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What are CCRIS & CTOS? And Why are They Important?

What are CCRIS & CTOS? And Why are They Important?

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So you are taking a loan from PTPTN and do not feel the need to repay it diligently after you graduate. Without taking serious note on the matter, you proceed to work in your preferred industry and not long after, you are planning to buy your first dream home. You are so excited and decided to apply for a loan from the bank. However, to your surprise, your application is rejected, and your plan of owning your first dream home falls into limbo. Why is that?

So you are taking a loan from PTPTN and do not feel the need to repay it diligently after you graduate. Without taking serious note on the matter, you proceed to work in your preferred industry and not long after, you are planning to buy your first dream home. You are so excited and decided to apply for a loan from the bank. However, to your surprise, your application is rejected, and your plan of owning your first dream home falls into limbo. Why is that?

As you could guess it, taking loans from any licensed financial institutions will have a record that could make or break your future loan applications. The example given above is a simplified scenario though it would be wise to know your current credit standings so that you would not encounter any unnecessary financial difficulties in the future. This is where CCRIS & CTOS come into play and Prolution would like to help shed light on this topic.

What is CCRIS?

Being referred as Central Credit Reference Information, CCRIS provides credit reports and is managed by the Bank Negara Malaysia, under Credit Bureau. Generally the role of CCRIS is to source for credit-related information on all borrowers who have made loan application to any participating financial institutions in Malaysia. The reports generated by CCRIS are catered to individuals, businesses (sole proprietors and partnerships), companies, professional bodies, associations, societies and Government entities. Who are the participating financial institutions? They may include all licensed commercial banks, Islamic banks, investment banks, development financial institutions, insurance companies, payment instrument issuers, rehabilitation companies, building societies, credit leasing companies and government agencies.

So how do these participating financial institutions pass your personal information to CCRIS? Be aware that they are required by law to submit your information on a regular basis and include the following:

  • Profile of the borrower including name, identity card/business registration number, date of birth/registration, address, etc;

  • Credit application details such as amount applied, date of application, type of facility;

  • Credit account details like the type of credit facilities, credit limit, outstanding balance, installment amount, conduct of account and legal action status, if any.

The data listed above will then be compiled into a proper CCRIS report spanning a period of 12 months (1 year) for any financial institutions’ perusal. Based on the information obtained, they could make sound decision on whether to approve your pending loan application for whatever objective you may have.

As for individuals like you and me, we could see some important details inside the CCRIS credit report that contains the following information:

  • Outstanding Credit: All outstanding credit facilities obtained by the borrower under his or her own name/a joint name with another borrower(s)/a name of a sole proprietorship or partnership where the borrower is the owner of the partnership or the business/the name of a professional body where the borrower is the member of the body or the name of a corporation.

  • Special Attention Account(s): Include every outstanding credit facility under close supervision of the participating financial institutions.

  • Application(s) for Credit: All of the approved loan applications in the previous 12 months along with existing applications that are still pending.

So basically, CCRIS does a good job in providing financial institutions a comprehensive overview of an individual’s financial health. Do not look at CCRIS as something that expose your financial downside or weakness but it also reflects good repayment record if you return your pending loans on time that will give other financial institutions a good impression, leading to a desirable nod from them to allow you the opportunity to take up further credit facilities. Most importantly, they are not the ones to blacklist individuals or subject them to any penalties as it is just a report showing true information.

What is CTOS?

On the other hand, CTOS is also a household name when loan application is concerned. It is actually a private company and playing the role as one of Malaysia’s leading Credit Reporting Agency (CRA) under the Credit Reporting Agencies Act 2010. Similar to CCRIS, they provide credit reporting for individuals and businesses, providing financial institutions another avenue to determine an applicant’s creditworthiness as most financial institutions normally look at more then one credit report to determine an applicant’s credit health.

So what types of report CTOS could generate for you? Well, you will be getting MyCTOS Basic Report and MyCTOS Score Report from them and the various public sources CTOS search to lawfully get your information are:

  • National Registration Department

  • Registrar of Societies

  • Malaysia Insolvency Department

  • Companies Commission Malaysia (CCM)

  • Publications of legal proceedings and notices in newspapers and government gazettes.

  • Subcsribers’ contributions of litigation records

You could expect the details and information inside the report to include bankruptcy, legal action and even case statuses. Moreover, it will also show an individual’s business exposure, business ownerships and directorships, if any. Just like CCRIS, CTOS does not provide own opinions or comments on your financial standing, or worse, getting somebody on a blacklist. Generally, you can obtain your own credit report through MyCTOS.

Why should I care about CCRIS and CTOS?

  • To get loan approval from bank

Sometime or another, you might need to apply for a loan from banks due to several reasons like purchasing a property. How those banks evaluate the viability of approving the loan applications is through your CCRIS or CTOS report. They shall look up your credit history based on the report generated before making any decision. They calculate your debt service ratio, balancing the risk involved and several other factors that will give them comprehensive insight into an individual’s financial health. So if you are having a consistent repayment record, you are almost guaranteed the success of having your application approved, otherwise you will be facing tough challenges to getting them to nod their heads. Not sure how to get around sticky situations with strict financial commitments? Consult us to understand the inside out of loan application procedures.

  • Showcase your credit pattern

Both CCRIS and CTOS act like a two-edged sword. It could show to financial institutions the positive or negative side of your financial health. So if you are that type of person who repays loan consistently without fail, you are on the bright side! The report will be a great tool to act as an evidence that you manage your finances in a controlled and smart way. However, if you like to drag your repayment, better watch out for that inconsistency in your report as that too would be a “disadvantageous” evidence that showcase your incapability in managing your finances. That means, if you took a loan with PTPTN, keep in mind that you have to diligently repay the amount on time as any defaulted payments for your PTPTN loan will show up on your credit report! The consequence is you might fail to apply for a loan from the bank. Hence, manage your finances in a smart way to make sure your payment history is updated and remain positive. Find us to learn how to manage your finances in an effective and positive way.

It is never too late to start anything, let alone developing financial acumen and maintain a healthy practise on your financial management. Be aware of your debt and loans and remember to repay them accordingly!

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