Why credit card is important? and considered double edged sword
Credit card has been poised as the mother of all devil, it creates massive debt for user with compulsive shopping or spending habits. However, it’s the devil of the user itself that utilized the tool without much restraint and consideration. Hence, plunging themselves into massive debts, what I am trying to convey here is, credit card is a shining armor knight that would assist you in getting housing loan approved.
When bank provide you such massive powerful tools such as credit card, don’t abuse it but use it wisely. If the borrower currently had no any debt facilities in their CCRIS, getting a credit card would be the wisest choice compare to personal loan.
Credit card is better debt facility in your CCRIS because you don’t owe bank any collateral debts but just a tool for paying for purchase goods. If you keep your credit card utilization by zero (means didn’t swipe the credit card for goods purchase) in the CCRIS and with very high credit limit, bank will greatly score your credit scoring highly. Because, given you the unsecured credit for usage, you have no such need to utilized it, means you have strong cash flow (bank perspectives).
Keep at least credit card debt facility in your ccris active without utilization will be great for your credit profile, as it will at least show payment pattern & attitude of you with debts. If you are able to discipline well in paying your debts without any arrears, bank able to assess your profile via CCRIS via credit card usage, it will give bank confidence in approving your loan.
Compare to borrower with clean CCRIS record, completely nothing stated inside the ccris record. Bank unable assess borrower paying pattern and attitude. Usually will require borrower to provide additional docs to support his/ her housing loan applications. There’s a high chances for the borrower loan to be rejected, because the only way bank study their clients is with the white document CCRIS CTOS. Else how would bank be confidence to finance you with cash to purchase property. =D
However, credit card is a double edge sword though, if the borrower isn’t discipline in his her usage, showing 100% utilization of card ( Rm10,000 CREDIT LIMIT, every months swipe up 10k max). Bank will look at this as a risky client that doesn’t have much cash flow and higher chances to default on housing loan. Even though borrower pay the credit card installment or minimum payment promptly every month.
My best advise for clean CCRIS borrower or any borrower there, apply for credit card and don’t utilized it more than 50%, keep it low, pay goods with cash, credit card mainly to build a clean great profile for the bank. With just a credit card in your profile, bank will approve your loan more favorably.
- Ccris will update credit card utilization every next month 10-15th.Meaning, October 1th-31th 2016 you have swiped RM10,000, next month November 10-15th 2016,
CCRIS will update the record based on October 1-31th utilization record. 1-9th November 2016 will still hold record of September 1-30th credit card usage.
Hence, if next month you intend to get housing loan, don’t swipe or utilized your credit card at all this month. When CCRIS update on 10-15th next month, apply with that clean unutilized record of credit card. It will greatly boost your credit scoring.
Any inquiries, do drop at comment section below 🙂