If you are applying for a loan or credit card, it’s best to know where you stand in terms of your credit score. This is because applicants with low credit scores may be subjected to higher financing rates and even rejected for a loan.
Credit information is collected by CCRIS (Central Credit Reference Information System, a record maintained by Bank Negara) and other Malaysia credit reporting agencies such as CTOS and RAMCI based on your loan repayment behaviours with banks and credit companies. Your payment history of your home, car and personal loans, credit cards, student loans with PTPTN are all captured as part of the credit information maintained by CCRIS and other credit reporting agencies.
If you fail to make payments on time (or at all) for your loans or credit cards, as well as legal proceedings brought against you for not making payments as promised, it will be recorded in your credit report.
Even certain utility services like your phone or cable bill which you have left unpaid could eventually end up on your credit report and leave you having difficulties in getting a loan.
Can You Still Apply For a Loan With A Poor Credit Rating?
You can still try to secure a conventional loan. However, depending on the severity of your ratings, you might end up having to pay higher interest rates on the loans offered and worse still, be outright rejected.
How to Improve Your Credit Score?
If you are currently dealing with a poor credit score, you can certainly take steps to clear it and improve your rating. This will give you the best chance of securing a loan or credit at more affordable rates. Here are three ways to improve your score:
- Pay off any arrears and outstanding debts as soon as possible. It will take twelve months for your report to be clear of late payment records.
- Check your credit report every year and look for discrepancies. If there are disputes, be sure to settle it immediately.
- Be a good paymaster and settle all your bills on time. If you have trouble remembering to make payments, just set up an automatic payment schedule with your bank.
Want more tips on clearing your credit record? Read this.
Where Else Can You Apply For Loans with Low Credit Scores?
What if you need cash now and don’t have the time to wait for your credit score to improve? What options do you have for securing a loan? Well, you may still be able to apply for a personal loan from a conventional bank with poor credit but the chances for rejection or heavier interest rates are high.
If you are a civil servant with a bad credit or is blacklisted, then a koperasi loan might be a more lenient option. Find out about the koperasi loan that is most suitable for by checking your eligibility now!