Credit Score: What Is a Credit Score?
Getting the most out of the financial system requires understanding the concept of a credit score. Yet, it’s not something we usually think about. In fact, most Malaysians are unaware that there is a national credit rating system. That in mind, we will be providing an overview of the definition of a credit score and how you can take control of it.
What is a credit score?
A credit score is a three-digit number that gives you a snapshot of your credit health. It evaluates your financial history to see if you are credit-worthy. It is a good indication of whether financial institutions will be approving your credit product applications. Just like how you need a resume when applying for a job, you also need full financial health check-up before applying for loans.
Having a good credit score will open up more financing options for you as more banks won’t be afraid to deal with you. On top of that, they might also offer you a better rate for credit products such as home, car and personal loan. A less than satisfactory credit score may discourage banks from giving you a loan.
How is your credit score calculated?
Your credit score is a weighted calculation, with five factors contributing to the final overall number.