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The Ultimate Guide to Credit Score in Malaysia

Getting a credit card is a milestone for most people. For most, it starts when they’ve been in their job for a year – when banks become a little more trusting when you try to open a line of credit.

Having a credit card provides great convenience. Shopping, spending on fuel, and paying for your monthly bills ultimately becomes easier. While it gives your life comfort, it can cause more harm than good if you’re not responsible with your spending.

How you handle your finances can affect you in many ways. Credit history, credit rating, credit score – are important factors that can adversely affect you if you neglect paying responsibly on your balances.

Most people are not aware of these factors, but fret not! The bear is here to fill you with everything you need to know from building a credit history, credit score definition, to getting a good credit rating.

Credit history, credit report, credit score – what are they?

It was reported that there are 3.6 million credit cards in circulation as of June 2017 in Malaysia.

With credit card spending on the rise, understanding how you manage your credit card affects your credit history, credit report, and credit score is important. This would play a pivotal part towards future credit cards and personal loans approval as well as lead you towards improving it.

Being in the know about your credit history, credit report, and your credit score is the first step towards getting approved for future credit cards and personal loans, as well as help you improve it.

What is a credit history?

A credit history is a record of your debt payment. This shows your responsibility and ability to pay for the loan you have taken.

What is a credit report?

A credit report is a record of your credit history. This contains a record summary of your financial activities, creditworthiness and loan eligibility.

By getting a clearer view of your credit report, you will discover a greater understanding of your spending habits.

What is included in your credit report?

The credit report contains the following credit-related information:

• Outstanding credits

All credit facilities obtained by the borrower, which is still outstanding, either under the following:

This includes your name; a joint name with another borrower; a name of a sole proprietorship or partnership where you are the owner of the partnership or the business; the name of a professional body where you are a member of the body; or the name of corporation.

• Special Attention Account(s)

This includes all outstanding credit facilities under supervision of the participating financial institutions.

• Application(s) for Credit

This includes all your approved application in the past 12 months and pending applications.

Who can obtain my credit report?

Since credit reports contain sensitive personal information, access to them is restricted. BNM can provide credit reports only to:

• Financial Institutions upon any credit application and during the review of creditworthiness of existing customers;

• Any individual for own credit report;

• Registered credit reporting agencies which are approved by Bank Negara Malaysia, with prior consent from the borrower;

• Any individual for credit report of own business(es) i.e. sole proprietorship, partnership or professional body; and

• Any company for its own credit report

How can I obtain my credit report?

You can request access to your credit information from the Credit Bureau. The credit report can be obtained from Bank Negara Malaysia. You can only request for your own credit report. For an organisation or a deceased person, this request can be made by a person authorised by the person from the business or by the court (deceased).

You can get your credit report for free and on the same day of your request. All you have to bring is your MyKad and other necessary documents that can verify your identity (e.g. driver’s license or passport).

While you can get your credit report at BNM, there are also other credit report providers other than Bank Negara Malaysia, CCRIS and CTOS.


The Central Credit Reference Information System (CCRIS) is managed by the Credit Bureau of Bank Negara Malaysia. They provide credit reports as well as collects credit information from financial service providers in Malaysia.

The credit report provided is divided into a span of 12 months. It contains all positive and negative credit information of an individual.


CTOS Data Systems Sdn Bhd, or more commonly known as CTOS is a private company that provides credit reporting. CTOS is generally used by financial institutions aside from CCRIS to determine the credit-worthiness of an applicant.

Since your credit report contains details of your spending habits, this shows how trustworthy you are to the banks. But that’s not the only thing that helps them decide your creditworthiness.

CTOS collects information from various public sources such as:

• National Registration Department

• Malaysia Insolvency Department

• Companies Commission Malaysia (CCM)

• Publications of legal proceedings and notices in newspapers and government gazettes

While both provide credit reports, CCRIS is under Bank Negara Malaysia while CTOS is managed privately.

Another difference is that the credit report information from CCRIS is derived from financial institutions. CTOS, on the other hand, gets all the information from public sources as seen from above.

When you apply for a line of credit, CCRIS credit report is enough to decide if you’re eligible, but if you’re applying for a loan, they’ll use a CTOS credit report to determine your creditworthiness seeing that the risk is higher.

