So score depends on a lot of variables and information. Each Credit Agencies – CTOS, RAMCI, CBM has engaged 3 different Score Model Companies – FICO, Experion, Transunion to help them analyse our bureau data and try to come up with a generic bureau score. Generic means it is not meant for specific purposes. This is also part of BNM initiative and project to introduce bureau score to the general consumer.
We are still quite infant unlike many more matured countries already having a bureau score and uses it as part of their application assessments. Example – US, Singapore, HK.
So previously, banks used to connect direct to BNM CCRIS to extract CCRIS information of an applicant. Now these 3 credit agencies are trying to sell to the banks their services, i.e. extract CCRIS through them and have scores on-top of the CCRIS information. As far as I know, no banks are using them yet for bureau score; but most banks will be exploring to see how they can use the scores.
[COLOR=blue]AMBANK started to look at using RAMCI[/COLOR]
So it is a misconception here stating that if score is high means applications will be approved. Although conceptually that is the case; but bear in mind each banks has their own underwriting policies and criteria. And most have their own score model for specific purposes. That is also why I highlighted earlier the bureau scores developed now by the agencies are generic scores.
Specific score models are used to assess different type of loan facilities. We all know ppl applying for housing loans, vs personal loans vs hire purchase vs credit cards carries different risk. So thats why we will always see complains like “why they approve me this facility but they do not approve me that loan” etc… Because one may qualify for a credit card does not mean one qualifies for a personal loan because of the different risk assessment.
Therefore even with this generic bureau score, banks will still use it just as an overlay towards their current underwriting criteria. Most likely those that they previously rejects, now they will look at the bureau score to determine whether or not they can approve. Or probably build in other assessment criteria.
From my view, I think most banks will only fully utilize the bureau scores by next year. But again remember 3 companies engaged 3 different score model companies; and doesn’t mean each which gives equal score or rating.
If interested, you can do a research on FICO Score, Experion Score and Transunion Score. Then you will see US is more geared towards FICO, Transunion more prominent in Asia since they help a lot of countries set up credit credit bureau. Experion is also quite famous in the Asia market.
So to me, no point wasting money to buy “credit report” from these companies yet as one can go pull their CCRIS information from BNM for free. Unless one is not comfortable with their own CCRIS record and wants to know what are the chances bank will approve the loans.
But common sense dictates common things to look out in CCRIS is of course the payment history, how much personal loans or cards, what is the utilization on cards, what is the total debts (DSR). Imagine you are the one lending money, you will obviously look at those item also. So it is another misconception to say just because CCRIS shows 0 0 0 0 0 in the payment history means the guys is good and loans should be approved. But if the guy have many cards and all more than 70% of the utilization, would you want to borrow the guy if you are the one lending the money. I know I will not as this is high risk. Or if you see the guys have many personal loans, would you want to lend to him? A lot of things are just common sense. This gets more complicated depending on whether the applicant is a salaried person or a self-employed person and which job industry; age groups etc.. That’s why specific scores are developed to assess all these as opposed to bureau score which is generic only looking at CCRIS information.