance option when you log in to your app and we charge the debit card that you added to your CredPal account or you make a bank transfer to CredPal’s account. Here is a video on how you can pay back what you have spent on your credit card.

Question 9

What is the minimum or maximum credit limit that I can get?

Credit limits are set based on the Underwriter’s estimation which ranges from your financial standing to your credit history. This means that there is no clearly stated minimum or maximum limit. You are given a credit limit based on your income and your ability to pay it back.

Question 10

How can I get a credit card in Nigeria?

Getting a credit card in Nigeria is easy but getting a CredPal credit card is easier. All you have to do is download the CredPal app on the Google Play Store or App Store. Click on the create account button and provide us with the necessary information and document while you wait for your account to be approved.

If you have further questions about credit cards, kindly drop them in the comment section so that we can provide answers to them in part 2 of this article.

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Money mistakes you should avoid in Nigeria

CredPal — Wed, 08 Sep 2021 19:13:29 +0000

Financial freedom is about taking ownership of your finances. It is a journey that requires you to take stock of how you manage your funds. When you’re intentional about being free from debt and worrying less about paying for sudden expenses then you can say that you’re financially free.

It’s easy to want a lifestyle that suits your needs but how are you working towards it? It starts by knowing what to commit your funds to and what can wait or you don’t need. Now, financial freedom does not exactly equate to being debt-free but it means that you know what portion of your funds go into paying back little debts like credit cards, mortgage loans, or point-of-sale shopping without you failing on repayment or being broke.

We all know that feeling of panic that sets in when unexpected expenses such as car repair or health problems pop up. The thought is “How am I going to pay for that?” But imagine being able to confidently pay for such expenses without breaking a sweat? That’s where you want to have such a thing as a credit card. This is not to encourage acquiring debt but in a bid to save and invest your way into financial freedom, you could end up not having immediate access to liquid cash for unexpected expenses and a credit card can be the fix you need for such instances.

Credit cards are designed to help us maintain the state of financial freedom. The fact is you can have thousands of credit cards in the world but if you mismanage your income, you will end up running into debt because you are spending without planning so you end up broke all the time and unable to make your repayment. The reason is not that you do not have enough or you have too many needs, you might just be making some money mistakes that you need to fix to stay financially free.

We will highlight these mistakes and how you can fix them.

Mistake 1: No financial Goal

A financial goal is a target to aim at when managing your money. It can involve saving, spending, earning, or investing. We all set goals at certain points in our lives, it could be weekly, monthly, or even yearly. The point is that as you set goals personally and professionally, it’s very important to also set financial goals. This is going to help you manage how you spend and what you spend on.

You can start with monthly financial goals. Once you receive your salary for the month, you could split the money based on priorities of needs while considering that you need to put enough aside to get the ball rolling for your financial goal. For instance, if you earn 250,000 Naira monthly, you can split it using the 50–30–20 rule to make sure that enough money goes into savings, investments, emergency funds, and your upkeep for the month. This will help you curb unplanned expenses and know when to recognize a need and a want.

We know there are days where there are urgent needs that you have to attend to and you have insufficient funds to attend to them. In situations like that, you could just use your CredPal credit card and pay later when you receive your salary. This way, you don’t have to dip into your savings and you can keep your emergency funds for a higher spend if the need arises.

Action plan: Have a financial plan that suits your income.

Mistake 2: Spending more than you earn

When it comes to reaching your financial goals, the quote “fake it till you make it” doesn’t apply. Acting like a millionaire and having enough funds to spend like a millionaire are two different things. Acting like a millionaire means you dress, talk, think, and eat like a millionaire. Spending like a millionaire means buying things that a millionaire can afford and still have enough money to fall back on.

Basically, do not spend like a millionaire when you are earning thousands. You can manage how you spend and still look like a millionaire, you don’t have to explain to everyone where and how you spend your money.

Action Plan: Do not spend more than you earn, have some limits, and try not to exceed them.

Mistake 3: Excessive subscription plans

Subscriptions upon subscriptions are not healthy for your finances. Some subscriptions are necessary while some are not. It is safe to unsubscribe from all those apps and sites you have subscribed to but you no longer use their services or use them once in 3 months. One of the features of these subscriptions is that they automatically remove the money from your account when you forget to unsubscribe or cancel the plan.

Action Plan: Unsubscribe from accounts and apps you do not make use of or hardly use and seek free options.

Mistake 4: No plan for your emergency needs

Emergency needs will mostly arise and emergency funds should be available to meet those needs. This is one of the mistakes that people make that often leads them to borrow from friends and family and then dealing with disappointment when they cannot meet up with their needs. A hack to deal with this is to get a credit card to help you through situations like that. For example, your phone packing up in the middle of the month is not planned for but you have to fix it. This is where your emergency funds come to play and if what you have saved in your emergency fund isn’t enough, you can use your credit card.

Action plan: Get a credit card that can help you fix your emergency needs and small ticket purchases when they are still urgent.

However, a credit card should not encourage you not to fail on planning your expenses, because not having a plan will affect how you spend what is on your credit limit and might affect your repayment which is bad for your credit score. Planning your finances + saving + getting a CredPal credit card = financial freedom.

