Yes, bank checks your credit rating by tracking your commitment/financial conditions. They are things like car loans and credit cards (which they easily can have access to), EPF statement, income tax.... These are the things that help you with your housing loan eventually. I have friend who can't get car loan or cc even when he has a lot of cash in his account.

This post has been edited by DirectorLee: Oct 13 2014, 03:59 PM

What type of "bargaining power" that the joker said? You can buy a subsale house that original price was rm300k but just a flip and selling for rm600k and yet you still can get 100%?
Credit rating no need to be recorded by credit card. By your bank account, EPF account also can tell how good you are. I already 2 years never take loan and yet I still can get it approved within few days.

2 years never take loan already means previously you took loan before. OUr friend above is fresh and i assume that he have never have any sort of loan with any banks at all thus zero credit record. bank cannot assess this person's reliability in repaying outstanding amount. That's why the guru adviced our friend here to get a cc to have a credit rating. afaik, get the cc but never use it also fine. still show credit rating. This one i don't know why though. any guru can enlighten me?

I won't say that is a guru, more like a drug dealer pushing some drugs.

The speaker wasn't a representative from the banks, so on the surface it doesn't seem like he had anything to gain from people signing up for cards. His reasoning was the same as what zenwell said; from a bank's point of view, someone with no history of bill payments is harder to trust than someone with a good history of bill payments. Curious to know what else you have to say about this.

And thanks to everyone for the replies so far. They've been helpful

This post has been edited by Prodigenous Zee: Oct 14 2014, 12:42 PM

Aren't we all the same? We have nothing to gain too... all just wanting to sound intelligent and smart.

So how much history we can rake up with credit cards, except to spend, and spend much more than the regular swipes at Tesco and Petronas? When we want to be financially prudence and use the CC like a debit card?

Read that link in the above post on the 5 things bankers look for. Credit history is the last item. The top 2 are foremost important: Valuation and DSR (Debt Service Ratio).

Valuation: The bank will be holding the property as collateral. So they will want to have as much collateral in case of loan default.

DSR: This shows how much you can pay monthly, and items 3 and 4 lend support to what you claimed you can pay. The bank don't want you to default... taking over the pledged property and lelong it would be too much work when they are in the business of giving loans and collecting principal plus interest.

My mother never take a single housing loan from she start work till 56 years old. Her income only rm2000-3000, but yet she is still getting her rm70000 for 15 years loan approved. As it is below rm100k, the interest rate are higher, from OCBC.
As said, bank won't really bother much on with clean record or not as that is just a small factor, bigger factor is your job nature and your EA/EPF.
That joker sure work for someone, if not bank then either can be property agent or any so-call financial expert that are here to mislead people on simply investing something.
BTW, once you have credit card already, you may not able to do what you are doing now. As you tends to spend more.

This post has been edited by supersound: Oct 14 2014, 01:20 PM

Going to purchase a RM405k house soon. I hope this won't kill me

Own self do the maths, very simple. Make sure you have rm1000 that can be saved in FD. So, net income - rm1000, balance of the money only can use 30% to serve a loan.
Also, have to consider BLR at 10%'s impact.

Not until you clear off your credit card debts, and that is given that you don't put yourself into another pile of debts.

Taking a 350,000 thousands loan and your repayment amount is around 1.6k per month? Do the math properly or I shall wait for your house to be listed on the auction list.

[quote=supersound,Oct 13 2014, 05:56 PM]
I won't say that is a guru, more like a drug dealer pushing some drugs.


Actually his advice is right, get a credit card to show some repayment behaviour/record for the bank before you commit to a larger loan.

Basically, once you got a credit card, your ccris record will have your credit card limit amd usage and repayment behavior.

if one would delay his card payment, eg got 2 or 3 appearing, chances of getting his loan for mortgages or car will be tough.

however, if a person does not have any ccris record, it does not mean that you won't be able to get loan. You will still be able to get, however, your record might not allow you to huge commitment or a better margin or a better rate.

Different bank got different criteria. Example of one of my previous client, although working in a listed company, at age 28, without any ccris record, hong leong bank approve a margin of 80% instead of 90% for his financing.

it is good to have credit card. Credit card doesn't mean many debts, it is ur own hand that determine whether you want to simply use or not and create unnecessary debts.

