How to Improve Your Credit Score Ratings

A credit score is normally derived from your credit report, a detailed record of your borrowings and repayments history as well as your personal particulars. Simply said, it is like a history of your finances. Therefore, a credit report is one kind of file that contains everything that a bank needs to know about your financial history prior in approving your loan application.

You may get to know your credit score through the Credit Tip Off Service (CTOS) if you wish to see your scoring. CTOS is a private company that provides credit reporting and it is widely used by financial institutions in determining an applicant’s credit worthiness. This private company will get the credit related information from various public sources like the National Registration Department, Companies Commission Malaysia and Malaysia Insolvency Department. The types of information related to credit that will be included in the credit report from CTOS include bankruptcy, legal action and case statuses. You may also get to know your credit score or report from CTOS via MyCTOS, in which you have to register to obtain your CTOS User ID.  

It does matter if you have a bad credit score as it affects your loan applications. It is one great factor or consideration by the bank or financial institutions in determining whether to give an approval to your application. Besides, the credit score is also used in determining the amount of interest charged to you on the financial products or services that you apply for. So, it is important to make sure that you keep your credit rating at a healthy level. If not, you should be improving it as you still can do that but not immediately. This process will definitely takes some time.

In case of having a bad or poor credit score ratings, there is nothing to worry but to take action immediately so that your credit score can be improved. As mentioned, it is a process that will take some time and will not be improved overnight. The most basic thing that you should be doing and make it a habit is to always keep track of your credit ratings in order to wipe out any discrepancies. You may do so by getting a copy of your credit report from Bank Negara Malaysia without any fees incurred. All you need to do is visit any branch of Bank Negara with your identification card and fill up an application form, which can also be downloaded online, filled and mail to BNMTELELINK. Then, you will receive a copy of your credit rating. That simple.   

If you intend to improve your credit ratings, never ever delay in debt repayments. It is highly advisable to pay them off ahead of time or if not, at least pay on time. This will not only helps you to pay off your debts easily but also helps in improving your credit ratings. Having good discipline in repaying your debts without any delay will turn you into a responsible borrower and boost the trust between you and the one lending you money. Delayed payments or no payments made can affect your credit history and eventually bring down your credit score. Other than that, delayed in repayment led you to earn a heavy interest payment as well.

Your financial relationships with others can affect your credit score too, either improve or have a toxic impact on your ratings. Therefore, you are advised to be careful when you share any bills or have supplementary credit cards. If there is a late repayment on the supplementary cards, this will surely affects your credit ratings. Keep your finances separate if possible so that you can control your own credit score in an easier manner.   

Another way to gradually increase your credit score ratings include avoiding a default on your debts even in times when you are struggling to pay the minimum amount. You should be contacting the lender in order to organize to amend your repayment schedule. They should be able to advise and discuss with you on the best repayment schedule based on your situation. If you need further advice and help on this, you may refer to AKPK (Agensi Kaunseling & Pengurusan Kredit).   

To improve your credit score ratings, never ever let the companies in chasing you for repayment. If you tend to always forget to pay your bills on time, you are actually not only putting yourself at risk of having to pay for penalties or late charges but also damaging your credit score at the same time. Do not take granted on late payments for your monthly bills like phone and internet bills as a constant late payment will be recorded into your credit score and thus, lowering the score. Consequently, this will give the bank an impression that you are not a disciplined customer and do not have your financials under control. In short, make sure you make payment on time.   

For those of you who have no credit score at all, this can be a bad impression to bankers, similar as having a bad credit rating. You may not need to borrow money but a lack of credit history can be viewed negatively by credit rating agencies. Thus, it is recommended for you to start building up your credit history. You may do so by getting a credit card and enjoy the benefits of it. All you need to do is carefully choose a credit card that suits your lifestyle and spending pattern, and make sure that you pay off the outstanding balance at the end of every month in order to avoid a poor credit score rating.   

If you wish to improve your credit score rating, it is advisable not to opt for multiple loans or credit cards as this may negatively affect your credit score. The reason is due to the high amount of debt that you carry with you and it also affects your debt to income ratio, which eventually pulls down your credit rating if you are overburdened. Another piece of advice for improving your credit score rating is avoid requesting for increased credit limit. If you made this request frequently, it shows that you highly rely on your credit cards. So, do not request for a higher limit unless you really need it.  

Start now if you want to improve your credit score ratings by simply following the steps or methods mentioned above.