How Credit Score Work - Guide to Check Free Credit Report

    When it comes to the realm of banking related products, you may hear many technical terms and while you may not understand the meaning of everything you hear, it is a good practice to figure out what they mean as they may play a pivotal part in your financial life.

    One such term is your credit score. Read on to find out what exactly a credit score means and why it's important.

    Credit History, Credit Report, Credit Score—What Are They?

    Credit history is a documentation of how responsibly you handle your debts and loans.

    A credit report is a record displaying your credit history. It contains information taken from a database system called the Centralised Credit Reference Information System (CCRIS). The information comprises of:

    • Outstanding credit in the past 12 months
    • Special attention accounts
    • Number of credit applications in the past 12 months

    A credit score can be understood as the representation of your credit history in a numerical form.

    What is a Credit Score?

    A credit agency determines a three-digit number describing your credit repayment behaviour, the existing debts you owe and many other factors. This number is known as a Credit Score.

    Who Creates Credit Scores?

    A government-appointed credit agency creates credit scores. There are four authorised credit agencies in Malaysia who provide credit score:

    • Central Credit Reference Information System (CCRIS)
    • CTOS Data Systems Sendirian Berhad (CTOS).
    • RAM Credit Information Sdn Bhd (RAMCI)
    • Credit Bureau Malaysia

    What Is A Credit Agency?

    A credit agency is an organisation that collects credit rating information about a country’s citizens to make it available to banks and other financial institutions. This information is stored in a database known as Central Credit Reference Information System (CCRIS).

    What is a Good Credit Score?

    A good credit score always ranges from 697 to 850. Such a score indicates a good repayment capability of a customer and increases the chances of getting a loan. With a high credit score falling within this range, you can easily get a loan from most banks along with a good interest rate. You may also get the privilege of faster loan approval time.

    Why is Your Credit Score Important?

    Why Credit Score is Important

    A credit score is important because:

    • A credit score indicates your repayment capacity and repayment behaviour.
    • It is a vital factor to apply for a financial product such as a personal loan or a credit card.
    • It plays a role in determining the interest rate on your loan and other financial products.
    • In rare cases, it might be used to decide if a job must be offered to you or not.

    How is Your CTOS Score Calculated?

    The CTOS score is calculated based on the information gathered from CCRIS and CTOS databases. The 5 factors that make up your score are given below:

    1. Repayment History: 45% of the credit score is based on your repayment history. The credit score considers if you have been repaying your loans before the due date or if you have missed any of them.
    2. Loan Amount: The number of loans you have borrowed and the amount you owe to the bank constitutes 20% of the credit score.
    3. Credit Duration: The duration of time from when you have been handling a credit card or a loan will affect 7% of your credit score.
    4. Type of Credit: 14% of the score depends on the type of credit line—secured or unsecured. Generally, a home loan and a car loan are considered to be a secured loan scheme, while a credit card and a personal loan are considered an unsecured credit facility.
    5. Recent Loans: The remaining 14% contribution states whether you have borrowed a loan recently from any bank.

    How Often Do Credit Scores Change?

    Credit scores usually contain the history of your credit behaviour for the past 12 months. And, information on CCRIS will be updated on the 15th of every month. Therefore, you can get an updated report (in turn, an updated score) once every month.

    Credit Score Range

    Different credit scores are categorised with specific explanations on the probability of getting a personal loan. The categories are given below:

    Credit Score Description
    744-850 You are most favourable to get a loan
    718-743 You are the prime customer for money lenders
    697-717 Your score is above average and you are eligible for a new credit
    651-696 Your score is below average making it less likely for a new credit
    529-650 It may be difficult to get a new credit line
    300-528 Your score will affect your credit application
    No Score Insufficient information on your credits

    Am I Blacklisted If My Name Appears On CCRIS, CTOS, RAMCI or Credit Bureau?

    Credit agencies do not blacklist any name. However, it is left to the money lending institution’s discretion to grant or deny a loan based on the credit score.

    What Can Help Your Credit Score?

    • Start contributing to your credit history as early as possible.
    • You must consider debt repayment as a prime responsibility and make repayments on time. Do not forget that the payment history contributes to 35% of your credit score.
    • If you think you cannot complete the repayment by the end of loan tenure, request the bank to make changes to your loan’s terms and conditions. This may include providing an extension to the repayment tenure.
    • Keep the utilisation of your credit card at 30% of the credit limit.
    • Try not to share financial relationships with anyone. That means, do not be a guarantor to a person who does not have the capability for repayment. Also, do not take up a loan in your name for a friend or family member who takes finances lightly.

