Your credit score is an important indicator of your financial health, so it is crucial to develop good credit habits to build and maintain a good credit history. Learn and avoid common credit mistakes that can stifle your progress and even damage your credit score for years to come.
Mistake 1: Co-signing a loan
If a friend or relative cannot get loan approval on their own, there is usually a problem with their credit standing. If the borrower does not pay as agreed, you will have to repay the debt, and the relationship with your friend or relative will be ruined. Be gentle and tactful in saying no. You can instead suggest that the person try to fix their credit health first before applying for a loan. A good way for them to start is by checking their credit report and seeking financial counselling.
Mistake 2: Not paying bills on time
Payment history has a big impact on your credit score with a 45% weightage, so missing even one payment could wreak havoc on your credit and may result in fees and penalties. Late payment will stay in the CCRIS/CTOS data for 24 months, and it will be used in credit score calculation. While its impact on your score may diminish over time with new positive information, it can still hamper your credit growth the entire time it is there. To ensure you pay all your bills on time, request payment reminders from your lenders or, even better, set up autopay through your bank account. Just make sure you have enough money in your bank account each month to cover your bills.
Mistake 3: Only checking your credit report when there’s a problem
Your credit report contains a lot of crucial information, such as your credit score, CCRIS details, directorship and business interests, litigation and more. If you only check your report when there is a problem, it will take a much longer time to fix things later. Checking your credit report regularly enables you to spot problem areas or inaccuracies early, so you can take immediate steps to correct them. That way, you will be credit-ready when you need to be, for instance, if you need to apply for a loan. Sign up and claim your FREE MyCTOS Report with CCRIS now at https://rewards.starproperty.my/ctosscorecheck.
Established in 1990, CTOS is a leading credit reporting agency under the ambit of the Credit Reporting Agencies Act 2010. Its three-digit CTOS Score will show your creditworthiness. It is an evaluation of an individual’s credit history and capability to repay financial obligations. The higher the score, the higher your chances of securing a loan.
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