When was the last time you checked your credit score? Well it would seem that Malaysians have a rather laid-back approach to managing their credit history. In fact, as many as 64% have never even looked at their credit report. That’s according to a survey by credit reporting agency RAMCI.

And despite almost 75% of people knowing what a credit report is, an astonishing 56% admitted that they didn’t know what the purpose of a credit score was and how it can impact their credit applications. But when it comes to finances, ignorance definitely isn’t bliss and having a poor credit score can seriously impact you being able to obtain credit in the future.

Financial lenders like Maybank could reject your loan or credit card application based on your credit score, causing you to struggle to get finance elsewhere.

What is a credit score?

A credit score, created by a lender or credit reporting agency is a numerical picture of your credit profile. This credit score may be used by Maybank to evaluate a person’s credit worthiness for a credit card or loan and can even decide the interest rate you will have to pay.

However, many Malaysian banks have their individual method of calculating your credit score. Therefore, getting your loan request approved will greatly depend on which bank you apply to. Your creditor will calculate your credit score and use it to decide whether they will accept or deny your application.

What can hurt it?

There are a number of ways you can damage your credit score. Your spending habits or not paying your bills on time can seriously impact upon your credit score.

And not just that, it can mean that you cannot get more credit in the future. Here are some ways you could be harming your credit score.

  • Always being late to pay your bills will tell another bank that you will likely be late on their payments too. The more times you make a late payment, the more it will hurt your score.
  • Sharing finances with other people, or acting as a guarantor on someone else’s behalf, can be disastrous for your credit score rating. If they default or make a late payment, it will hit your credit score too.
  • While it may seem unfair, not owning a credit card or never taking out a loan does actually more harm than good. The score considers whether you have a reasonably lengthy history of managing your finances and credit commitments. So, the older your credit history, the more points you will accumulate.
  • Having credit applications rejected can have a serious and negative impact on your credit score rating. Therefore, try to only apply for credit when you need it, and when you are confident that you are going to get it.
  • How much you owe can greatly affect your scores, just as much as whether you make your repayments on time.

Take control of your credit profile

Even if you discover that you have a bad credit score, it is possible to turn it around. By working hard to pay your bills on time and reducing your credit card balances you can transform it to a healthy score.

Of course, you can still get by with a poor credit score, but achieving a high rating has many benefits and opportunities for low-interest loans in the future. But in order to improve your financial borrowing position you need to start by knowing your credit score.

A daunting prospect perhaps, but once you know your situation that Maybank loan could be just around the corner.