The most significant indication of your financial health is your credit score at any given point. Suppose you need to make sure that you do all you can to safeguard it for no other reason—one of the things you need to see to avoid common credit mistakes down that road. When you know how to safely bypass the common errors that stall your financial progress or even hurt your credit score, you’ll be able to move freely towards any monetary goal you set! Down that road, here are three of the biggest mistakes that every Malaysian should be aware of regarding their credit.
One – Checking Your Credit Report Only When There’s a Sign of Trouble
Financially speaking, your credit report contains all the data of note about you. Some of its contents include;
- Your credit score
- Your Central Credit Reference Bureau Information System (CCRIS) data
- Business interests
- Directorship, to mention a few.
Whenever there’s a problem with even one of these areas, it’ll reflect in your credit report immediately, even before you get proper notice. However, if you don’t check your report and eventually find out through a formal notification, it might be late to save the situation by then.
Checking your credit report at regular intervals ensures that you’re on top of things. With the regular updates you’ll get from it; you can be proactive when dealing with any problem.
Two – Not Making Timely Bill Payments
Another great way to quickly ruin your credit is to be delinquent with your bill payments. However, most Malaysians don’t often consider that payment history is constantly documented. What’s more, it carries as much as 45% weightage when determining your credit score! A single late payment will linger in your CCRIS record for two years. So, you will have to pay fees and penalties for defaulting, but your credit score will also suffer terribly during this period.
Employ resources like requesting payment reminders from lenders and setting your bank account to autopay so that your bills will always get paid on time. To make these approaches work well, though, you need to ensure that you always have sufficient funds in the bank.
Three – Co-Signing Loan Requests
A friend or relative might come to you with a request to help co-sign their loan as their lender won’t extend credit to them otherwise. But keep in mind that this happens most often because the individual in question has a less than stellar credit score. Also, should they be unable to pay back for whatever reason, you’ll have to bear the responsibility of that debt.
Learn how to say “No” as politely and firmly as possible. You can also recommend that the person check their credit report and know where they stand first before trying to apply for a loan.
Following all these steps might be challenging, but it will ensure that your credit score remains in perfect condition and you’re financially safe!