April 17, 2013


This is an excerpt from my next book. The book's working title is 40 Questions You Should Ask Your Lawyer Before Taking A Housing Loan in Malaysia, another book under Ask The Lawyer series. I am targeting for it to come out next year, 2014. Do get my new book 40 More Questions You Should Ask Your Lawyer Before Buying a Residential Property in Malaysia here. Any questions, comments and inquiries are welcomed.

CCRIS and CTOS are credit reporting agency, a newly-governed industry in Malaysia. People applying for housing loans in Malaysia will have their financial information checked by the financial institutions they are applying the housing loan to. Here is excerpts for one of the question in my book under the title above :

Central Credit Reference Information System (CCRIS) is an online credit checking system operated by Bank Negara Malaysia with all Malaysian’s resident’s credit information in the system. As long as that person has an identification card and credit history, he can check his credit history in CCRIS. CCRIS is managed by the Credit Bureau of the Bank Negara Malaysia since 1982 and formed under the Central Bank of Malaysia Act 1958. The Credit Bureau collects the credit information of any borrower from all financial institutions in Malaysia and then issue a credit report when it is requested by any of the financial institutions governed by Bank Negara Malaysia. Central Credit Reference Information System is a computerised database and there is nearly more than nine millions borrowers’ credit information currently being stored by Central Credit Reference Information System. All the information about the function of Credit Bureau and Central Credit Reference Information System, can be found in the Bank Negara website on Credit Bureau : http://creditbureau.bnm.gov.my.

The financial institutions are required to report the name, identification number, address and credit facility details such as type of credit facilities, credit limit, outstanding balance, conduct of account and any legal action status. A borrower can check your Central Credit Reference Information System report at Bank Negara or Bank Negara’s various branches in Malaysia. A borrower cannot ask a representative to check his own Central Credit Reference Information System report. Under the various banking laws including Banking and Financial Institutions Act 1989, Islamic Banking Act 1983 and Central Bank of Malaysia Act 1958, confidentiality is imperative in dealing with Central Credit Reference Information System report. It can only be released with a financial institution authorised by an applicant for a housing loan or any other loans to get the Central Credit Reference Information System report from the credit bureau. Upon getting the Central Credit Reference Information System report, the financial institution and its officer can only use it to process the loan and not use it for anything else such as marketing its products

Financial institutions giving housing loans or any other loans to borrowers in Malaysia need up-to-date information about the applicants of the loans. Central Credit Reference Information System is where these financial institutions go in order to get the credit history of the borrower. The Credit Bureau sourced the information from all licensed commercial banks, Islamic banks, investment banks and several other financial institutions. In order to ensure the borrower’s data is up-to-date, verifications are done against the data at the National Registration Department and Companies Commission of Malaysia. Here are the list of information listed in the Central Credit Reference Information System report :-
1.       Outstanding credit including housing loan, hire purchase, credit card, overdraft and personal loan;
2.       Special attention account under close supervision by any financial institution; and
3.       Application for credit
All these three types of information will be for anything under the applicant’s own name, joint name with another person, sole proprietorship, a partnership or a professional body.

Any account fully settled or application rejected, deleted or cancelled are not included in the report. Credit repayment behaviors are listed at the end of the report for outstanding credit report or special attention credit report with 1, 2 or 3 or more stated according to the month in a year for the last twelve months. These can affect certain loan application, including housing loan. Any financial institution processing an application from an applicant of a housing loan will give special attention to any account with late or missed monthly installment payments, high debt servicing ratio between the borrower’s take home income and the debt the borrower already have, high utilisation of approved credit such as credit card, too many loan applications and any loan under litigation or special attention account. Unless it can be disputed, it is good for a borrower to clear some of the debts before applying for a housing loan.

Any borrower can dispute your credit report in Central Credit Reference Information System by first going to the bank which has entered the wrong information and then at any of the Bank Negara branch. Any financial institution supplying the inaccurate report must rectify any inaccurate or incomplete information immediately by sending it to the Credit Bureau. The financial institution is obligated to reflect the latest credit position of the borrower. A data review by the Credit Bureau can be done if the borrower is not satisfied with financial institution. The borrower can get and filled the Request for Data Review form to do a data review. It can be downloaded from the Credit Bureau website and then submitted to any Bank Negara Malaysia’s branches.

Credit Tip Off Service (CTOS) is a different form of credit report used by some financial institutions in Malaysia. Credit Tip Off Service is not related to Bank Negara Malaysia or any government agency and it is not endorsed by any of them. Credit Tip Off Service is run by CTOS Data Systems Sdn Bhd, a private company, better known as CTOS Sdn Bhd. The website for CTOS Sdn Bhd is http://www.ctos.com.my/ with its office in Megan Avenue 1, Jalan Tun Razak, Kuala Lumpur. CTOS Sdn Bhd collects data made public in news, court filings of legal proceedings allowed to be made public by the court, Companies Commission of Malaysia, information provided by the borrower and any of the borrower’s creditors, people or companies the borrowers registered with such as clubs, memberships and even include utilities companies. CTOS Sdn Bhd also collects a person’s directorship in companies either listed or not and all his sole proprietorship or partnership holdings. CTOS Sdn Bhd is registered under Credit Reporting Agencies Act 2010 and governed by the Securities Commission of Malaysia. Any refusal by CTOS Sdn Bhd to update its record can now be reported.

A few people claimed Credit Tip Off Service is an illegal gathering of information by a private company and is a blacklist. There a few evidence of this as CTOS Sdn Bhd is a company gathering information made public relating to credits and liabilities. CTOS is a lead information system with clients that need to check a particular person or company’s background, especially financials, in their normal course of business such as bankers, legal firm, insurance company and credit card companies. CTOS Sdn Bhd does not update their database or delete a settlement on any of the borrower’s case automatically unless the borrower or the person being checked informs CTOS Sdn Bhd of such matter. CTOS Sdn Bhd also claims it is not a blacklist report. Having a credit report under CTOS Sdn Bhd does not mean an applicant of a housing loan will not get approved. Applicants may receive a rejection from the bank the borrower is applying for a housing loan with the word ‘CTOS issue’ and the best course it to get in touch with CTOS Sdn Bhd to know what is the issue if the bank is unwilling to divulge the information. Getting credit especially a housing loan from a financial institution is still about the borrower proving himself to be credit worthy. Any data from CTOS Sdn Bhd is a public record and a borrower can get this record at his disposal too. A settled court case or a bankruptcy already being settled will have proofs and the borrower can update the financial institution the borrower is applying the housing loan with the proof.

The difference between Central Credit Reference Information System report and Credit Tip Off Service report is the weight given to each report. Most financial institutions give more weight by rejecting a housing loan application when they found the applicant has a ‘CTOS issue’. Central Credit Reference Information System is run by Credit Bureau under Bank Negara Malaysia, with banking laws to back the collection of information. Credit Tip Off Service is not imposed on financial institution as it is not run by any government agency but is supervised by Securities Commision. Other than these two agencies, there are several other credit reporting agencies such as Financial Information Service Sdn Bhd (FIS) and SME Credit Bureau Sdn Bhd. The unscrupulous use of a borrower’s or an individual’s information, especially financial information by any agency under Credit Reporting Act 2010 shall be reported to Securities Commission. With the coming of the Personal Data Protection Act 2010, the usage of personal data on individuals by financial institutions are now under another layer of scrutiny including disallowing the financial institutions’ credit department to divulge an applicant’s or a borrower’s data to its marketing department unless expressly allowed by person.
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