Many are unaware of their credit status until they apply for a loan or mortgage (or tried applying for a credit card!). The Central Credit Reference Information System (CCRIS) in Malaysia provides a glimpse of our credit health. What’s in a CCRIS report, and how do we read it? We shine the spotlight on this essential credit report while highlighting how your creditworthiness is rated by the bank!
Understanding the Importance of the CCRIS Report
What is a CCRIS report? This is a report on your credit that essentially allows lenders, banks and even insurance companies to know the money you have taken and the ability of repayment on your side.
Why Financial Institutions Rely on CCRIS
Banks and other financial institutions will use the information on your CCRIS report to help assess the risk of lending you money. It gives them a picture of your payment track record, how much you already owe, the state of your debts and so on — if you have been diligent with your loan repayment and not embroiled in any lawsuits, your rating would be lower risk.
A clean CCRIS report can boost your chances of being accepted for the loan, potentially getting you better rates too, i.e., lower interest rates. However, a bad credit report could see you being refused a loan or subjected to higher rates. And sometimes it will go beyond the amount you’re applying for; you could apply for a small loan or credit product and still have the CCRIS report be a deciding factor.
Key Components of the CCRIS Report
CCRIS report overview: What it means, and what you need to know The CCRIS report is divided into several sections, each of which gives vital information pertaining to your financing history. It will also help you to understand what each of these segments means, and how they reflect your creditworthiness.
Outstanding Credit Facilities
This tells you all the credit facilities you have outstanding, such as loans, credit cards and overdrafts. In your report, among other things, your outstanding amount against the credit limit is listed here along with your credit payment history (if you have a housing loan, car loan or personal loan, for example, the report will list that loan along with how much you owe).
Getting to grips with this section is super vital because it shows how much available credit you have, and how much you’re using. A high amount of credit utilization (using a high percentage of your credit) can indicate to banks that you could be over-leveraged. It’s a good idea to keep track of your limits and not max them out, or else a bank could consider you high risk.
Special Attention Accounts
Special Attention Accounts (SAAs): refers to credits that are under surveillance by the Financial Institution. Special Attention Accounts normally relate to Non-Performing Loans(NPL) or credits placed under the letter of debt management plan. For instance, where you are required to enter into a debt restructuring agreement with your bank or where your loan has been overdue for several months.
This section is vital. It alerts banks that you’ve experienced difficulty in paying your debts in the past. Too many SAAs on your report will prompt banks to raise their eyebrows, and they will find it more difficult to give you credit in the future. Queries with regard to accounts must be cleared up at once with your bank, either by restoring the account to a normal condition or making an arrangement to suit your means.
How To Analyze Your CCRIS Report
Once you’ve accessed your report, it’s time to analyse it. Here’s how to make sense of the contents.
Locating Payment History and Delinquencies
The most important section of your CCRIS report is the portion showing your payment history. This is where it discloses if you always pay your debts on time and how often you end up paying late. If there are 1s and 2s in that section, (indicating a payment one or two months overdue) it may mean that you have been missing payments!
Look closely at the dates and amounts that appear next to each credit account. Multiple instances of late payments might mean that you handle your money poorly and that could negatively affect your credit rating. Conversely, having a track record of timely payments will reflect well on your credit worthiness.
Identify inaccuracies. If you find any inaccuracies you need to dispute it right away. Mistakes on your CCRIS report can affect your ability to obtain loans.
How CCRIS Impacts Your Creditworthiness
Your CCRIS report is one of the principal factors that banks use to rate your creditworthiness but it isn’t the only one. They will take your salary, employment history and other financial commitments into account as well. However, having a clean CCRIS report gives you a good start at applying for credit.
For example, if you plan to apply for a personal loan or mortgage, the banks will study your CCRIS report for indications of overdue debts, missed repayment dates or other accounts lodged for legal action – which would get your application rejected or at least, attract higher interest rates.
Keep your CCRIS clean if you plan to borrow in the near future. Whether it’s a smaller loan you need or a credit line on the spot, companies like Amanahkredit do offer fast loans and lots of paperwork but you’ll still be dependent on that elusive ‘score’—your credit report, in layman’s terms—to determine how good a prospective risk you are for repayment.
FAQ
What are Outstanding Credit Facilities?
These are all your existing loans and credit lines that have not been settled, such as mortgages, car loans, and credit cards, and overdraft.
What are Special Attention Accounts?
Accounts that have been tagged by the financial institution to keep track of, often those that have missed payments or on special debt management programs like those run by AKPK (Credit Counselling and Debt Management Agency).
How are missed or late payments reflected in my CCRIS report?
Your missed or late payments will be reflected in your report and will be detrimental to your credit profile as banks consider your record before granting loans.