Can Your Credit Report Affect Your Loan?

The importance of maintaining a healthy credit score often eludes young professionals who have just joined the workforce – important they will come to realise the hard way when their application for a personal, car or home loan is rejected.

For those who have been rejected by financial institutions when applying for a loan, the reason is most likely a poor credit rating or score. 

Understanding credit report

In Malaysia, Bank Negara Malaysia (BNM) maintains a computerised database of credit reports which contains credit scores. This database system is known as the Central Credit Reference Information System (CCRIS).

According to BNM, at present, the database system contains credit information on about nine million borrowers in Malaysia. CCRIS receives credit dates from various financial institutions and generates individual credit reports, which are made available to financial institutions, individuals, and even companies upon request.

A credit report contains the following credit information of an individual:

1. Outstanding credit(s) – excluding any accounts which have been fully settled.
2. Special attention account(s) – Non-performing loans, loans that are in default or close to being in default.
3. Application(s) for credit – Applications approved in the previous 12 months, excluding application that has been rejected, deleted, or cancelled.

How does a credit report affect loan application?

Financial institutions refer to your credit report to determine your repayment capabilities before approving a loan application. However, in order for the lender or bank to access your credit report, it first has to inform you in writing that a credit check is to be conducted.

Once the application has been approved, the bank will send information to the Credit Bureau which details, in the form of a credit report, how well you handled your debt. Reference to the credit report will be made by the financial institutions periodically to obtain updates on an existing borrower.

If you are doubtful of the credibility of credit reports, the information contained in these reports is entirely factual and historical. The Credit Bureau will not in any way give recommendations or opinions based on the report to financial institutions.

Different banks have different policies when it comes to loans or credit card approvals. They may place varying importance on the different information detailed in this report. However, it is known that the approval of a loan application will largely depend on the risk evaluation conducted by the bank, based on the information in the borrower’s credit report.

The information stored in CCRIS also includes any new loan applications. Hence, it is safe to say that your banks are fully aware of how many banks you have already approached prior to applying for financial credit from them. This may not affect your credit rating but may send a negative signal to some banks.

Keeping a clean record

With full disclosure of your housing loans, car loans, credit cards, personal loans, as well as other commitments jointly made with friends or family members, it is important to keep a clean record to avoid any obstacles in applying for financial credit in the future.

While each bank assesses your credit score differently, your credit report will provide crucial information that determines whether your application is approved or rejected by the banks. Therefore, it is important to keep your credit rating in mind when you are managing your money and debts.

Here are some simple ways to ensure a clean credit record:

1. Get a job – Having a stable stream of income indicates your ability to service a loan or manage your credit card.

2. Avoid holding too many credit cards and maintain a good payment record – Apart from limiting the number of credit cards you hold, manage the repayment of all outstanding balances on your credit card. You can consider consolidating your credit card debts on one card.

3. Timely payment – Repayment history is a major factor in the lenders’ risk evaluation on a borrower. Do not drag or defer your repayments as it will affect your future loan or credit card applications.

4. Manage your debt – Always borrow according to your capacity. As your credit report encompasses all your active loans, banks are aware of your outstanding borrowings. If you have used up all your borrowing capacity, then your loan will most probably be rejected.

What if you have a bad credit report?

Raising your credit score is not complicated, but it does take time, discipline, and hard work. These steps can help get your credit score up to improve your chances of qualifying for a mortgage:

1. Check your credit report regularly. You are allowed to check your credit report every three months. Correct any errors on your report, especially late payments that are not recorded properly. Here’s how you can obtain your personal credit report.

2. Make all your payments on time. Late payments are the first thing that lowers your credit score.

3. Pay down revolving debt like credit cards. A high debt-to-credit ratio is another sure-fire way to lower your score.

4. Wait it out. As your credit report only records active loan accounts for the past 12 months, you just have to wait it out. As long as you’re paying down debt and making payments on time, your credit score will eventually rise on its own.

The above is generally good financial habits to inculcate from the beginning. However, if you have a bad record now, it is not the end of the world. While your credit rating can make or break your life (for the moment), it isn’t something to fear.

When you understand how to manage your credit responsibly, you will eventually build up a solid credit report and save yourself a lot of trouble, and sometimes even money from lower interest rates offered by banks.

Source:https://www.imoney.my/articles/can-credit-report-affect-loan

3 Reasons to Have More Credit Cards!

The first thing that comes to mind when more credit cards are mentioned is an irreversible financial crisis! But with scrupulous swiping, you could just make every ringgit spent count by having more credit cards.

