Your Credit Score Reflects your Credit Worthiness to Banks. A good credit score could mean enjoying better credit terms and better interest rates. This could help you apply for loans for purchasing property and higher credit card limits.

On the other hand, a bad credit score could deter banks from extending a loan or issuing a credit card to you. It takes years to build and maintain a good credit score, but all that can be undone very easily. You could be doing just that without even knowing it!

Being Late on Your Credit Card and Loan Payments
This is the most common mistake that people make. Late credit card and loan payments are reported by banks to the Credit Bureau of Bank Negara and stays in CCRIS for a period of 12 months. This includes student loans such as PTPTN.

So be a good paymaster and make sure all your loans are paid in time. Banking facilities have automatic payment services that help you be on top your repayments. Be sure to closely monitor your credit card bills as well, and don’t spend more than you can afford.

Replacing Your Identification Card One Too Many Times
Every time you have your MyKad (NRIC) replaced, a number on the back of your NRIC indicates how many replacements you’ve had. Having too many replacements put you at risk of seeming like a fraud to lenders, as it hurts your credit score directly.

Owing Money to Telcos, Utilities & Banks
When an account goes into default, regardless of the amount owed, many telcos, banks, and utility companies will remark on a person’s record with credit reporting agencies like RAMCI. Some common reasons include:
1. Unused bank accounts not having enough money to cover the service charges
2. Owing telco’s small amounts of money after service has been terminated
3. Unpaid parking summons

So it pays to be vigilant and settle these amounts, no matter how small.

Having High Credit Card Utilization
A general rule is to try to keep credit card utilization ratio below 70% of your combined credit limit. Anything beyond that tends to upset your credit score. One trick people use is to have multiple credit cards. This increases their combined credit limit and lowers their overall total credit utilization ratio. Having too many credit cards can be just as damaging!

Standing as a Guarantor
Be cautious when standing as a loan guarantor to friends and family because if they default or delay payment, you will be liable for the debt as well. This means, your credit score could be affected just as much as someone who fails to make repayments on borrowings and might remain as such until all arrears are cleared.

Not Actively Managing Your Credit Profile
More often than not, negative credit scores persist because you haven’t checked and aren’t aware that a problem even exists from any of the reasons mentioned above. Therefore, it is important for everyone to know what their own credit profile and to manage it actively.


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