In Malaysia, when applying for a home loan or other credit products, banks typically check the applicant’s credit history, including records from CCRIS (Central Credit Reference Information System) and CTOS. Your credit history and credit rating directly influence a bank’s decision on your loan application. If your CTOS credit score is low, don’t worry—there are ways to improve it gradually. Here are five key methods to help you increase your CTOS credit score.
Method 1: Pay Loans and Bills on Time
If your credit score is low, the first step is to ensure that all loans and bills are paid on time. This is the foundation of building a good credit history, as banks want to see that borrowers have the discipline to make timely repayments. Consider the following:
- Set Payment Reminders: Use a calendar or financial app to set reminders to ensure timely payments.
- Use Automatic Transfers: Set loans and bills for automatic transfer to avoid missed payments. Ensure that the transfer date is a few days after you receive your salary to avoid insufficient funds.
Paying loans and bills on time is crucial for improving your credit score. It helps prevent late payments from affecting your credit history.
Method 2: Regularly Check and Correct Errors in Your Credit Report
To ensure your credit score is accurate, you must regularly check your credit report. If you find errors, report them promptly to the relevant agencies for correction. This is because CTOS relies on information from organizations, companies, banks, and individuals to generate credit scores. Keep the following in mind:
- Check Your Credit Report: Obtain your credit report from CTOS regularly to ensure all information is correct.
- Check Your Credit Report: Obtain your credit report from CTOS regularly to ensure all information is correct. Correct Errors: If you find inaccuracies, contact CTOS or other relevant agencies to request corrections and provide supporting evidence.
By correcting errors in your credit report, you can prevent inaccuracies from lowering your credit score.
Method 3: Keep Your Credit Utilization within a Reasonable Range
High credit utilization can negatively impact your credit score, as banks prefer borrowers who use their credit cards or credit limits rationally and with planning. Consider the following to maintain reasonable credit utilization:
- Limit the Number of Credit Cards: Avoid applying for too many credit cards. If you have multiple credit cards without annual fees, consider keeping just the most frequently used one.
- Reduce Credit Card Debt: Minimize outstanding balances on your credit cards, aiming to keep credit utilization below 30%.
Maintaining reasonable credit utilization not only reduces debt stress but also gradually improves your credit score.
Method 4: Rebuild a Good Credit History
If your credit history has been impacted, you need to rebuild a good credit history. Just as you would get regular health check-ups, it's important to regularly review your credit score and take steps to improve it. Consider the following steps:
- Pay on Time: Ensure monthly payments are made on time to avoid late payments.
- Reduce Debt: If you have high debt levels, create a plan to gradually pay it off.
- Avoid Frequent New Credit Applications: Each time you apply for a new credit product, a credit inquiry is recorded. Frequent inquiries can affect your credit score.
By rebuilding a good credit history, you can gradually restore stability and reliability to your credit score.
Method 5: Seek Advice from a Professional Financial Planner
If you're unsure about how to improve your credit score or need more in-depth advice, consulting a professional financial planner is a wise choice. They can provide personalized guidance and help you create a plan to improve your CTOS credit score.
These five methods can help you gradually improve your CTOS credit score, thereby increasing your chances of success when applying for loans from banks. Remember, building and maintaining a good credit score takes time and patience, so stick with these methods, and you’ll eventually see significant improvements.
