Getting A Clean Credit Report

Source: Bernama

Ever wondered how banks evaluate whether a person is credit-worthy or not without the person revealing any credit information about him or her?
Or have you ever wondered how much information the bank has on a person's credit pattern?

The answer lies with the Credit Bureau and its database known as the Central Credit Reference Information System (CCRIS), which serves as a reference point for the banks. The Association of Chartered Certified Accountants (ACCA) explains at great length the workings of the Credit Bureau and CCRIS. Managed by Bank Negara Malaysia, the Credit Bureau was formed under the Central Bank of Malaysia Act 1958 and has been in operation since 1982.

Since then it has accumulated credit information of over five million borrowers in Malaysia. The information is obtained from more than 50 financial institutions, including commercial banks, Islamic banks, finance companies, merchant banks and other financial institutions and stored in the CCRIS. Apart from being the reference point for financial institutions to make faster and informed decisions on each potential borrower, the Credit Bureau is actually part of BNM's strategy to promote best practices in credit risk management among financial institutions.


UNDERSTANDING CCRIS

Whenever a person borrows money from a financial institution or holds a credit card, the information will be relayed to the CCRIS. The details, among others, include personal particulars such as name, identity card number and address, and details of credit account such as the type of credit facility, credit limit, outstanding balance, conduct of account and status of legal action, if any.To verify against the personal particulars, a cross reference is made with the National Registration Department and the Companies Commission of Malaysia.The information stored in CCRIS will then be made available to financial institutions upon request.Since many borrow money from financial institutions in one way or another, this may make a person wonder whether the personal details are secure and will only be used for the purpose of evaluating the person's credit application or reviewing credit status.


THE SECURITY ISSUES

The credit information provided by the Credit Bureau to any financial institution is classified as secret.The financial institutions are required to observe the provision of banking secrecy under the Banking and Financial Institutions Act, 1989 (BAFIA) and the Islamic Banking Act, 1983 (IBA). The information is strictly for credit evaluation purposes only and the financial institutions are not allowed to divulge them to any other parties except in the course of court proceedings between the person and the financial institution or when it is authorized under any Federal law to be revealed to the police. Thus, it can be rest assured that the information will not be used for unsolicited marketing or product promotion. In addition to laws, the CCRIS records all requests for the credit report in detail.For instance, the CCRIS records the details of the bank requesting for the information, the officer making the request and the time of access. By doing this, the Credit Bureau and the internal auditors of the respective financial institutions can track down who has sought information on any particular borrower.


ACCESSING THE CREDIT INFORMATION

The information in CCRIS is not the privilege of financial institutions only. The borrowers too have the right to obtain the information as well. And this has been made possible since 2002 following a change in the law initiated by BNM. To obtain a credit report, one has to fill up a Credit Report Request form available at the Credit Bureau office or can be downloaded from its website at http://creditbureau.bnm.gov.my. The completed form need to be submitted together with a copy of identity card and two other supporting documents such as driving licence or utility bills for verification. It normally takes a month for the Credit Bureau to process any such request. Upon obtaining the credit report, any discrepancies in the information can be rectified by filling up a Request for Data Review form. Each discrepancy has to be listed clearly and the request for change must be supported with facts. The Credit Bureau will then investigate and notify the financial institution concerned.

If the financial institution finds that the disputed information has been inaccurately relayed to the Credit Bureau, it must make amendment and send it back to the Credit Bureau. The Credit Bureau only provides factual information on a person's credit history without passing judgment on the person's credit worthiness. It's totally up to the respective financial institution to decide whether to approve the loan application or not. Thus, if one bank rejects the loan application, it does not mean that the other banks will follow suit because each bank has its own credit evaluation system.

The banks, nonetheless, will make decisions based on the credit report that sometimes can adversely affect a person's application especially if it's tainted with poor payment records like late payment or worst, non-payment of loans. If a person's credit report falls in this undesired category, the person should contact the financial institution and discuss the possibility of rescheduling the payments. Once the account is regularized, it will reflect an improved position and improve the chances of securing the much-needed loan. Meanwhile, there is another source of credit information available in the market commonly used by financial institutions. It is widely known as CTOS.

Unlike CCRIS, CTOS collects data from publications or advertisements or based upon searches normally deemed reliable. Thus, the data accumulated by CTOS may not be up to date or exhaustive like the one collected by CCRIS but the financial institutions still refer to them in evaluating credit worthiness of any potential borrower.

Financial Books

Last Saturday weeks, I have been book shopping with lots of Financial ad Self Help books in the shopping list. I have been looking around in the net such as BicaraJutawan.com and Personal Money magazine to find a good books to read.

The book that make us buy all this genre of books is Rich Dad Poor Dad by Robert T. Kiyosaki.

I think all people in the world of investing, tax planning, real estate and business know who is this guy. The book is really interesting and is easy to read as he tells the reader on he he learn to make money from his rich dad. He receive advice from both of his dad. The rich dad is his best friend's father and the poor dad is his own father. This books tell you the mindset to become a rich person by comparing the advice given by both dad.

The other books that we purchased in this Rich Dad series are Cashflow Quadrant ad Retire Rich Retire Young.

I really recommend you all to read these book as it will educate you to think like a rich person and finally you will become one.

Financial Planning in General

Financial Planning is all about planning your finance. It is all about money from the money you earn and the money you spent. Generally, financial planning involves taking a broad view on personal financial status covering many areas of wealth management, and then going a step-by-step process to solve financial problems and achieve financial goals.

