Credit bureau has its role in building the economy. One would ordinarily think that the
financial crisis which got it roots
from subprime loans should not have occurred in U.S with the existence of credit bureaus, but the subprime loans crisis in U.S which led to financial crisis was not as a result of credit bureaus’ failure rather, the failure of banks to appropriately use the
information provided by the credit bureaus.
The existence of credit bureaus in a nation is very important to avoid financial crisis. It is very vital that Nigeria puts in her mind the establishment of credit bureau which provides a centralized database of consumer credit behavior and gives credit information on individuals to help banks determine the credit worthiness of borrowers and to make the right decision on who best deserves and has the capability to repay the loan.
The panacea for preventing meltdowns in the financial services sector and consequent economic
recession remains only in the establishment of effective credit bureaus to provide the information needed to regulate and secure credit lines, minimize lending risk, create extra incentive for credit consumers to pay their bills in order to keep their credit report clean, enhance the accountability of credit consumers.
Government should however note that it is not just enough to establish credit bureaus but also important to compel banks to use the credit information provided by the credit bureaus proper in determining borrowers who can pay back the loan so as to avoid the subprime loan crisis from also occurring in other countries.