Credit Score: What Is It and Why Is It Important?

Credit Score: What Is It and Why Is It Important?

Are you in the process of applying for a housing loan? Have you wondered how banks and financial institutions decide on loan approval or rejections? Your loan eligibility is rated through credit scores, which are calculated by credit reporting agencies like Credit Bureau by Bank Negara Malaysia and CTOS Data Systems, based on an individual’s credit history and financial position.

In this article, we will share with you – What is a credit score, how does it affect your loan eligibility, and how you can improve your credit score.

What is credit score?

A credit score is a three-digit number, that represents a borrower’s overall credit standing and past payment habits. Banks and financial institutions use credit scores to decide if that borrower is credible to receive a new loan or a credit card. 

Banks and financial institutions will typically assess your debt repayment history, status of outstanding debt, as well as any recent applications.

What is considered a good credit score?

CCRIS (Central Credit Reference Information System) reports by BNM don’t tell if your credit standing is good or bad. While CTOS assigns you a good vs bad meter, which is useful enough for a layman borrower to know the status of their financial health. 

Banks and financial institutions use the information in these reports, and their internal standard benchmarks to evaluate loan applicants’ credit score and financial position.

Why is a healthy credit score important?

Your credit score is the ‘report card’ of your financial position. Thus, a healthy credit score is important because it increases the likelihood of your credit application being approved on favourable terms and conditions by the bank or financial institution. 

Where can I get my credit score?

To obtain your CCRIS credit report from Bank Negara, you can personally request for it from any BNM Service Counter, or you can download it from the eCCRIS portal, provided that you have an eCCRIS account. To register for an eCCRIS account, you will still have to visit a BNM office near you in person. Bring along your MyKad and other supporting documents for identity verification.

Alternatively, you can also sign up for a CTOS account to obtain your credit score from CTOS. 

How can I improve my credit score?
  • Make payments on time. Don’t overdue on your payments, as it will reflect on your credibility
  • Avoid mass applying for credit. Find out the borrowing requirements and choose the one that best matches your needs and financial standing
  • Pay-off smaller outstanding debts in full. This helps to ease your existing financial obligations and let your financial standing appear more favourable to lenders.

We hope the above clears some confusion you have about credit scores! Remember to plan your finances wisely and maintain a healthy credit history! 

Original info sourced from:


This article is intended to convey general information only. It does not constitute advice for your specific needs. This article cannot disclose all of the risks and other factors necessary to evaluate a particular situation.

Any interested party should study each situation carefully. You should seek and obtain independent professional advice for your specific needs and situation.

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