How Does CCRIS Affect PTPTN Loan Borrowers

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CCRIS refers to a database system containing comprehensive credit information on Malaysians, which is collated by the Credit Bureau under Bank Negara Malaysia.

Those who follow the news would know that on 20 August 2013, the National Higher Education Fund Corporation (“PTPTN”) announced it would begin collaborating with Bank Negara Malaysia to list PTPTN loan holders under the Central Credit Reference Information System (“CCRIS”).

On the very next day, it was reported that there was a remarkable turn of events as the Government agreed to shelve the very same proposal, bowing to widespread criticisms that the linking of PTPTN loan holders to CCRIS would add further financial strain on young Malaysians.

If you are unfamiliar with the acronym “CCRIS”, you may not fully comprehend what the fuss is all about. To keep you up to speed, we hereby let you in on what CCRIS is, how it works, and how it can affect your loan applications.

What is CCRIS?

CCRIS refers to a database system containing comprehensive credit information on Malaysians, which is collated by the Credit Bureau under Bank Negara Malaysia. The data contained within CCRIS can be made available to banks in the form of Credit Reports, who proceed to use such information to make vital decisions.

What Are the Kinds of Information Attainable from CCRIS?

Upon formal request from a bank*, the Credit Bureau lifts specific credit information from the CCRIS regarding an individual or a company, and releases the said information to the bank in the form of a Credit Report.

Generally, the Credit Report contains the following information:

–          All outstanding credit facilities (such as loans and credit cards) obtained by a borrower.  Credit facilities which have been fully paid are not included.

–          Outstanding credit facilities which are under close supervision by banks.

–          Credit applications approved in the previous 12 months for the borrower.  Applications which have been rejected, deleted or cancelled are not included.

*Take note a Credit Report can only be offered to a bank for the purpose of evaluating a credit application.

How do Banks Use Information from the CCRIS?

The Credit Reports derived from the CCRIS are used mainly by banks to assess applications for credit facilities (such as a loan or a credit card). So if several banks reject your loan applications on the grounds of adverse credit record, there’s a strong chance that your Credit Report is unhealthy from a financial point of view.

How does CCRIS Know So Much about Our Financial Standing?

This is due to the fact that in Malaysia, financial entities (which include licensed commercial banks, Islamic banks and investment banks, amongst others) are obliged to report to the Credit Bureau on the particulars (eg. names, identification numbers, addresses) and account details (eg. types of credits, outstanding balances, legal actions if any) of all credit facilities.

All these information are stored within the CCRIS.

Other Things You Might Wish to Know About CCRIS

–          If you like, you can obtain your own Credit Report. You can do so by approaching the Customer Service Centre of Laman Informasi Nasihat dan Khidmat BNM of Bank Negara Malaysia at Tingkat Bawah, Blok D, Bank Negara Malaysia, Jalan Dato’ Onn, 50480 Kuala Lumpur.

–          Many people claim they have been “blacklisted” by the Credit Bureau. Technically, this is not true as the Credit Bureau can only offer factual information in the form of a Credit Report, and not opinions. The decision to approve or not approve a bank loan ultimately lies with the banks.

–          Whatever your reasons, it is never a good idea to have an unhealthy track record on the CCRIS. To “clean up” your record on the CCRIS, make a plan to clear up all outstanding loans and debts you owe to the banks.

The Implication of Linking CCRIS with PTPTN

Based on the original plan to link PTPTN loan holders to the CCRIS, banks will be able to readily identify people guilty of not repaying their PTPTN loans, which may in turn affect their chances of securing a credit facility (by virtue of having defaulted on their study loans). The impact will be especially drastic on fresh graduates, who are mostly dependent on bank loans to buy a car or a home.

With the plan being scrapped, outstanding PTPTN loan status will continue to have little effect an individual’s ability to apply for credit facility with a bank (because the bank will not be able to see the applicant’s PTPTN status on his Credit Report).

Whatever it is, if you have outstanding PTPTN debt, it is still a good idea to talk to your PTPTN officer on a repayment plan sooner than later.

Love this article? You may also wish to learn about another new policy (regarding EPF) that was implemented in 2013.

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