    What Can Hurt Your Credit Score?

    There are many factors that can hurt your credit score, such as:

    • Irregular Repayments: If you miss paying the monthly instalments on or before the due date, it will affect your credit history.
    • Defaulting Repayment: This is the situation where you have reached the end of the loan tenure but haven’t completed the loan repayment.
    • Credit Card Utilisation: Using up the available credit limit on your credit card shows lenders that you are credit hungry and could lead them to believe that you can’t handle your debt.
    • Credit Card Cancellation: You may cancel your credit card to reduce your expenses and to keep your bills within your budget. However, it may affect your credit score in a negative way.
    • Poor Financial Relationships: If you have taken a loan on behalf of your spouse or friends, and if they slack off on repayment, your credit score will be negatively affected.
    • Rejected Loan Application: If you have applied for a loan and the bank rejects your application for any reason, it will be recorded and will bring down your credit score.

    What to Do If You Have a Bad Credit Score

    You may improve your credit score in the following ways:

    • A single credit line covering the major portion of your debt may affect your credit score. So, try and distribute the debts over different financial instruments such as mortgage loan, personal loan, credit card and others.
    • Pay all your monthly instalments on time.
    • Reduce the use of your credit card on unnecessary expenses.
    • If you have any outstanding loan, settle the loan as early as possible. It will contribute to the betterment of your credit score.

    Credit Report vs. Credit Score: What’s the Difference?

    A credit report is a consolidation of information such as

    • enquiries about you in the past
    • trade references
    • litigations you were involved in
    • your shares
    • your banking repayment behaviour

    In contrast, a credit score is just a 3-digit numerical representation of what is there in the credit report.

    What to Do If You Don’t Have a Credit Score

    Having no credit score means that you do not have a credit history. In this case, you can make efforts to build your credit history by getting a basic credit card. Just make sure to use the card sparingly and repay the overdue balance on or before the due date. This could give you a good credit score in a shorter period of time.

    What Is Not Included in Your Credit Score But Will Be Considered By Banks When You Apply For A Financial Product?

    There are many factors other than credit score that a bank considers before approving your application for any financial product. A few of such factors are:

    • Annual Income: When you apply for any loan, you are considered eligible to apply only when you meet the necessary annual income criteria specified by the bank.
    • Purpose of Loan: You would have mentioned a purpose for borrowing money in your loan application. The bank bases the decision on the purpose mentioned and checks for its validity. If you have falsified the purpose, it may turn out to be a reason for denying your loan.
    • Age: Your age can be a factor that does not influence your credit score but definitely has an effect on loan approval. The bank expects you to have a steady income during the repayment tenure so that you do not miss paying an instalment. If your age is below 21 years or if you have crossed the age of retirement, the bank may deny the loan as you will not have a source of income.
    • Occupation: The bank requires you to be employed at least for a period of 6 consecutive months by the time of loan application. Sometimes, the type of organisation (public sector or private sector) you work in may also matter. If you are self-employed, you must have established your firm and have it in operations for a period of 2-3 years as a requirement.
    • Nationality: When you are looking for a personal loan, your nationality matters. Personal loans are usually offered only to Malaysian citizens and permanent residents. Banks are more careful when an application comes from a foreigner. Foreigners may need to provide the details of any relatives who are residing in Malaysia to process their application.
    • Debt Servicing Ratio (DSR): The percentage of the money spent on monthly commitments (debt repayments) out of the net monthly salary received by an individual defines Debt Servicing Ratio.

    How is CCRIS Different from CTOS?

    CCRIS, a digital repository of credit reports, is managed by Credit Bureau of Bank Negara Malaysia. All the information sent by banks and financial institutions are stored in the database system of CCRIS. This information is automatically sent to the respective credit reports and is made available to everyone requesting for the report.

    Furthermore, under the Credit Reporting Agencies Act 2010, certain agencies are given the authority to access individual reports based on their consent and they are:

    • Credit Bureau Malaysia.
    • CTOS Data Systems.
    • RAM Credit Information.

    As you can see, CTOS is one of the credit reporting agencies that provide credit reports to the citizens of Malaysia. It also provides reports to the member institutions so that they can make decisions on lending credit.

    CCRIS reports are given free of cost, whereas the CTOS provides basic reports for free. An advanced report with all minute details included require you to pay a certain fee.

    They also differ in the way information is gathered to prepare the report. CCRIS makes use of the information updated by the financial institutions. On the other hand, CTOS gathers information from sources in addition, such as legal proceedings published in newspapers, the Insolvency Department of Malaysia, the Companies Commission of Malaysia, and subscriber contributions.