Below is the element of financial planning:

1. Cashflow management:
• Know your current net worth. Generally your asset minus your liabilities.
• Eliminating bad debts.
• Frequently save some of the money you own.
• Budgeting
2. Investment Planning
• Consider where to put your saving. Better place your saving where the money retur or the dividend is high, for bumiputera, ASB is oe of the bes choice around
3. Insurance Planning
• Ensure all your asset and family are well protected with suitable insurance.
4. Tax Planning
• This involves strategies to make the most of your income, stocks, real estate, property under the local tax regime.
5. Retirement Planning
• Surely you want to retire rich and not retire poor. You also don't want to work if your age is 6o++. This is important aspect of financial planning and somehow many people did not think for the future.
6. Estate Planning
• An estate planning or a will can provide financial security for your family, ensure your property is preserved and passed to beneficiary and avoid disrepute. For muslim, you can hire a will planner so the Will is in accordance syara'.
  

Reminder to Shah Alam Community

Assalamualaikum wbr and Good Day!

Do you know that if you fail to pay the summons from Majlis Bandaraya Shah Alam, your name will be listed in the Credit Tip Off Service (CTOS)??? So folks, if you have received this summons from this council, please act accordingly, pay before the due date or else you'll be facing problem for your loan application in future.

Do you know what is CTOS? Where to check? Who to refer to? You can get more information from their website www.ctos.com.my

Adios.....
Zul B M
zul_hami@yahoo.com

Al Rajhi Charge Card-i

Assalamualaikum wbr and Good Day!

Almost all banks in the country have Master Card or Visa credit cards. Some offer life membership and some offer 3 years free membership and discounted rates for the following years. Even some bank is offering a gift to give away upon approval. Yes, there are many ways how these banks promote their product and sometime we could not resist declining the offer. And it is not surprising that some Malaysian have more than three credit cards! We sometimes fail to identify which credit card give better facilities and whether they have hidden agenda which sometime the marketing people would not tell us.

What I’m trying to tell here is about a new product available in the market which a bit different from the credit card but has the same function. This is a charge card from Al Rajhi Bank. Some people fail to differentiate between credit card and a charge card. The main different is the credit card can be paid 5% from the total usage whereas the charge card, you have to pay in full the total amount due as stated in the monthly statement.

An Al Rajhi Charge Card-I offers you all the convenience of a card with none of the pitfalls of credit. And it provides peace-of-mind in knowing that all Al Rajhi Bank’s product protects you under the principles enshrined in the Syariah.

The Al Rajhi Charge Card-I is a way to pay for things online, over the phone and at millions of Visa accepted locations worldwide. And because there is no interest charge, you avoid the compounding effect on your outstanding balance.

Al Rajhi Charge Card-I offers:

• Up to 55 days of cost free funds.

• 24 hour ATM access at Al Rajhi Bank ATMs and ATMs displaying Visa PLUS signs.

• Acceptance at millions of Visa outlets worldwide

• A visa Wave feature for faster, secure and contact less transactions

• Monthly statement to track your spending

• Internationally Syariah compliant.

• You can withdraw 50% from your credit limit for cash advance. The RM10 for every withdrawal for domestic (Al Rajhi Bank ATMs outlet) or the amount charged by the correspondence banks.

There will be no late payment penalty as you have to pay the total amount dues.

You will be 55 days interest free. How does it work? Let say, you have made a RM 3,000 transaction from 1^st April to 30^th April for the cash advance and retail transaction using your charge card. The statement date will reach you by early May and the RM 3,000 is due on the 26 May 2007, which gave you 26 days from the statement date (in this case the statement date is 1^st May) to pay the full amount. Failing which, the usage of the charge card will be interrupted and you have another 29 days to pay in full the RM 3000. The 1^st 26 days plus 29 days period is the total 55 days interest free which you won’t be charged for any late payment.

Beyond the 55 days, the bank will take legal action against you for failing to pay the total amount due and whatever amount incurred for getting back their monies. So, to avoid interruption in your card usage, please make a payment in full before the due date.

Requirement:-

• Open to Malaysians aged 21 and above

• Minimum monthly income of RM1,500

• A copy of NRIC or Military ID or Police ID, and the latest 2 months pay slip, and Bank Statement and EA Form.

You can download the application form from their website at www.alrajhibank.com.my

It is good for a Muslim as this card is prohibited for any unlawful activities or those contravening to the Shariah principles including but not limited to illegal online banking, betting or gambling!!

I hope this write up will help you to understand some of the important information on terms and condition of the Al Rajhi Charge Card-i.

Thanks,

Zul B M

zul_hami@yahoo.com

Intro

Assalamualaikum wbr and Good Day,

Well, when we talk about financial product available in the market, we tend to find the best product offered by the commercial banks. We found out there are a lot of offers from housing to personal loans and not to forget the credit cards. In my honest opinion, these are the loans everybody is looking for to cope up with our financial situation in supporting our needs to have a better life.

Without the knowledge about the terms and conditions of each loans, we are confuse which is the best product to choose and we are easy to be influenced by the wrong explanation and advice from the marketing agents/sales executive from the commercial banks. Every and each agents will say that their product is the best in the market. Their lowest rate, their longest tenure and other facilities which sometimes could influence us to choose the wrong products beyond our needs.

So what should we do? Who should we refer to? The best person to refer to is the independent financial planner which he/she does not refer to only one product from only a bank or he/she does not represent from any of the commercial banks or insurance company. AND the most important thing is he or she is the Certified Financial Planner (CFP) from Suruhanjaya Sekuriti or Security Commissioner of Malaysia AND a member of Financial Planning Association Malaysia (FPAM). You can find a lot of useful hints and infos available once you browse to www.sc.com.my

I'm a not a Certified Financial Planner but I have my personal financial planner to advice me to manage my financial planning. To know more about the financial planning, feel free to get some useful infos from my website www.asasteguh.com

Thank you

Zul B M