What Is The Money Lender Credit Bureau?
November 11, 2022
Do you know that borrowers in Singapore can access loans up to six times their monthly income from licensed money lenders?
But who or what determines your capacity to borrow?
The short answer is the Moneylenders Credit Bureau (MLCB), which generates MLCB credit reports of borrowers. The information in your MLCB report determines your borrowing eligibility with money lenders.
Read this article to understand what is money lender credit bureau, its functions and how it affects borrowers in Singapore.
What Is The MLCB?
The Moneylenders Credit Bureau is a central depository of borrowers’ data, repayment records, loan defaults, and credit scores with licensed money lenders.
It allows licensed money lenders to determine a borrower’s creditworthiness and prevents a borrower from borrowing beyond their limit.
A licensed money lender can check a borrower’s credit report from the MLCB before approving a loan to check a borrower’s capacity to repay.
Borrowers can purchase their credit reports from the MLCB to manage their finances, credit score, and capacity to borrow.
However, the MLCB does not contain information about the borrower’s loans and repayments to the bank.
What Is Included In A Loan Information Report?
A money lender submits information about their borrowers to the MLCB, and a loan information report is generated based on that data.
A loan information report is a record of your history with various licensed money lenders.
It includes the following:
The loan information report includes your full name, address, date of birth, and NRIC number.
Your employment data includes your place of employment, monthly income, and CPF details.
Loan Records And Credit Score
This section contains all your previous loan records, loan defaults, and active loans with licensed money lenders.
It has all the information about the loan tenures, collateral, principal amounts, interest rates, dues, late fees, and the number of loan repayments you have.
Your loan records determine your credit rating. A borrower with a timely loan repayment history without defaults is likely to have a good credit score.
Credit scores range from 1,000 to 2,000. A higher score close to 2,000 indicates a low risk of defaulting.
You can improve your credit score, and access fast and easy cash loans with Credit Thirty3.
- Exclusion Records
Borrowers can register themselves in the self-exclusion list to be excluded from accessing unsecured loans from licensed money lenders, except for debt-consolidation loans.
Unsecured loans come at a higher interest rate and can strain individuals with low credit ratings financially. This might create a debt trap for the borrower.
- Civil Judgments
These are judgments filed against you by money lenders seeking repayment of overdue loans. Licensed money lenders can ask the court to pass a judgment when borrowers fail to repay the money.
Any civil judgment against you concerning loan repayment from money lenders can affect your MLCB report negatively.
Filing for bankruptcy is an option for those who cannot repay their loans due to their financial conditions. These borrowers are generally overwhelmed with debt.
The court allows such individuals to consolidate their debts to repay the loan amount and asks money lenders not to increase the interest in that period.
However, bankruptcy records stay on your MLCB report for 10 years, and drastically affect your MLCB report and credit score.
So as far as possible, borrowers should avoid filing for bankruptcy and explore alternative options suggested by the Ministry of Law here.
How Often Is MLCB Data Updated?
MLCB’s data of borrowers is updated regularly by licensed money lenders and the MLCB.
Before approving a loan, a licensed money lender collects your information and submits it to the MLCB.
Licensed money lenders can also access borrowers’ credit reports to check their past loan records and assess their creditworthiness before approving a loan.
Once the loan is approved, licensed money lenders have to update your loan status frequently in the MLCB database whenever you make the repayment until your loan is repaid.
Borrower information uploaded by money lenders is stored in the MLCB repository and is used to generate the MLCB reports.
Who Can Access The MLCB Report?
A MLCB report contains information about a borrower’s existing loans with licensed money lenders.
It can be accessed by:
- The Registry of Moneylenders
- The Ministry of Law
- Licensed Money lenders
Licensed money lenders can use the report to evaluate a borrower’s credit rating before granting a loan.
Borrowers can purchase the reports to check their credit records and existing loans with money lenders to assess their capacity to repay loans.
The Registry of Moneylenders and the Ministry of Law store MLCB data on their servers and assess them to manage borrowing and lending activities, as well as loan discrepancies between borrowers and money lenders.
How Can You Improve Your Credit Record?
Your credit report reflects your financial status and ability to repay loans. A good credit report means you are less likely to default on a loan.
With a good credit report, you are more likely to get loans from licensed money lenders.
Here are a few steps that you can follow to improve your credit report:
- Repay all your loans with money lenders on time, and avoid late fees or repayment charges.
- Do not apply for too many loans and credit facilities one after another because it can create a debt trap and affect your credit.
- Never default on any of your loans or file for bankruptcy.
- Avoid making multiple loan enquiries in a short time span because it shows you are desperately seeking more loans without clearing your outstanding debts first.
- If you have taken multiple loans and are struggling to repay them, consider debt consolidation. This strategy allows you to merge all your loans into one loan with a single institution to protect your credit rating from worsening.
Get in touch with Credit Thirty3 for financial assistance and advice on how to improve your credit record.
When To Check The MLCB Credit Report
It’s wise to access your credit report at least once a year to check for discrepancies in your credit score and prevent identity theft.
Purchase your credit report from the MLCB before applying for loans with money lenders to calculate the risks involved in loan repayment.
Otherwise, check your credit report every two to three months if you have an active loan with a money lender to manage your loans better and track your credit rating.
This helps you to avoid borrowing beyond your limit and maintain a positive credit rating.
How Does The MLCB Report Affect You As A Borrower?
A MLCB credit report helps borrowers to keep track of loans from multiple money lenders. It also enables money lenders to identify borrowers who are likely to default and reject such loan applications.
As a borrower, you can access your MLCB report whenever you want. It does not affect your credit report in any way.
This is because your MLCB report is not a loan enquiry. Thus, it won’t affect your credit ratings.
In fact, the MLCB encourages borrowers to purchase their credit reports to manage their loan activities and finances better.
How To Get A Copy Of The Loan Information Report
You can purchase their loan information report from the MLCB website by providing your NRIC number and personal details.
You can also visit the MLCB office or Credit Counselling Singapore to buy the credit report offline. You have to pay a minimal charge of $1 for the credit report.
If you find any anomalies in your credit report, contact the MLCB and your money lender and file a complaint.
If a money lender has reported incorrect information, it might result in a negative rating and affect your chances of loan approval.
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A MLCB Report Is Useful For All
Now that you know what is money lender credit bureau, you can see its obvious benefits.
The MLCB has helped to encourage responsible borrowing and lending borrowers and licensed money lenders respectively.
Borrowers can now calculate their borrowing ability before taking loans, and money lenders can avoid approving loans to those likely to default.