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10 Things to Buy With Your Credit Card

CredPal — Thu, 05 Aug 2021 15:15:10 +0000

Credit cards are created to help us meet our needs and make small-ticket purchases when they are urgent. This means that we do not have to worry about running into debt that might take forever to repay, we also don’t have to keep asking our loved ones for financial help when we can get them ourselves with a credit card.

There are so many things you can use your credit card to purchase. We will highlight 10 of them in this article. This is to enlighten you and also to debunk the misconception that you can only perform a few transactions with your credit card. The truth is you can use your CredPal credit card on all payment platforms that accept MasterCard and Visa cards.

1. Appliances and Electronics

One of the many things you can purchase with your credit card is electrical appliances like your refrigerator, microwave, gas cooker, electric iron, and other appliances. You might be wondering if this is possible, it is actually possible if your credit limit is enough to get them. This also helps increase your credit score when you buy big things with your credit card. There are some merchants that have partnered with CredPal and when you patronize these merchants, you get discounts and cashback. These are ways CredPal rewards you for using your credit card.

2. Online purchases

We are now living in the technology age where we do not have to go to malls to get things done. You can conveniently sit in the comfort of your home to shop and get it delivered to you. Using your credit card for online purchases is one of the safest things you can do. When making a purchase online with your credit card, your information is processed through an encrypted channel to the payment processor that handles the transactions. This helps protect your credit card information from cybercrimes.

3. Home Repairs

In as much as some of the engineers or artisans that come for home repair like to be paid in cash, a lot of them are also open to being paid via bank transfer. This helps you to get your credit card to work. We have created a transfer feature on the dashboard, which allows you to transfer funds from your credit card limit to your commercial bank account. So you can fix your generator, refill your gas, house painting, tiling your room, etc. You can do all these and pay with your credit card.

4. Cable TV subscription

Days of going to a physical office to pay for your cable tv subscription are over. You can now do that with your credit card. Be it GOtv, DStv, or StarTimes, you can pay with your credit card and worry less about getting disconnected when your subscription is over. You can also use your credit card to renew your Netflix subscription, it is safe, easy, and reliable.

5. Ride-Hailing Services

We have several ride-hailing apps in Nigeria that have come to save us from jumping a bus or bike to get to our destination especially when the destination requires us to look our best. Imagine jumping a bus after you have slayed for that particular owambe? that can’t happen and that is why you can use your credit card to pay for your rides to your occasion. Be it Oga Taxi, Bolt, or Uber, plenty waka, you can pay with your credit card and not worry about having your makeup gone or shirt stained before getting to your location.

6. Gasoline

Fuel stations are also a good place to use your credit card.

7. Meals at Restaurants

Sometimes we get tired of the usual “mama put” that we want to eat out and enjoy the luxury of being spoilt. CredPal credit card can spoil you whenever you are in that mood. You can also decide to have a weekend getaway with your loved ones while you allow your CredPal credit card to do the spending.

8. Travels

Credit cards are not limited to restaurants or home repairs alone, you can also use your credit card to buy your airline tickets, train tickets, etc. You can also use your credit card to pay for your hotel accommodation.

9. Medical bills

Your credit card can also be a pass to your medical appointments with your doctor. Although, you cannot use your credit card to pay huge medical bills like a heart transplant, intestine transplant, etc. However, you can use your credit card to pay for drugs, dental appointments, change your glasses or lens, conduct a blood test, etc.

10. Tuition

As an adult, one of the things you can’t run from is bills. Bills will keep piling up and one of the planned bills is tuition. May be personal or for the children. You do not have to work yourself up thinking of how to pay your child’s bill when you still have other bills to pay or that particular course you want to start to polish your skills. Your CredPal credit card can fix this.

Credit cards can serve as a pass to some of our needs. With all the things you can use your credit card to buy as listed above, it is advisable to use your credit card like your debit card, and use your debit card as your credit card. What this means is, rather than use your debit card to make purchases, you should use your credit card instead.

Then when it is time to make your repayment, you can then use your debit card to pay for all you have spent on your credit card with the accrued interest. This helps increase your credit score and you get rewards like cash backs and discounts. Do not restrict your credit card!

Source

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Credit Card Scams You Should Protect Yourself From

CredPal — Thu, 05 Aug 2021 14:12:39 +0000

Mankind will forever be grateful to technology for making life easy and comfortable. We can only imagine how uneasy life would be if we still have to queue at the bank to perform financial transactions when we can now do most of them on our smartphones, or when we have to borrow from family and friends when we can now use credit cards to meet our needs anytime and any day.

Although technology has improved our way of life, it has also paved the way for internet fraud and identity theft. The way we have debit card fraud is the same way we have several credit card scams. We will outline some of these credit card scams and how you can avoid them.

1. The Phone Scam

The phone scam is one of the major ways fraudsters scam individuals and businesses. They call and act like they are representatives from the company you are dealing with and request sensitive information about your card. Some of them sound too professional to doubt that they are fraudsters.

