In a volatile economy as we have in this country where things change quite often and with banking education and business experience yet to become well entrenched, a bank should not be caught off guard because of poor administration and control of its loan portfolio. Credit management becomes a backbone for either preventing bad debt or recovering bad debt. For this reason, the present study investigated the effectiveness of credit management in the banking sector. In carrying out the study, four research questions were formed with three hypotheses.  The study employed a survey research design which enables the researcher to elicit the opinions of the respondents regarding the effectiveness of credit management in Nigerian banking sector in relation to the variables under study. A sample size of sixty (60) respondents was purposively selected to constitute the sample size. A structured questionnaire was used as instrument for data collection whereas descriptive statistics such as means, frequencies, and percentages were used to analyze the data collected. Also, Chi- square was used at 0.05 levels of significance for hypotheses testing. Findings from revealed that:  the credit policy put in place by the Nigerian banking sector is effective in curbing bad debt in Nigerian banking sector; the credit administration in the Nigerian banking sector is effective in meeting customers’ demand in Nigerian banking sector; and Finally, the procedures put in place by the Nigerian banking sector are effective for the recovery of bad debt. In view of these findings, the researcher recommended that Nigerian banking sector should strictly adhere to the established credit policy to avoid bad debt;     the credit policy should be update regularly in line with the changing nature of the nation’s economy; the credit administration should be made in such a way that it meets the customers’ satisfaction since customers are the key for every business development; Finally, the study recommends that the procedures put in place should be renewable to meet the changing nature of business.