Why Credit Rating Can Affect You Financially?


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When you apply for a loan, your personal information (including your salary, marital status and financial status) is released to the bank and ultimately captured by Bank Negara Malaysia (BNM). This information is stored in BNM’s Central Credit Reference Information System (CCRIS), a computerised database that turns your personal information into credit reports. Every financial institution has access to the same report produced by BNM.

What this means is each financial institution is fully aware of your loan history with other financial institutions. So don’t think you can get away with not paying your loan on time!

What is a credit report?

The report contains detailed information on the individual’s borrowing history, including every loan applied and taken out to date, any late payments or charges accumulated, any involvement in bankruptcies etc. Banks use this credit report to determine whether or not the individual qualifies for a loan facility, and how much they are willing to lend and at what interest rate. Each bank has its own way of deciding a borrower’s creditworthiness, and this is typically done through the calculation of a credit score.

Why is it important?

Many Malaysians underestimate the importance of their credit record. It determines whether you will be approved for any loan products, including credit cards, car loans, home loans and personal loans and what interest rate you’ll pay on these loans.

Having a poor score in Malaysia can cost you money. If you want to take out a loan and your credit rating isn’t good, you may end up paying a higher interest rate than normal. If it is really bad, banks may reduce the amount they lend you, or even reject your loan application entirely.

Therefore, it pays to keep a clean report by religiously paying your bills and servicing your loans on time.

Interested in knowing your credit score in Malaysia? You can obtain your personal credit report from BNM by following these simple steps.


Think you have a less than perfect credit report? Here are five ways you can improve your credit score

Looking for a perfect credit card suited for your needs? Compare all cards on our credit card comparison page to find the best one for you. 

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