Credit Score Philippines

Credit score Philippines – what is it? Many Filipinos apply for online credits for numerous reasons — to get a car, or to buy a house — but are denied. Many people want to know what is credit score in the Philippines. A credit rating is an assessment of the financial reliability of a borrower. The score shows how great the chances of getting accepted for credit are. Consequently, numerous people want to know how to improve credit score Philippines.

The higher the rank, the better the borrower’s creditworthiness and the higher the chance of getting a loan on attractive terms. This data is based on his credit history and other personal data (e.g., age, marital status, etc.).

Having received a personal credit score, you will be able to check the credit history as lenders estimate it. To assess private people, points are used that establish the reliability of the payer. The principle of formation of bank scoring is similar to the principle of construction of the score. This article can help you find out their credit scores in the Philippines and how to increase credit score Philippines quickly.

Credit Score Philippines
Credit Score Philippines

Credit Score Philippines Rating Features

The technology of bank scoring formed the basis for assessing the solvency of a potential borrower, taking into account his loan history and other characteristics: income, possession of the property, and family composition. Credit Information Corporation introduced its system so that everyone can find out their creditworthiness and chances of obtaining a loan before contacting the bank.

Banks and lenders give information for building a credit history, which is stored by the Credit Information Corporation. The Credit Information Corporation determines every credit score based on the data that is predicated on record and provides a basic notion of the borrower’s trustworthiness, creditworthiness, and dedication. It is assessed in terms of criteria: the bigger the number of points, the more trustworthy the client is, and the more likely they are to be authorized for a loan.

To put it quite simply, loan history is a list of closed and existing loans and dates of delays in payments. A credit rating is an assessment of the borrower as a whole for the entire time of applying to banks. A good credit score Philippines can affect the interest on the loan: the bigger it is, the lower the claim can be.

How the Rating is Formed

The Credit Information Corporation forms the scoring score. Each bureau has its scoring system, but they are generally similar. These mechanisms are based on several indicators:

  • The duration of the story. The smaller it is, the higher the probability of the bank’s refusal. After all, if your history is almost clean, then the bank will not be able to understand how you will behave in the future, and you will not be trusted;
  • The number of requests to get history. The more of them, the lower the score. There is a possibility that the borrower too often applies to banks for a loan, and they also usually request a history. It raises suspicion;
  • Delays in loan payments. The rating can be lowered by a regular delay in paying a loan, even for one day;
  • The debt load also affects the final score of the number of existing loans.

What Does a Credit Score Affect?

If assessed objectively by itself, a credit score Philippines practically cannot influence anything. It is information for both you and the bank. With its help, you evaluate your chances before applying for a large loan, including a mortgage. It is a preliminary recommendation for a bank and an overall assessment of the borrower.

Before approving a loan, bank employees will carefully check your income level, ask for collateral, etc. The primary tool, in this case, is history. And the cleaner it is, the better for you. By the way, credit history can constantly be improved.

A good credit card score Philippines will help the borrower get a loan: a high score has a higher percentage of approval of loans, including large ones. Nevertheless, this does not mean that a borrower with a low level will undoubtedly receive a categorical refusal from the bank. A loan may be approved on less favorable terms and with bigger interest rates. Loan history and rating alter after each transaction with your loans. 

What will you see on a credit report?

The credit report allows you to see the following indicators:

  • Individual credit score Philippines. The creditworthiness is denoted by a number. The higher the credit score, the more probable you the person are to get credit;
  • Date about closed and credit obligations. In all financial institutions that are stored in the credit agency. Order a report and make sure that you do not have debts that you didn’t know about;
  • Who requested history. Companies may request a public part of the credit history only with consent to evaluate the client as a borrower, client, or future employee. A large number of inquiries lowers the credit score. If the customer didn’t give support to the organization that requested the story, he could sue.

How to Make Your Credit Score Better

Realizing that a nice credit rating can only be high, the borrower will conclude that it is necessary to work on increasing it and might be asking himself how can I improve my credit score in the Philippines. To do this, the client needs to know which entries in the loan history most affect the value of the rating.

Many are interested in how do you increase your credit score. A rating rises following the improvement of history. According to CitiBank, there are working methods, and they all agree that a person needs to pay credit obligations competently and on time:

  • Refinance several loans into one: this will reduce the credit burden, simplify the terms of the contract and help keep payments under control;
  • Use a credit card with a grace period. Spend the limit in small amounts for a quarter or a little more and return the money on time. The absence of delays will help to increase the rating;
  • If you want to know how to get good credit score Philippines, consider the use of a credit card. Demands for borrowers who take a credit card are usually softer than in the case of a full-fledged loan. Some people take advantage of this chance to get better loan history through the card. A credit card for bad credit score Philippines has a specific limit of borrowed funds that a person can spend on shopping in stores and paying for services. If you return the money on time, it will be shown in the credit history;
  • Lack of multiple open loans. To avoid debt, try not to take on new obligations until you pay off the old ones. Credits, active credit cards, and microloans are also considered. Try to keep records: for this, you can order a free credit report twice a year. After reducing the debt burden, the rating should increase.

