What is a credit score (credit score)? A credit score is a score with a three-digit format (between 300 and 850) specific to each individual and shows a credit report based on the record of payments, bill payments, the number of credit applications and the amount of loan applied for. This report also provides an in-depth analysis of all your debts and repayment habits.

From there, you can assess your own loan repayment habits, and also check if you’ve missed any important payments that will impact and hurt your score. Your report will also tell you if there are any active lawsuits taken against you. Have you ever wondered what the bank or financial institution considers when you apply for a loan? How will a financial institution know if you qualify for help to buy a new car or what helps a bank decide to give you a loan?

The meaning of credit score is as follows:
744-850 : Excellent
718-743 : Very Good
697-717 : Good
651-696: Medium
529-650: Low
300-528: Weak

Your credit score shows whether you have a stable financial record or vice versa. Although this credit scoring score plays a very important role in loan applications, many people still do not care or do not want to know about the credit score. If your application is rejected, you usually won’t know what exactly is wrong with your credibility as a borrower. Your credit history is stored by a database owned by Bank Negara Malaysia known as the Central Credit Reference Information System (CCRIS). From here, credit reporting agencies such as Experian Information Services Sdn Bhd, CTOS, and Biro Kredit Malaysia are allowed to access your credit score information.

Factors that can affect credit scores are:
· Total debt amount
· Account types & credit combinations
· Record of payment delays & late payment amounts
· Account opening period & credit report
· New credit applications & rejections
· Legal track record.

However, if you manage your finances consistently, it will improve your credit score in the long run because it proves that you can handle your finances well. Don’t worry there is still hope to improve your credit score. The longer you pay your debts on time, the better your score will tend to be.