Before you start heaving all sorts of lambasting thoughts at us, let us explain why the header above can make absolute sense if you approach it in the right way.

It's common to think that the excessive prostitution of your various credit cards with different ranges of benefits can cause you to lose track of spending ultimately leading you into a credit abyss. You won't be alone in thinking so but is that the only way?

In fact (not in theory!), having more credit cards can help you take complete advantage of every Ringgit you spend. Have we got your attention yet? Keep your eyes peeled as we flip your perception 180 degrees.

Improve Your Credit Worthiness

How creditworthy you are is decided based on a number of factors compiled and assessed based on an internal algorithm used by banks with the helping hand of Bank Negara to minimise risk to the bank.

The outcome of this process will influence your rate of approval for personal loans, home loans, hire purchase loans, and even other credit cards.

That said, having many credit cards isn't such a bad idea for your creditworthiness if you can show the bank how well you manage multiple debt opportunities. This, of course, can only be a boon if you diligently pay off your balances in full every month and avoid irresponsible spending.

Ride the Waves of Bountiful Perks

This is where channeling your inner leprechaun comes into play – converting every ringgit spent into alternative sources of bounty as provided by the credit card issuing banks.

The plethora of credit cards dwelling in the Malaysian market offers pretty gorgeous rewards and benefits, and honestly, it'll be quite sad if you didn't make use of them.

Travel benefits like priority check-in, access to airport lounges, airfare rebates, and reward points for overseas spending amongst others exist for the avid traveller with some of the best travel credit cards in the country.

Then there's the 'soccer mum' picking up the kids from school, taking them around from one place to another, and grocery shopping like a superwoman. She could get it all done and end up with a good amount of spare change by using a good cashback credit card where every Ringgit spent earns in return!

If that's not enough, think of the cards, which offer much better dining and shopping discounts than their competitors but this will only be helpful to you if you possess the card in question!

Unfortunately, these perks have been spread out across the myriad of credit cards available in the market – call out the inner frugal being and pick ones that will benefit you and not haunt your statement at the end of the month! If you're spoilt for choice, let us help you pick one with our credit card comparison.

The basic idea is to have an arsenal of credit cards with varying benefits to use when it will give you the best discount. But this doesn't mean racking up huge purchases on all of them!

For the Odd Emergency

And by this, we don't mean satisfying your insatiable desire to maximise all credit limits on your cards – but to be the shining piece of plastic during your times of financial darkness.

Some credit cards offer huge discounts on medical expenses, which can come to the rescue for those who don't have the added accolade of medical insurance under their belt.

How about a less panic engulfed scenario when you forgot to pay a visit to the ATM but have just eaten a full meal and need to pay up but your other card is piled up with the recent medical bill you ran up? Your emergency card could save you from an embarrassing situation.

Where emergencies are concerned, having more than one credit card can most definitely pull one out of financially sticky situations – frivolous and life-threatening alike.

Sign Me Up Already!

Hold your horses, troopers. Being the financial experts that we are, it is a cardinal task of ours to advise that credit mismanagement can occur under unscrupulous circumstances and does not have a preference in choosing its victim.

Therefore, we advocate proper use of your credit card and in the event that you do find yourself in financial dire straits, there is always the option of consolidating your credit cards through a balance transfer where interest rates are as low as 0%.

Or you could take up a personal loan to give you more breathing room to clear out the outstanding credit. At the end of the day, a credit card could be a friend or foe depending on how you use it. Sounds like a lot of things in life!

Source:https://ringgitplus.com/en/blog/Credit-Cards/3-Reasons-to-Have-More-Credit-Cards.html

Personal Finance 101: What Is a Cashier’s Check?

Cashier's Check

“Cashier’s check” is one of those financial terms that you may have heard thrown around, but what does it really mean? How is a cashier’s check different than a regular check, and why would you need to use one? Is it the same as a certified check? We’ll answer those questions and more below.

What Is a Cashier’s Check?

A cashier’s check is one drawn directly from a bank’s own funds in the bank’s name. It’s typically signed by a teller (also known as a cashier — hence the name). The bank is responsible for paying the amount on the check directly to the payee. This is in contrast to a personal check, which is drawn on your account and authorized by your signature.

You may be required to use a cashier’s check instead of a personal check for a particularly large or important purchase, such as making the down payment on a house or car. Since the cashier’s check is drawn from a bank’s funds instead of your personal account, the seller knows it won’t bounce. A personal check would offer no such assurance.