How to avoid this

Irrespective of how professional these fraudsters may sound on the phone, please be aware that no legitimate organization will request payment or ask for your card details over the phone. However, if you notice that the call sounds legitimate, let them know you will call back using the official hotline, if you notice any pushback, then it is a scam.

2. Mail Theft

Mail theft is another common credit card scam that fraudsters use. They gain access to your email and obtain the necessary information required to create an account in your stead. They give out your information to the financial organization issuing the credit card and once your account is approved, they use the card in your stead while you pay for an account you never opened.

They are called email hackers, they hack your account and obtain all your necessary and vital information.

How to avoid this

Make sure your email account is on a 2-way authentication mode so that hackers do not gain access to your account. Also, pay keen attention to your credit reports and financial accounts to identify abnormal activity so that you can report them.

Credit card scams

3. Public Wi-Fi Scams

Everyone loves free wifi, that opportunity you get to access the internet at no cost, we love it. But it is advisable not to connect to wi-fi that is not secured because the activities you perform are liable to other parties. Do not perform any financial activity with a wi-fi that is not secured.

Another common Wi-Fi-related scam involves hackers creating a Wi-Fi access point with a similar name to an official hotspot to scam visitors. Such hotspots are typically set up to let the operator view the information that travels between connected devices and the access point.

How to avoid this

Make sure you perform any financial transactions with your wi-fi. This way, you are sure that no one else has access to your login details.

There are more of these scams that are not captured in this article. Once you notice any call, SMS, emails, social media DMs that looks suspicious or is requesting you to pay for something you are not sure about, or asking for your card details, kindly decline and contact the official phone numbers of the company to report such actions.

Please beware, CredPal will not ask you to pay for something that you shouldn’t pay for, CredPal will not ask for your card details over a phone call. Keep your accounts secured and reach out to us if you notice any information that you do not trust.

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8 Things to Know Before Getting your Credit Card

CredPal — Thu, 05 Aug 2021 13:18:50 +0000

Credit card education is important because credit cards are prone to be misused if they are not properly handled. Although there are thousands of credit cards in Nigeria there are users who still cannot find their way around the use of a credit card and run into debt. These 8 essentials will help you to avoid running into debt and other things that could as a result of not managing your credit card well.

1. Understand the concept of Credit cards

Before you get a credit card, you should know what a credit card is. A credit card is a card that allows you to borrow money from a lender. The “money” borrowed is known as the card’s credit limit. You can use the card to make basic transactions like paying for food, gym membership, hair appointment, shopping for groceries or clothing, online purchases, and several other everyday expenses you may have. The fund in the card is provided by financial institutions or credit card companies like CredPal.

2. Understand credit card terms

Just as debit cards have terms so does a credit card. Credit card terms are words and phrases you will regularly come across as you use your credit card. This ranges from knowing your billing date, billing transfer, credit limit, payment summary, posting date, reference number, cashback, and so on.

Also Read: What is a credit card?

3. Understand your credit card interest rate

An interest rate is an amount you pay financial institutions or lending organizations like CredPal for using their card. Credit card interest varies from the rates for purchases to the rates for cash loans. Here’s CredPal’s interest rate.

4. Paying late is costly

You are required to pay back the money you spend on your credit card after your billing cycle which is mostly your salary date. Paying late can attract fees and can affect your credit score. You can avoid this by automatically setting your repayment from your bank account or set a reminder that can prompt you to pay when due.

5. Make sure you’ve not applied for different credit cards before

Switching between different credit cards can affect your credit score which might stop other lending organizations from giving you a credit card because your account has probably been refused by other organizations which would reflect on your credit score.

6. Use your card responsibly

One of the benefits of using your credit card responsibly is that you are covered by unnecessary fees that you may incur on your card when you don’t make timely repayments.

Credit Card Education – Below are tips that can guide you to using your card responsibly

Make your repayment on time at the end of the month. By doing so, you assure your lender that you have enough to pay back and this can increase your credit limit and increase your credit score.
Make your repayment in full at the end of the month: Do not abuse the purpose of a credit card. By abusing it, you extend it to a long-term loan rather than a short-term loan that it was built for. And you will be charged for late repayment.
Try not to max out your credit card: This is just good practice. helps you to control how you spend with your credit card so that you can pay back when you have to. If you max out your credit card you might find it hard to make your repayment and that might incur charges and might lead to debt.
Never put anything on a credit card that you won’t be able to pay in full when the bill arrives.

7. Read your credit card terms and conditions

Many run away from reading terms and conditions because they feel it is too long and by running away, they miss out on the important messages. It is essential not to skip these terms to be on the safer side and make sure the terms and conditions suit you.

8. You get rewards for using a CredPal card

With a CredPal credit card, you get rewards with money or points that you can use to buy anything from a frozen turkey to a flight to Turkey. As your credit card performance and income improve, your credit limit may be reviewed for an increase. That means you have more funds at your disposal.

Credit card education is very essential before owning a credit card. Running into debt is not the goal for owning a credit card, the goal is to help meet your needs at the time you need them. Get familiar with these terms and make your repayment early so you can have a great credit score.

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