For fresh graduate working in MNC or listed company, your loan application might have a better chance, you cannuse apply loan using 3 mth payslip.

however, for small timer unknown sdn bhd or enterprise, you will need to provide payslip, bank statement, epf, ea form, income tax for a better chances of approval

[quote=Bonescythe,Oct 25 2014, 10:19 AM]
[quote=supersound,Oct 13 2014, 05:56 PM]
I won't say that is a guru, more like a drug dealer pushing some drugs.


Actually his advice is right, get a credit card to show some repayment behaviour/record for the bank before you commit to a larger loan.

Basically, once you got a credit card, your ccris record will have your credit card limit amd usage and repayment behavior.

if one would delay his card payment, eg got 2 or 3 appearing, chances of getting his loan for mortgages or car will be tough.

however, if a person does not have any ccris record, it does not mean that you won't be able to get loan. You will still be able to get, however, your record might not allow you to huge commitment or a better margin or a better rate.

Different bank got different criteria. Example of one of my previous client, although working in a listed company, at age 28, without any ccris record, hong leong bank approve a margin of 80% instead of 90% for his financing.

it is good to have credit card. Credit card doesn't mean many debts, it is ur own hand that determine whether you want to simply use or not and create unnecessary debts.

For fresh graduate working in MNC or listed company, your loan application might have a better chance, you cannuse apply loan using 3 mth payslip.

however, for small timer unknown sdn bhd or enterprise, you will need to provide payslip, bank statement, epf, ea form, income tax for a better chances of approval

[/quote]
Let's see, I want to take a rm1M loan but my annual income only rm75000, I have very good credit card payment. Can I still able to get rm1M loan?

Your question cannot be answered accurately because of inadequate information.

But based on Annual income of RM75k, nett pay almost around 65k, which means a monthly nett pay of RM 5.6k.

At RM 5.6k nett a month, say a DSR of 70%, that's a balance of RM 3.9k for your bank/financial installment to cater for your
- Car loan
- Mortgage
- P/L
- Credit Card

Based on a loan of RM 1million, interest rate of 4.4%, a 35 years tenure, monthly repayment is RM 4670 a month. So this case, no need to think much about it although you have a good payment record, because your income also doesn't allow you to commit to such thing. If your age is older, like 50 years old, the tenure will be slash further, putting a higher commitment.


Exception case is unless you got
- A huge sum of cash in your bank, say 500k, put to FD and pledge to the bank, lock for 35 years.
- Take in a joint borrower which had a strong income, at least can commit another extra RM3000 a month
- Or don't opt for 1m loan, opt for a lower margin.

I just want to point out that having good credit card payment means nothing, own annual income, total savings are more important
With rm75k of annual income, after deducting everything(income tax, EPF, SOCSO), net will be only rm60000 the most.
Before serving any loan, daily expenses and sudden death spending also need to consider first, so balance will be at rm2500 or even lesser if work in KL. Can still simply take loan?

you are correct on your behalf thou even with a high annual income and high total savings, if your credit card repayments showing outstanding payment it would weaken your credit rating. All in all, in order to get the loan approval, you will have to prove to the bank that you are well equipped such as enough fixed income to carry out the repayments, good repayment history, not bankruptcy and most importantly u must have the sufficient fund for the downpayments.

Without a credit card, best method is from the saving's amount
But again there's no right or wrong on this, is matter how the bloody officer rates it.

No one here is saying that having a good credit rating will instantly get you amazing and godly loans. You seem to be under the impression that what we think credit rating is everything. That is not the case at all. What we're simply trying to say that having a good credit rating is a bonus on top of your annual income and savings. It is not the first thing a bank officer will look for. We are not saying that the bank will reject your loan due to bad credit rating even if you have enough money in savings and good income.

Do you have something personal against credit cards?

hi all sifus, if i were to apply for personal loan , say 5k on 2 years tenure, which bank has got the best interest to offer other than rhb?
http://www.rhb.com.my/easy/easy_pinjaman_ekspres.html

If you know how to use it and pay on time, it can make money for us. But if don't know how to use it, it will be poison for some, especially youngsters.
Most people are collecting their debt during 20's as this age group mostly will enjoy luxury life style first.

16% of interest, good luck to you.