Another advantage of a cashier’s check over personal checks: Funds from cashier’s checks are made available almost immediately — the next day at the latest. A personal check is vulnerable to longer processing times, and large amounts are at particular risk of long holds.

How do I get a cashier’s check?

Getting a cashier’s check is something you can only accomplish offline. To get one, you’ll need to do some banking the old-fashioned way: Go into your local bank branch or credit union and request one from a teller.

You’ll want to bring your ID, and make sure you know all of the necessary information for the check: the payee’s name, the exact amount, and any notes that should be included.

If you have an account with that bank or credit union — it can be a savings or checking account — the teller will simply confirm that you have the funds and take that amount from your account before handing over the check. If you don’t have an account there, you’ll need to have enough cash to cover the check amount.

Note that some banks won’t issue cashier’s checks if you don’t have an account with them, so it’s worth calling ahead if you aren’t a current customer.

What does a cashier’s check cost?

You’ll typically have to pay a fee before a cashier’s check is issued, though some may issue them free for all or certain customers. Fees vary from bank to bank, but the largest banks in the U.S. charge anywhere from $7 to $10 for the service, according to MyBankTracker. Other banks may actually charge a percentage of the check total instead of a flat fee.

Are there cashier’s check scams I should watch for?

Unfortunately, yes, but these scams are more likely to entangle the recipient of the check rather than the sender. Like any other checks, cashier’s checks are vulnerable to forgery.

One particularly popular scam has the “payer” sending a check for an amount that is greater than he or she needs to pay, then asking the payee to return the difference in cash or via a wire transfer. The catch, of course, is that the check turns out to be bogus.

If you’re accepting a cashier’s check as payment, make sure you accept one for only the agreed-upon amount. You can also verify that the check is legit by calling the bank where it was supposedly issued — just be sure to track down the bank’s contact information from a trusted outside source.

Alternatives to Cashier’s Checks

If you need a more secure way to pay someone than cash or a personal check, a cashier’s check isn’t your only option. Here is a rundown of some of your other options, and how they differ from cashier’s checks:

Certified checks

You might find that a bank teller automatically assumes you want a cashier’s check even if you ask for a certified check. That’s because certified checks have become increasingly rare, and many people use the terms interchangeably. (My own mother, a bank teller for more than 20 years, has only issued two or three certified checks in that time.) But there is a difference.

A certified check is still a personal check — unlike a cashier’s check, the money is drawn from your account, not the bank’s. However, both you and the bank sign it. The bank’s signature essentially guarantees the payee that you have funds available in your account to pay the check amount, which the bank can freeze until payment. Because both you and the bank sign the check, both of you could be held liable if there is a problem with payment.

Practically, both a cashier’s check and a certified check are more secure ways to guarantee payment than a personal check. However, a cashier’s check may have an edge from a security standpoint. Since it comes solely from the bank’s account, there aren’t as many chances for issues such as fraud or payment disputes.

Money orders

A money order offers another secure way to pay someone. You fork over money to an institution, and they give you a money order that looks a lot like a check. You verify the amount, fill in the payee and sometimes your own personal information, and sign the front. The money order is then sent to the payee, who must sign the back to receive the funds. You can ensure it’s delivered by using a tracking number on your receipt.

Like a cashier’s check, there is a fee to get a money order. Fees vary widely, but banks and credit unions are usually the more expensive option, charging around $5 to $10. You can get a money order for just a dollar or two at the post office or Wal-Mart. Note, however, that money orders are usually capped at a certain amount, such as $1,000. If you need to send a payment for more than that, you’ll have to purchase multiple money orders.

To send smaller amounts, a money order probably has an edge over a cashier’s check when it comes to convenience. That’s because you can get a money order at the bank, but you can also go to the post office, grocery store, and even some gas stations — no bank account is required. And since a money order doesn’t have your banking information on it, you might prefer it over a personal or certified check if you don’t know or trust the payee. However, the person or business being paid may prefer a cashier’s check because money orders can be more vulnerable to fraud, and it can take longer to get their money.

Wire transfers

A wire transfer is another option to consider, especially if you need to send money fast. You’ll need to know the bank name, routing number, and accounting number for the payee to start the process. Many banks will require you to visit a bank branch, especially when you need to wire a large amount, though some may allow smaller wire transfers online.