    Will I get My Credit Score & Report Free?

    You can get a copy of your CCRIS credit report for free. All you need to get the credit report, in turn, credit score, is to visit a BNM branch office and ask for the credit report. You can get the report on the spot. However, don’t forget to carry your MyKad and other identity proof documents.

    What Can You Do With Your Credit Score?

    With a credit score, you can get to know what banks or money lending agencies think of you. So, before you apply for a loan, get your credit report and verify if the score is favourable enough for you to get a loan without hassle. If there are issues with the score, try to fix them. Once you fix the issues, get another report and confirm that you can go ahead with the loan application. You can now experience faster loan approval.

    Example Timeline of Credit Score Changes

    As mentioned earlier, the information on CCRIS is updated on the 15th of every month. To give an illustration of how it works, say you have an outstanding loan balance of RM3,000. If you repay the entire outstanding balance in one final settlement on February 13, the settlement details will be updated on 15 February.

    In another case, if you make the final settlement on 17 February, then the update on the settlement will reflect on the credit report only on 15 March.

    Does Checking My Credit Score Hurt My Credit?

    Checking your own credit score may not hurt or reduce it. However, if banks or financial institutions check your score over-and-over within a short period of time, it will affect your credit score.

    Understanding Your Credit Score

    You can get a CTOS report either online or offline.

    • Online: The first thing you have to do to get access to your first CTOS report is to register with your MyKad number, email address and the preferred language. Once registered, you must activate your CTOS user id to get access to your report. You can also access the report from the mobile app.
    • Offline: You can visit the BNM branch office with your MyKad and other supporting documents and get the credit report.

    Reading Your Credit Report

    • First Section: Your credit report consists of the results of identity verification, business ownership, directorships and business exposure.
    • Second Section: The report contains information on any litigations you are involved in and the updated status of such litigations. It holds information on bankruptcy.
    • Third Section: This section reads the financial history comprising the recent loan/credit applications, data from CCRIS, a list of cheques that were not processed. Your comments regarding your financial history are also recorded in this section. You may mention your reasons for missing an instalment payment or leaving a cheque dishonoured due to genuine reasons such as delay in your salary payment, etc.

    Though the report holds the credit history of 12 months, the credit agencies maintain the credit history of each individual for 24 months in the form of archives. Your credit history will not be considered by any financial institutions beyond two years.


    1. Q. When I settle the existing loan in full, how long does it take to reflect in the credit score?

      A. The update on full settlement of your loan must be provided by the associated bank. At the latest, it may be updated by the 10th of the next month.

    2. Q. Does my income affect my CTOS score?

      A. No. Your income does not affect your CTOS score.

    3. Q. Does the free credit report I get include my credit score?

      A. No. The credit report you get at BNM branch office does not include your credit score. To know your score you have to buy the MyCTOS Score Report. In addition, this report includes your payment history given by CCRIS & DCHEQs.

    4. Q. I was declared bankrupt a few years ago. Does this affect my loan application now?

      A. If you have repaid your loan after being declared as a bankrupt, then you must contact Malaysian Insolvency Department at the number 03-88851000 to get the latest update on your bankruptcy status. You can then inform the bank or the financial institution on the latest status so that the loan application can be processed without hurdles.

    5. Q. How is CTOS score different from credit scores offered by other institutions?

      A. A CTOS score includes data regarding litigation and trade references. It is based on FICO standards, which may not be covered by other credit scores.

    6. Q. What is a special attention account?

      A. A special attention account is an account that is closely monitored by the financial institution. A non-performing loan gets special attention as the bank that offered the loan is not earning any income from the loan. This happens when the loan borrower defaults his monthly payments consecutively for three months.

    7. Q. Can a record be removed from CTOS credit report?

      A. A record can be removed from CTOS report when you provide a proof of a fraud/mistake being settled two or more years ago. This is done in accordance with the Credit Reporting Act.

    8. Q. How does having multiple credit lines affect my credit score?

      A. If you have multiple credit lines and a good payment history, it will get you a higher credit score. Indeed, having a variety of loans means that you are good at managing these loans. However, if you have not managed these loans well, it will definitely lower your credit score.

    9. Q. Is it possible to get the credit report of a deceased person?

    10. A. Yes. One can get the credit report of a deceased person. But, the credit report of a deceased person will be shared only with the legal descendant of the deceased.

    This Page is BLOCKED as it is using Iframes.