A good credit score increases your chances of getting your loan or credit application approved. However, please follow these rules
before You Opt to Borrow:
Borrow for productive purposes only and for something that you need
Borrow within your means
You have a moral responsibility to repay your debts
Borrow from Regulated Credit Providers
Licensed Financial Institutions
Commercial banks that are licensed by BNM to provide financial products and services to the public. For a listing of licensed financial institutions, click here.
Co-operatives
Co-operatives are regulated under the supervision of Suruhanjaya Koperasi Malaysia (SKM), an agency under the Kementerian Pembangunan Usahawan dan Koperasi (MEDAC). For a listing of licensed co- operatives, visit SKM's website at www.skm.gov.my
Licensed Money Lenders
There are money lenders licensed by the Kementerian Perumahan dan Kerajaan Tempatan (KPKT) that provide loans to the public. They cannot accept deposits and their loan interest rates are normally higher.
Unlicensed Money Lenders
There are also unlicensed money lenders, commonly referred to as loan sharks. Their operations are illegal. You are advised not to borrow money from a loan shark.
The success of your loan application largely depends on the following:
Purpose of borrowing
- The purpose of taking on a loan will determine the type of financial product provided.
- The interest rate and tenure of the loan are determined based on the type of borrowing.
Ability to repay
- The loan amount will be decided based on the individual's ability to repay the loan.
- The ability to repay a loan is established from the surplus of income and the stability of the individual's cash flow.
- The debt-to-income ratio is also used as an indicator in determining an individual's repayment ability.
Repayment history
- Payment records for previously obtained loans will also be assessed by banks.
As advised by the Credit Bureau Malaysia, you can start to build a good credit history by:
- Paying your bills on time
- Using only a certain percentage of your credit
- Never applying for too much credit at once
- Keeping track of your credit report every year
- Paying your purchases within six (6) months if you are using your credit cards
- Answering phone calls from the bank even during a financial crisis
- Assessing your cash flow when considering loans
- Applying for loan or credit, if you have none, to build your credit score in CCRIS