Most Malaysians don’t care about their credit score. If you are reading this, you are the minority who are proactive. Congratulations!

A good credit score is not a guarantee that you will get your new loan application approved. The reason is that the lenders do look at other aspects before granting a loan such as your debt service ratio (DSR), your occupation, the collateral and the amount of down payment. However, a good credit score is very much required for loan approval.

Most people think that paying bills on time is all it takes to score high, but let’s discover others equally essential matters.

According to RAMCI’s i-SCORE guideline, there are mainly five areas that affect your credit score:

– Payment history

– Legal history trace

– Length of credit history

– Credit limit utilisation

– New credit application        

Let’s explore the ways to have a better credit score.

Payment History

First, you need to ensure you pay all your bills, mortgage, hire-purchase, credit cards, PTPTN, and other loans instalment on time. You also want to make sure that your lenders reported the accurate info to the Central Credit Reference Information (CCRIS), managed by Credit Bureau of Bank Negara Malaysia.

To monitor your payment history, the most important document to refer is your personal CCRIS report. It is free to get your CCRIS report printed at Bank Negara branches, or download it online at  


– Pay all bills and loan instalment on time, before the due date.

– If you have missed payments, get current and stay current.

– Check your CCRIS report regularly (at least once a year if not more frequent)

– Examine the latest CCRIS report before you apply for a new loan so that you can tackle it before application.

Legal History Trace

You should not have any record of legal history or bankruptcy, or else it will seriously affect your credit score. If there are any legal cases, get it resolved first.

Length of Credit History

Imagine two adults age 40, Jack and Adam. Jack has a few credit cards, personal loans, car loan and housing mortgage. Meanwhile, Adam never has a credit card or loan because he spends solely with cash.

You will be surprised that Jack will find it easier to get a new loan compared to Adam because Adam faces the problem of not having any credit history.

When you don’t have any record of using any credit at all, especially when you get older, the lenders cannot assess your creditworthiness. Therefore, they will treat you as a high-risk individual.


– When you start working, apply for a credit card as soon as possible.

– If you couldn’t get a credit card, get a minimum amount of personal loan and pay it off accordingly in 6-12 months. Then apply for a credit card.

– Don’t be shy to utilise the bank’s various credit lines such as housing loan, car loan and credit cards.

Credit Limit Utilization

Having a higher percentage of unused credit available gives you a higher score.

For example, if all your credit card limits combined is RM100,000, and your outstanding balance is RM80,000, you use up 80% of your credit limit, which is not a good sign.

Similarly, if you have an Overdraft (OD) facility, keep the utilisation percentage low.

In other words, having a higher credit limit helps your score. That’s because you get more room to use your credit due to the higher ceiling!


– Keep your credit utilisation below 30%.

– Call your creditors once a year to ask for a credit limit increase. They usually ask for income proof.

– If you use up your credit cards limit, pay them off every month. It could hurt you if your credit score is pulled at the time you nearly max out the ceiling.

– It is better to have several credit cards even though you just frequently use one of those.

– When you apply for a new loan, make sure you have a low balance on your credit cards and OD before submission. This action will reduce your Debt Service Ratio (DSR) which will increase your chances of getting approval.

New Credit Applications

An inquiry shows up when somebody pulls your credit report. More inquiries on your credit report is not a good thing and will lower your score.

However, it only applies to a hard inquiry by a financial institution. Your action of checking your credit report is considered a soft inquiry and doesn’t post any harm even if you do it frequently.


– Apply for new credit accounts only when you need them

– If you are applying for a mortgage from multiple banks for the same property, submit the application during the same week. It is understandable that similar inquiries pop up during a very short window of 1-2 week is for the same single purpose. So it won’t hurt your credit score.  

– If your loan application is rejected, don’t immediately apply for the next one. There must be a reason why your application is disapproved. So take the time to fix the problems, get a better credit score and try again when you are ready.

General Best Practices

– Use each credit cards at least once periodically just to keep it active. It shows that you actually make use of it.

– Keep a small outstanding balance. It is okay if you just pay off the full amount right before the monthly due date because that will not post a zero balance on your cards. But you shouldn’t pay off the outstanding balance every single day or week. That is in fact not healthy because it will show the lack of utilisation when the balance keeps showing zero.  

– Having many different types of credit history helps. So you better have a home loan, a car loan, and credit cards even though you have the money to buy everything with cash.

– If you have a big sum of cash, do consider becoming a premier banking or privileged banking customers. You might get a better interest rate and loan package when you need one.

– Lower instalment commitment reduces your DSR. So, stretch your mortgage and car loan to the longest tenure. You can always pay it off earlier if you want. The idea is that this practice allows you to have more flexibility when applying for a new loan as you have more room for DSR calculation.

– Avoid being a guarantor.

– Avoid applying for joint-loan with your spouse or family. You will have a separate quota for DSR and first two 90% loan-to-value residential property financing.


Personal finance author and trainer

    27 replies to "Credit-Savvy: How to Maximise Your Credit Score"

    • Jerome

      Hi, is unused credit card limit considered a commitment when come to DSR calculation? I heard that the bank would take 5% of the total credit card limit as Commitment. Lets say the total credit limits is 50K, 50Kx5%= RM250, the bank would consider RM250 as your commitment when comes to DSR calculation, is that true?

