• Role of CCRIS in Personal Loan approval

    Personal loans can come in handy when you are in need of additional financing. All banks and financial institutions providing a personal loan nowadays prefer to rely on the CCRIS to check if the applicant is eligible to obtain the loan.

    CCRIS, which stands for Central Credit Reference Information System, is managed by Credit Bureau of Bank Negara Malaysia, and maintains the history of all the credit records of all the customers. CCRIS holds the vital information about the individuals that is required by the banks and other financial institutions.

    Type of Information CCRIS maintains

    The list of information CCRIS holds for an individual is given below:

    • An Individual’s current credit line with the following details: credit amount, types of credit, payment details, and non-payment details.
    • The date of update, type of collateral presented at the time of application, and the frequency on which the repayment has been made on the credit line.
    • Total outstanding balance for each credit line.
    • An individual’s behaviour on the credit line for the recent year and the legality status of the credit channel.

    The Information Banks or Financial Institutions Look for Through CCRIS

    The banks or financial institutions refer to the CCRIS of the applicants to get the following information:

    • The bank account(s) that are under any kind of legal action.
    • Applications for multiple active credit cards and/or personal loans.
    • Missed/late payments made on loans and/or credit cards.
    • The percentage of credit limit utilised by the individual.
    • The instances of the individual exceeding the assigned credit limit on a credit card.
    • The individual’s debt to salary ratio.
    • The amount of debt against the individual’s monthly or annual income.

    Effect of CCRIS on Personal Loan

    The following are the effects of CCRIS on personal loan process:

    • The banks or the financial institutions use the individual’s CCRIS to check if he/she is eligible to apply for the loan.
    • Some banks approve the loan only to the customers who have a good credit history.
    • The banks or institutions that choose to provide personal loans to the individuals with poor credit history can charge them with higher interest rates.
    • With a good credit history, the loan approval will be followed with a quick approval process and a competitive interest rate.

    How to maintain a Good CCRIS Report?

    Let’s look at some ways you can improve your CCRIS report:

    • Try to avoid holding multiple credit lines as it would put you under a financial stress and can fracture your CCRIS report.
    • Try not to use multiple channel payments as it will get burdensome to handle if the cash flow gets stuck.
    • It is always recommended to match and mix secured as well as unsecured loans in your portfolio as the debt of only the unsecured loans can be risky to your credit score. Doing the same can help you get a good credit history.
    • Do not apply for too many personal loan applications across multiple banks at the same time as it may make you seem credit hungry and lower your chances of approval.
    • Always try to make the repayments for the credit cards and personal loans on or before the due date as it will help you get and maintain a good credit score.
    • Before you apply for a personal loan, get a detailed and current copy of your credit card and make sure it reflects a good payment behaviour to ensure approval. A loan rejection will further fracture your credit score.
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