Updated on 26th February 2021. This article was originally published on 27th December 2019 and has been updated for accuracy and comprehensiveness.
To increase your chances of getting loan approval, the wise thing to do is to get a CTOS report and make yourself familiar with your credit score.
1. What is CTOS?
The CTOS Data Systems Sdn Bhd (CTOS) is one of Malaysia’s leading Credit Reporting Agency (CRA). It is a privately owned agency that archives an individual or a company’s entire credit history. Unlike the 12 months duration of a CCRIS report, the CTOS report longevity is indefinite. The report is used by banks and financial institutions in Malaysia to assess an individual or a company’s creditworthiness and repayment capabilities.
2. Is CTOS legal?
The answer is YES. The Credit Reporting Agencies Act 2010/ CRA Act 2010 provides for the registration and regulation of persons carrying on credit reporting businesses and for matters related to it. This means credit reporting agency like CTOS may only collect and use your credit information to prepare a credit report to assess your creditworthiness, which includes but not limited, to any history of failure or diligence regarding payment of your bills (reputational collateral)
3. What is CTOS blacklist?
CTOS merely provides credit information and does not have the power or authority to blacklist anyone. Approval of loans is subject to the creditors, banks or financial institutions themselves as they analyse the risk appetite.
4. What is a credit score and how it affects a home loan application?
A credit score indicates a consumer’s credit risk. The score ranges from 300 to 850. The higher the score, the lower the credit risk. Having a good credit score can be very beneficial for you, as most banks and credit providers would view you as a prime customer. A good credit score can increase your chances of getting a loan, get you better interest rates and speedier loan approval, among other things.
Not just that, it is also important to remember that the negative items and negative financial history in your credit report will tremendously affect your credit score. Banks and financial institutions can be uncompromising if you have a habit of late or inconsistent repayments.
It gives the impression that you are not being responsible for your financial commitments. Being consistent in your monthly repayment keeps your credit score green. So, make sure to make all your payments before the deadlines.
5. What is the difference between CTOS and CCRIS?
In Malaysia, these financial institutions may use their internal methods of evaluating your credit score. However, to assist them in this evaluation, many will refer to two popular credit reports.
- Central Credit Reference Information System (CCRIS)
The Central Credit Reference Information System (CCRIS) is managed by the Credit Bureau of Bank Negara Malaysia (BNM). It gathers credit information from multiple financial service providers in Malaysia. These include banks, insurance brokers, and even private companies providing utility services such as the Malaysian telecommunication companies.
CTOS is a private agency that provides credit reporting. A CTOS score is calculated based on credit information from both CCRIS and CTOS’s database. It ranges from 300 to 850.
6. What are the benefits of knowing your credit score?
It is always good for you to know your credit score even though you are not buying properties. There are several benefits of knowing your score:
- Your credit score will give you a good idea of how lenders, banks and financial institutions view you. It indicates whether you are a higher or lower risk borrower.
- Checking your credit score will alert you if lenders have listed a late payment on existing facilities in error, or if you forgot to make a payment. It will alert you to that and allow you to rectify it early.
- Regular score checks can also be a good fraud prevention tool as any unexpected changes in your credit score can be investigated to see if any unauthorised credit facilities have been applied for or taken out in your name.
7. How long does it take to clear CTOS?
You should reach out to CTOS by contacting them at 03-2722 8833 or fill up the online form and email to firstname.lastname@example.org if you spot errors that could affect your CTOS score. You will have to provide your MyKad/ IC copies and a description of what is wrong, and what the correct information is.
Documents you’ll need to provide:
- MyKad (both front and back copies, compulsory for verification purposes)
- Documentary evidence from your bank, such as a settlement letter (if applicable)
- SSM, court or litigation documentation (if applicable)
8. How often CTOS update the credit report?
Your CTOS report is updated/ changed every month as CTOS Malaysia constantly gathers and updates your credit information. For any disputed information due to inaccurate information in your CTOS report, it takes 3 to 5 days for your credit report information to be updated, or it may take up more than 2 weeks to resolve complex issues.
9. How do I check my CTOS for free?
There are three types of CTOS report for you to choose from – MyCTOS Basic Report, MyCTOS Score Report and CTOS SecureID. The basic report is free while MyCTOS Score Report and CTOS Secure ID are RM 25/ report and RM 99/ year (exclusive of Service Tax) respectively.
10. How to check CTOS?
Also, here are the three methods to do CTOS self-check:
- Online registration at CTOS website
- Download the CTOS Mobile App
- Walk into any of seven CTOS Service Centres nationwide – Kuala Lumpur (Bangsar South), Klang, Penang, Johor Bahru, Kuantan, Kuching and Kota Kinabalu
11. Where to get CTOS reports?
For the basic report, all you need to do is to sign up for a CTOS Login ID/ CTOS account at the CTOS Credit Manager website. It will provide an overview of your credit score.
