Applying for a loan is very simple in Malaysia. The process involves a straightforward process where you only need to determine what you need and the banks (or financial institution) will do the rest.
How and what they check?
In all cases of a loan application, your credit health will be the center of attention. When you apply for any of these services, they will check your CCRIS or CTOS. The CCRIS report stands for Central Credit Reference Information. It is managed by Bank Negara Malaysia’s Credit Bureau. In other words, CCRIS is a government-owned service that collates credit-related information for borrowers in Malaysia that include not only individuals but companies, professional bodies, societies and other organizations (public and private).
What about CTOS?
On the other hand, CTOS is a non-governmental agency which provides credit reporting for everyone in the country. It is a Credit Reporting Agency that offers these services for financial institutions to evaluate the credit health of anyone applying for a loan or other services. This will help them to make better judgments as the organizations will usually need more than 1 report (CCRIS) before they decide to release a loan or not.
CTOS provides 2 main types of reports namely:
- MyCTOS Basic Report
- MyCTOS Score Report
How this works is that CRA will collect all the information from public sources before the report is compiled and generated. This include:
- The National Registration Department
- The Malaysia Insolvency Department
- The Registrar of Societies
- Legal proceedings against the individual or company
- CCM or Companies Commission Malaysia
The CTOS report will outline all the financial information pertaining to the applicant. This will include any case statuses, legal action, bankruptcy, business ownership and such.
What the CTOS is not?
It is extremely important to know what the CTOS report is not because there are a lot of misconceptions about what CTOS can or cannot do.
- CTOS is not a credit recommendation report. It does not include opinions or recommendations of any kind. In other words, it is up to the judgment of the reader to make the final decision. The CTOS report meanwhile will show exactly whatever information it garnered from the available sources. This means that there will be no cover-ups or sugar-coating of your information. The CTOS report will show what it is, as it is.
- The CTOS report is not the same as the CCRIS report. However, the information provided could be similar. It is the way the information is presented that is different. Ultimately, CTOS is like CCRIS, a credit report and nothing else
Important information about CTOS
One thing for sure, the CTOS report is something that cannot be altered. Whatever status you are your credit health, CTOS will report as it is. You cannot change the information in any way at all. This means that if you are blacklisted, there is no way to change that in your CTOS report.
If your credit health is poor which means that you have defaulted in your loan payments, it will all be shown in the CTOS report. You cannot change or alter it. The only way to change it is to change your payback patterns.
This is where you need to start paying back your loans on time for a few months in order to improve your credit ratings. That will then give a positive indication for the financial institution viewing your CTOS report which will then determine if your application is successful.