A low rating is not a sentence or a lifelong denial of loans but a recommendation for banks. There are numerous ways how to clear your credit score Philippines. A loan might be accepted subject to several conditions. For instance, if you provide a deposit or a certificate of income. Keep in mind that by gradually improving a loan history, you can smarten up your rating. With this simple advice, you can figure out how much can I increase my credit score.

What Else Affects the Rating

Records of payments made are the most significant part of history, which shows the degree of good faith of the borrower. You can check whether the contribution was completed on time and entirely on them. If there was a delay — how big it is, how many days have passed since the last payment, whether any additions were made to the contract.

These entries directly affect the value of the score. If payments are made promptly and in full, they are shown in the history with a green icon. In this case, the borrower’s chances of getting a loan on more favorable terms increase. If the payment schedule is executed inaccurately, there are delays and payments in an incomplete amount — the color changes first to yellow, red, or even black, and the rating begins to decline.

To a lesser extent, other entries affect the rating, although they are also important:

  • Applications for new loans; the more of them in a limited period, the worse the score value;
  • Composition of creditors; if a borrower applies for loans to lending organizations, this is negatively perceived by many banks;
  • The score raises guarantees for another borrower if the loan is repaid in full following the payment schedule;
  • Application frequency; a large number of requests for a limited period (for instance, a month) also negatively affects the size of the rating. For a potential lender, this is a sure sign that a potential client is in dire need of money, and the risks of lending may be increased;
  • The zero activity of the borrower also does not contribute to the increase in the score. If a person has not taken loans for many years, their declines, and banks become more cautious in issuing new loans;
  • Bank rejection of a loan. If the bank refuses the borrower, it must record the basis for its decision in the information part of the credit history. It is beneficial for both the person who borrows and the next lender. Nevertheless, the record that the credit was not issued due to a discrepancy between the application and information known to the lender will not increase the chances of trying to get a loan elsewhere;
  • Court decisions on the enforcement of non-credit liabilities. Suppose any citizen did not comply with such a decision within ten days. In that case, he might have a corresponding entry in his credit history. And if there is no loan history, it will be formed.

But all approved loans and records of their successful repayment following the established terms invariably increase the rating and increase the chances of new, more profitable loans.

In the Philippines, How Can a Person Check Their Credit Score?

Once customers understand the notion of a credit score, it’s time to ask how to check credit score Philippines. There are straightforward answers to your problems if you’re wondering how to know your credit score Philippines. Clients in the Philippines can receive their loan score in one of two ways: in person by requesting a CIC credit report or online using the CIBIApp web application.

Requesting a duplicate of the CIC credit history to know the credit score Philippines, according to the FinScore, is an easy process that involves just a few steps:

  • To begin, go to the website and choose Services.
  • The checkbox Get a CIC credit score Philippines sample must be selected next.
  • It is critical to read the contract before clicking the “I accept” button.
  • After that, the customer can schedule an appointment.
  • The customer must fill out the relevant personal information on the next page.
  • The application form may then be downloaded and printed.

Finally, the customer must visit the CIC office in Legazpi Village, Makati City, Philippines, to obtain a credit report and verify their credit score. These simple steps can help you find out how to check credit score Philippines online.

Areas of Application of Credit Scores

Even though the credit score Philippines Citibank was created initially to help banks lend to borrowers, this tool turned out to be so versatile that a variety of organizations are ready to use it in need of a prompt assessment of the integrity of citizens.

Insurers were among the first to appreciate the convenience of credit scores. With compulsory insurance, a good score can significantly reduce the payment to the client.

Representatives of industries where regular new payments should be made, such as housing and communal services management companies, are also interested. Including scores in the system will also save money for conscientious borrowers.

Another big area where credit scores can come in handy is headhunting. Each employer in the Philippines spends a lot of effort and money to find new employees. With the new tool, the task is greatly facilitated. Such a turn, by the way, will make those borrowers think that they do not need a rating and neglect the need to repay loans promptly.

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Linda Carters/ author of the article

Financial Journalist on Advance Loans Philippines with 8 years experience in a Fintech niche.

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