From your credit report, they also look at your credit score.

What is a credit score?

A credit score is a numerical representation of your credit rating. This is derived from your borrowing history consisting of three numbers.

Having a low credit score can mean that you have unsettled debts, payment delinquencies and other activities that show you may not be qualified to handle a debt. Meanwhile, having a high credit score shows your responsibility when paying off your loans on time, and you don’t have any delinquencies.

For a ‘good’ CTOS score, the general guideline ranges from 697 to 850. However, this does not mean that having a high score is necessary. Banks and lenders also take other factors into consideration other than your credit score when you’re applying for a loan or new credit.

Banks and lenders can use your 3-digit credit score to help them decide whether you’re qualified for a credit or personal loan.

The information you have on your credit report and application may be used as a deciding factor on the following:

  • Whether to lend you
  • How much to lend you
  • How much interest to charge you

The latest information on your file will have the most impact; this is where banks and lenders are interested in the most – your current financial situation.

Your interest rate will depend on your credit history and financial situation. For instance, if you have missed payments, financial institutions may believe that there might be some risk when lending to you so they will give you a higher interest rate.

Your credit history may also affect your ability to get exclusive perks such as having an insurance.

If you already have a credit history, it’s best to check it regularly. If you spot any fraudulent activity or mistakes on your credit report, you can report it soon.

What do banks look out for that give a bad impression?

The latest information on your credit report is important to banks. The following information is what banks look out for:

• Missed or late repayments

• Utilisation of credit limits (For instance, having a high utilisation of credit card)

• Accounts under legal status or special attention accounts.

• High Debt Servicing Ratio (DSR). This is conducted when you compare your income documents against your total outstanding credit.

• Multiple credit applications or active loan. If you have a lot of applications, you may look desperate to banks.

How is your CTOS score determined?

Your CTOS score provides useful information that offers an insight into the creditworthiness of an applicant.

The score is calculated based on credit information from both CCRIS and CTOS’s database. The following factors make up your CTOS Score.

Why are credit scores important?

A lot of people tend to underestimate the importance of credit scores in Malaysia. Credit scores are decision-making tools that financial institution use to help them determine:

  • Whether a person will be approved for various loan products, such as personal loans.
  • The rate of interest that will be offered to a person taking personal loan.

Having a poor credit score can be costly in Malaysia. For instance, if you want to take out a personal loan, the bank will check your credit rating. If your credit rating is not good, the bank may charge you with a higher interest rate for the loan. It might even cause a bank to reject your loan application.

When you set a financial goal such as making travel plans or buying a new car, your credit score is likely to be part of that financing picture because your credit rating forms the basis of your borrowing activity.

Therefore, If you’re thinking of applying for a loan or new credit, it’s best to find out what your credit score is first.

| See also: Good Credit vs Bad Credit: What’s the Difference? |

What causes a bad credit rating?

Since your credit score is an important aspect of your financial profile, knowing what causes your credit score to have a poor rating can help you stay away from the pitfalls that can take years to fix.

The following key elements are reasons why you might get a poor rating on your credit score:

Being irresponsible when making payments

Being habitually late on your bill payments can have a negative impact on your credit score. You should maintain a habit of paying on-time as payment history accounts for 35% of your credit score.

Ignoring your credit bills is also bad for your credit rating. When you have an unpaid payment each month, you’re becoming one month closer to having your account charged off.

Unforeseen circumstances such as job loss may also affect your credit score.

That’s why the Credit Counselling and Debt Management Agency (AKPK) provides restructured payment terms that caters to the borrower’s paying ability. Since 2007, 418,981 people have sought their advisory services.

When applying for a credit line or loan, it’s better to assess for yourself if you can make managing your finances responsibly.

Defaulting on a loan

A loan default shows that you have not fulfilled your end of the loan contract. Some have become bankrupt due to their inability to pay car, house, and personal loans.

Don’t be afraid to tell your bank if you are struggling to pay your minimum. Contact your bank to arrange altering your repayment terms.

If you have more than one credit card, identify the total amount of debt and interest rate charged on each card. Pay the one with the highest interest rate first then move downwards from there.

