The study examined the effectiveness of credit reference bureau on the financial Performance in financial institutions in Nakuru County. The Study used a survey study research design. The population of the study involved 210 employees of financial institutions in Nakuru County. The study obtained primary data by the use of self- administered Questionnaires while review of related literature was used to collect secondary Data. The Primary data was analyzed using descriptive statistics. The researcher used the statistical Package for Social Sciences (SPSS) version 17 in analysis for the Study. The findings of the study were expected to provide a source of information for banking professionals to understand, control and to reduce the impact of increasing non-performing loans from the economy due to credit risk. CRB has played a significant role in as far as risk identification and monitoring is concerned. Moreover, CRB has significantly helped reduce the rate of loan default in the economy as well as increasing credit access. Lastly, it has led to a reduction in the level of moral hazard in financial institutions in Nakuru county.It has been deduced that clients are not getting appropriately rewarded for having a good credit repayment history. Measures need to be put in place to ensure that clients get an advantage for promptly repaying their loans in terms of the interest rate they pay. It is hoped that this will help cushion those with a good credit rating from CRB hence increasing efficiency in the banking sector.