      • KCLau

        I am not sure as banks use their own guidelines, and different from each bank. It might be true.

    • Faridah

      Hi Mr. Lau, Do you have any tips to get my CC application approve by bank? I am earning net RM3300 after deducting EPF and Socso. However 2 banks recently rejected my CC application. When I check my credit score, I found out there is no credit history as I do not have any loan. I am not keen to take up any loan at the moment, as I am saving to buy my dream home. What can I do to get my first CC, especially no annual fee CC from the 2 popular banks. I think you know which one.

      • KCLau

        You can try approach a banker in the branch. Ask for their advice on how to get your credit card approval, before applying for one.

    • Thayal

      Hi KC, I have a question. If I apply for credit card but only use it once in a while, say less than 200 monthly, will it have any effect on my credit score? I’m planning to get a free for life CC.

      • KCLau

        More cards with low usage help the score.

    • Ragu.K

      hi, i am planning to settle outstanding balance of the credit card in full. after doing so will my credit limit be utilised? will this payment rectify my financial record? thanks in advance.

      • KCLau

        After you pay in full for all your credit card debts, bank will show “0” on the next month CCRIS report.
        But your previous record will still take 12 months to disappear from CCRIS report.

    • Richard

      Hi KC Lau,

      I have heard that some serious delinquency will left a record in my credit score profile even if I have paid the current balance, and that record will not remove within 7 years, is this true? What do we do to remove the record? Will pay off the debt remove the record? By the way, the debt is PTPTN. Thanks in advance.

    • Muhammad

      Hi, just need your advise on my situation. Recently I applied for a 2nd credit card but it takes forever to receive. Checked my ccris, the bank gives me 11k credit limit. What will happen if I cancel the credit card and try to apply for a new one. Lets just say I hate the service since my 1st credit card took me only between 2 weeks from applying to receiving it. But too bad 1st credit card is only 5k limit. Any advice?

      • Muhammad

        To add on, the current status for the 2nd cc on ccris is ‘pending acceptance from customer’.

      • KCLau

        You can call the bank to get them courier to the right address. Solve it with the bank.

    • Simone Ngo

      Tried to apply for credit card with Citibank few weeks ago but unsuccessful. However, I just realized that I’ve debt with Maxis. Do phone bills affect credit score?

      • Nicholas

        Every debt is linked to credit card my friend. Spend wisely as credit cards interests are the highest, up to 15% per month! Crazy snowball effect!

    • Ivan

      Hi KC Lau,

      I’m planning to get a housing loan for 335k 35 years at 4.75% interest rate.
      I can increase the loan amount to 400k, getting 65k extra cash to put into investment.
      Let’s say i can get average 7% yearly return on investment(let’s say the return is stable enough), is it an good idea put borrow the extra 65k (interest 4.75%) to put into the investment(7% return)? Thanks


      • KCLau

        That will work.

        • Ivan

          Thanks for the reply!

    • Pravin

      Hi KC, I’ve been trying hard to secure home loan and got rejected couple of months back from 2 banks due to my DSR. Then I had an insider from same bank who promised to help and kept my application few months on hold and just a week ago this insider offered too low saying my scoring is ok but my dsr has exceeded. And recomends to other bank and now its under process. This is all for same property I seek on month of Jan.

      Now , how long should I wait for next application for diff property ? I’m sure all this banks checkings and rejection have hurt my scoring now. Pls advice and if you have any property that you think is the best pls do recomend.

      • Pravin
      • KCLau

        You have to tackle the problem of your DSR first. If DSR is the main cause of your rejection, there is no point trying again.
        You need to show that you make more income, or lower your existing loan requirement first.

    • Muhammad Asjad Hassan

      Hi KC, I’m Max. Thanks for the all great information been given so far through email. I have one question, last two months my car loan was rejected. When I checked back, it was my old ASB account hidden fees which I didn’t pay long time ago. This account I canceled right after the day approved and I have no interest over it. But the hidden fees rose up from few hundred into almost four thousand now. And because of that, they put this matter into special attention account column. So Mr KC, if I wanna settle this account, do I get rebate or something or I have to pay full amount? And after the settlement, can I re apply my car loan? Btw I’m 37, my last credit record was with Hong Leong Bank ( car loan ) which ended on 2006. Thanks KC.

      • KCLau

        You will need to settle the issue with your ASB account first – contact the bank and see what’s your option. Since you don’t use the service, you might have a chance to get them reduce the fee and waive it.
        Good luck to you..
        Once it is done, check back your CCRIS report every month. Make sure everything is clear before submitting any new loan application.
        You can also try to apply new loan before that’s settled, but you must inform the bankers about the situation – see if they can have any work around.

        • Sally

          For those who had discharged from bankruptcy, how to restore the credit score?

    • Awstin

      Hi Mr.KCLau. If i did the joint-loan with family, how to withdraw from it?

      • KCLau

        If it is a mortgage, will need to do refinancing.

    • Simone Ngo

      How to find which credit card is best for me?

      • KCLau

        It is much easier than before – try the comparison sites like imoney, comparehero, ringgitplus etc.

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