Maxing out your credit cards

Some people tend to go trigger-happy with their credit cards. Since doing this makes your credit card utilisation 100%, this is not healthy for your credit score. It’s best to keep your credit card debt low with 10% utilisation.

Canceling your credit card can also hurt your credit score especially if you have credit balance. This also makes your credit history shorter than what it really is.

When your prized assets are taken away

Specifically, foreclosed homes or repossessed cars. If you’re a working adult in at least your 20s, chances are you have a few recurring payments to be made; this includes loans, bills, and possibly monthly credit card statements that arrive on a regular basis.

Some of these commitments could be homes, cars, motorbikes, or big-ticket items that play a crucial part in ensuring that your days are safe, protected, and running smoothly. These are big responsibilities where fears of foreclosure and repossession could easily jeopardise your credit rating if things take a turn for the worse.

Late or defaulted on your home loan payment? It will be reflected in your credit history – and let’s not forget the interests that would be accumulated. Worst of all, you might even lose your home in a foreclosure.

Similarly, if you are late paying for a hire-purchase car loan, you run the risk of getting your car repossessed. And that leaves a black mark on your credit history as well.

A friendly word of caution – your debt will stay on your credit record until it has been paid.

Little or no credit history on record

Many people take pride that they do not possess a credit card – owing to the negative perception that “plastic fantastic” has garnered. However, this can backfire and work to your detriment.

Without a credit card (a personal loan, a home loan, or even a car loan), you might have no credit history at all. When you are “credit invisible”, agencies such as CTOS will not be able to generate a score for you because there simply isn’t enough information on you in the first place.

The most important point to remember here is that having a score shows how well you manage your money, and by default, your credit obligations.

In addition, owning a credit card alone may not suffice. Your points total is likely to be higher if you can demonstrate a better variety of accounts or debts. It’s no different from recruiting a potential candidate who can demonstrate more than the core skills required.

| See also: Can You Get a Personal Loan with Bad Credit? |

How long will it take to rebuild my credit?

There is no shortcut or quick fix when it comes to “rebuilding” your credit. The length of time It takes to repair your credit history depends on how serious your financial difficulties are and how much your credit history is affected. Rebuilding your credit may take months or years of commitment.

In general, credit history is established slowly over time as you make responsible repayments. If you have a negative mark on your file, it will remain for seven years from the date of the original delinquency.

Rest assured that there are tricks to mend a bad rating in the next section that you can start doing to raise your credit rating.

How do I improve my CTOS score?

Paying attention to the factors affecting your credit score is important. There are always steps you can take to improve your credit score.

Here are some quick tips:

Start establishing a great credit history early

Some people get a credit card so they can start building their credit history early. Having your credit history established early reassures banks that you are a good credit risk by the time you apply.

Pay your bills on time

Make a good impression by paying your bills on time. It’s okay if you made missed payments the past few months – just get current and stay current. This shows that you are capable of managing your finances effectively.

Keep your debts low

Your credit card is not unlimited and having a lot of revolving debt is bad for your credit history, Therefore it’s better to instill a habit of paying your debts off frequently. Maintaining a responsible payment behavior can ensure that your debt will decrease.

Keep your debt-to-credit ratio at 30%, as advised by KC Wong, CEO of Credit Bureau Malaysia. For instance, if your limit is RM10,000, your balance should be RM3,000 or less.

Reestablish your credit history if you’ve had problems

It is critical to fix your credit history especially when you’ve had issues with it. You’ll only aggravate the problems in the long run when you ignore or set it aside. At the same time, don’t take extreme measures such as cancelling unused credit cards abruptly or opening multiple accounts.

It’s best to seek a financial advisor for guidance on the first steps you should take on reestablishing your credit history.


Even if you don’t have a credit card or personal loan, you may have other financial commitments such as subscriptions to telecommunication services like a monthly postpaid plan or a broadband plan.

To establish your credit score, you can apply for a basic credit card. You can easily diversify your financial options when you have a credit card. Just make sure to pay your credit card instalments on time.

Your credit score plays a significant role on your financial activities and can affect your ability to apply for loans and credit cards. While it may sound like a high responsibility, following the steps of maintaining a good credit history can be a piece of cake!

Be sure to manage your credit wisely today by choosing the right credit card for you. Compare with Finder today!

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