Mobile loan apps have become an essential part of everyday financial life in Kenya. Platforms such as M-Shwari, Tala, Branch, Fuliza, and Zenka have revolutionized access to quick cash, disbursing billions of shillings each year through M-Pesa. These loan apps use alternative data, such as airtime usage, M-Pesa transaction patterns, and savings history, to evaluate borrowers, allowing even those without traditional collateral to qualify for loans within minutes.
However, while convenient for emergencies, business expansion, or household expenses, improper use can end up hurting your credit score. Your credit score in Kenya is a numerical representation of your ability to manage debt, typically ranging from 200 to 900 on scales used by Credit Reference Bureaus (CRBs) such as TransUnion, Metropol, and Creditinfo. A score above 600 is considered good, granting access to higher limits and lower interest rates. But missed repayments or loan defaults can lower your credit score and lead to blacklisting, restricting access to loans from banks, SACCOs, and other digital lenders for up to seven years.
In fact, each time you borrow or repay, the mobile loan app reports this information to CRBs. Timely repayments build a positive history, while delays or missed payments are flagged as negative listings. Over-borrowing can also hurt your profile by inflating your debt-to-income ratio, a key metric lenders use to assess whether you are financially overextended.
To ensure you benefit from these platforms without damaging your score, here are seven practical tips to follow:
Borrow Only What You Need
Before applying for a mobile loan, assess your repayment capacity. Apps like Branch or Tala typically start with small limits, between KSh 500 and KSh 1,000, to test reliability. If you repay early or on time, your limit gradually increases. Avoid the temptation to borrow more than you can comfortably repay, as this could strain your finances and harm your score.
Repay On or Before the Due Date
Your repayment history makes up about 35% of your total score. Paying on or before the deadline helps you build a solid reputation with lenders. Use M-Pesa reminders, app notifications, or calendar alerts to stay on track. For Fuliza overdrafts, aim to clear them within a few days to avoid accumulating the 1% access fee and daily maintenance charges that can snowball into default.
Limit Applications Across Multiple Apps
Applying for too many loans within a short period can reduce your score. Each inquiry made by a lender is recorded on your CRB file and can lower your score by 5 to 10 points per check. Instead of applying to several apps like Tala, Zenka, and Okash in the same week, focus on using one or two consistently over several months. This shows reliability and reduces the number of “hard inquiries” on your profile.
Monitor Your CRB Report Regularly
It is advisable to check your credit report at least once a year. You can get a free report from TransUnion through the Nipashe app or by dialing *228#. Reviewing your report helps you identify any errors such as missed repayments that were actually cleared or incorrect listings. If you notice any inaccuracies, raise a dispute with the CRB for correction. Tracking your score over time also helps you understand how your financial behavior impacts your rating.
Maintain Low Loan Utilization
Your borrowing level compared to your income is another key factor. Financial experts recommend keeping your loan utilization below 30% of your monthly earnings. For instance, if you earn KSh 20,000, limit total borrowing to KSh 6,000 or less. High utilization signals that you are overdependent on credit, which may discourage lenders from offering better terms.
Diversify Responsibly
While borrowing, also build a savings culture. Mobile lenders like M-Shwari and KCB M-Pesa allow users to save while they borrow. Regular deposits demonstrate financial stability and improve your overall digital lending score. Apps that use AI-based models, such as Branch and Tala, consider such behavior when determining your loan eligibility and limit increases.
Use Licensed and Regulated Apps Only
Always borrow from lenders licensed by the Central Bank of Kenya (CBK). This protects your personal data and ensures fair lending practices. The list of approved Digital Credit Providers is available on the CBK website and on verified app stores. Unlicensed apps often misuse borrower data or charge hidden fees. If you have been blacklisted, settle your outstanding loans in full; CRBs typically update your records within 30 days after repayment and delist you from the negative register.
Jefferson Wachira is a writer at Africa Digest News, specializing in banking and finance trends, and their impact on African economies.