12. What information is in a CTOS report?
A CTOS report will include the following, depending on which CTOS report you to sign up for.
- CTOS Score: A rating of creditworthiness and it is indefinite, unlike the 12 months duration of a CCRIS report
- Personal Information: Data from the National Registration Department (NRD)
- CCRIS: Data from BNM
- Dishonoured Cheques: Data from BNM
- PTPTN loan: It is included in the CCRIS report from BNM
- Directorship & Business Interest: Data from the Companies Commission of Malaysia (SSM) for SSM check
- Litigation and Bankruptcy: From the Malaysia Department of Insolvency (MDI), courts, government gazettes
- Trade Referee Listings: From subscribers/creditors (example: utility companies, telco, Astro, etc.)
13. Where does CTOS get information from?
CTOS collects information from various public sources that include:
- CCRIS, BNM
- National Registration Department (NRD)
- Companies Commission of Malaysia (CCM)/ Suruhanjaya Syarikat Malaysia (SSM)
- Registrar of Societies
- Publications of legal proceedings and notices in newspapers and government gazettes
- Malaysia Insolvency Department (MDI)
- Subscribers’ contributions to trade references (eTR)
14. What are the factors that make up a CTOS score?
- Payment History (45%): This is whether you pay your loans on time or have missed payments in the past. Being late for repayments can critically affect your credit score.
- Amount Owed (20%): This is your credit utilisation. How much credit you are using compared to your available limit.
- Credit History Length (7%): The period you have held a credit facility.
- Credit Mix (14%): The type of loans that you have, such as housing loan, car loan, credit card, personal loan, etc.
- New Credit (14%): If you have been approved for new credit facilities recently.
15. How CTOS works?
The general guideline is that a ‘good’ CTOS Score will fall in the range of 697 to 850. This, however, is not a hard and fast rule and does not necessarily mean a lower score is a ‘bad’ score. When banks, lenders or financial institutions evaluate your application for loans or new credit, they may consider other factors besides your credit score.
The chart below explains what a CTOS score means to lender.
16. Can I dispute the information in a CTOS report?
Yes, you can dispute the information in a CTOS report. Your data is your responsibility. You must check and ensure that all information in your credit report is correct and up to date. Sometimes lenders can make mistakes and accidentally mark a payment as missed or late, even if it was on time. You have the right to ask them to put it right.
If you discover information on your credit report that shouldn’t be there, you can request to have it removed in a process known as dispute resolution. All you need to do is to contact CTOS at 03-27228833 or via email at email@example.com. CRAs have a redress mechanism in place to ensure any disputes are resolved within 21 days.
17. How do I improve my CTOS score?
Having a poor credit score isn’t the end of the world. You can always practice and look for practical ways to improve credit health and avoid loan rejection. Here are some of it:
- Start paying your bills on time. If you are the forgetful type, sign-up for auto-debit services and pay at least the minimum amount.
- Keep your balances low and avoid maxing out your credit limit. Be mindful when you swipe your credit cards and do not apply for new credits unnecessarily. Only spend within your limit. Always keep in mind that the debt balances on your credit cards may affect your score even if you make payments on time.
- There is no quick or instant method to fix a credit score. You need to manage it responsibly over time and be consistent.
- It also depends on the situations, for example:
- If your score is low simply because you have never had a credit card before, your score will go up each month as you make credit card charges and pay your monthly bills on time.
- Paying down balances also improves your debt-to-credit ratio and raises your score.
- Adding an instalment loan, which is a loan that requires a regular monthly payment — such as an auto loan — changes your credit mix and can raise your score.
- It can take years to rebuild your credit score if you’ve regularly missed payments, declared bankruptcy, defaulted on a loan or had a loan turned over to a collection agency. However, even in this situation, you can start raising your score if you can get credit and make timely payment.
18. If my home loan approval is rejected by a bank, will others do the same?
Each bank or lender has its risk appetite, business policies, and strategies. Therefore, an application rejected by one may be accepted by another. However, undischarged bankrupts and wound-up companies will unlikely get loan approval regardless of which financial institutions they approach.
Other than checking your credit score, you can also check your Debt to Service Ratio (DSR) to avoid being rejected by a bank or financial institutions. This is crucial as not getting bank loan approval from one bank can set you back 3 to 6 months in applying for another. You can use LoanCare, a home loan eligibility tool by Malaysia’s No.1 Property Site, iProperty.com.my to increase your chances of getting a home loan approval.
Edited by Rebecca Hani Romeli