What is Credit Score?
It is an important reference Lender (bank, financial institution, retailer
etc) will look into, to evaluate whether the borrower is credit-worthiness based on his past repayment
records, current financial status, future repayment ability and etc. It is designed to measure borrower’s
defaulting risk by taking into consideration of various factors in his financial transaction history.
Factors affecting Credit
CCRIS and CTOS Reports
In Malaysia, CCRIS and CTOS are the most widely
used references for all financial institutions to assess their client's Credit Score, before looking into
other relevant factors.
- Do not leave any repayment overdue, pay at least the minimum amount (5% for
Malaysia). Any overdue record would affect your credit score. Make repayment, installment timely and consistently
will help you score good rating.
- Lender likes to see big gap in between your credit limit and the amount used. Keep
your balance below 30% of your credit limit will help your credit score. Note: cancel your credit card may
have negative score due to decline in credit limits.
- Your past repayment behaviour for credit card, mortgage loan will have impact to
your credit score. Contrary, you might not able to score well without one.
Types of credit history
- Types of credit facility you have in credit card (revolving), retails, mortgage,
Recently obtained credit amount/facility
- Applying for multiple credit cards, personal loans in short period of time would
have adverse impact on your credit score.
Evidence of stability
- Moving house will adversely affect your credit score, make sure to proceed with
Credit applications before moving house. House owner scores better than renter. Being employed or working for
someone rather than self-employed, and the longer staying with one employer scores better.
Personal Loan, Credit card outstanding
- personal loan and credit credit card outstanding adversely affect your credit
score. It reflects not only your commitment but also your affordability to repay