Once the bank verifies that you have the money and sends the amount you requested, the payee can access it almost immediately — there is typically no hold on the funds. This is a big pro over cashier’s checks if speed is an issue. Wire transfers are also a good option if you need to send money abroad. However, note that wire transfers are very expensive. Expect to pay $25 to $30 to send a wire transfer domestically and around $15 to receive one, according to MyBankTracker. If you need to send money abroad, you could be looking at a fee of around $50.

Be sure you know and trust the recipient of a wire transfer, since the speed of the transaction means it can be hard to recover funds in the event of fraud.

Cashier’s Checks Can Mean Peace of Mind

Cashier’s checks represent a relatively low-cost, convenient way to add a level of security to an important payment. Though you will need to head to a bank to get one, the process is fairly painless and helps guarantee your payee will receive their money.

As I outlined above, there are other ways to make a secure payment, including certified checks, money orders, and wire transfers. All have pros and cons that you should evaluate in the context of the payment you need to make.

If you simply need to make a person-to-person payment without the added assurance of a cashier’s check, check out our post on The Best Apps to Send Money. Many of these services allow you to send money electronically for free, and you won’t even need to blow the dust off your own personal checkbook.

Source;http://www.thesimpledollar.com/what-is-a-cashiers-check/

7 Ways to Make Your Savings Grow Faster Automatically

Having trouble putting money aside? Here are some systems to put in place so you can amass cash without thinking too much.

What are you saving money for?

European vacation? Kids' college tuition? An emergency fund for a natural disaster, disease, or job layoff? Or maybe you're dreaming of the perfect retirement.

Sometimes we do better at saving our money; other times it's tough. Collectively in June, the latest month for which figures are available, we socked away $646.3 billion, or 4.8 percent of our disposable income, according to the U.S. Bureau of Economic Analysis. That rate was up slightly from May but was less than half of its 25-year peak of 11 percent in December 2012.

How much did you put away? Not so much?

"If you have trouble putting money aside in a savings account, maybe the solution is to stop struggling and put things on autopilot," says Money Talks News financial expert Stacy Johnson.

Here are seven tips from Stacy and others to get you going, whatever you're saving for.

1. Pay yourself first. Payroll deduction is the single best idea and one of the oldest. Have money automatically taken out of your paycheck and transferred to a savings or retirement account. See if your employer allows you to directly deposit your paycheck to multiple accounts.

If you can pay your bills on your current income, send any additional income from raises, bonuses, cash awards, or other windfalls straight to savings, too. If your air conditioner conks out or it's time to take that cruise, you'll have a nice sum of money waiting for you in the bank.

2. Round up your savings. Some banks, including Bank of America, have programs that automatically round up debit-card purchases and then transfers that amount to your savings account. For example, say your tall, half-caf, non-fat vanilla latte costs $3.50, your bill would be rounded up to $4; the extra 50 cents would be deposited into your savings account. So essentially you get a treat now and "keep the change" yourself to save toward another treat later. That act alone daily would build to a painless $182.50 over the course of one year.

3. We all could use a little change. The low-tech version of the round-up program is stashing your spare change at the end of each day. Keep it in a jar, mug, glass, or piggy bank. When your container is full, or on a set schedule, you can turn that change into a bank deposit. Stacy says he turbo-charges this plan by stashing singles as well as coins.

Coinstar will exchange your coins free if you accept your money loaded onto an egift card from sponsoring partners such as AMC Theaters, The Gap, Sephora, or Toys R Us. That won't raise your savings account balance, but it will give you the opportunity to save your spare change for a special item.

4. Pay with cash. You'll have more cash to stash, too, if you pay with real dollar bills, 5s, 10s, and 20s when you shop. Using cash automatically makes you spend less compared to plastic. An oft-quoted Dunn & Bradstreet's study says people spend 12 to 18 percent more when using credit cards instead of cash. McDonald's says a credit card user's average ticket is $7, but cash customers usually spend only $4.50.

Why? If you're worried about schlepping back to the ATM to reload your wallet, you will be less tempted to spend more cash than you planned. You'll be more inclined to pass on a higher-end model of a product you already intended to buy; also, you'll stick to your shopping list and resist in-store temptations to buy more items than you intended.

5. Make charging rewarding. If you must use a charge card, use one that offers cashback or rewards. Then you're earning cash or equivalents without effort.

You can check out who's got the right card for you in the Money Talks Solutions Center.

6. Bank your discounts. What do you do with all the money you save buying bargains? Check your receipts. Most now conveniently tell you how much you saved on a sale item vs. its regular price, or how much you saved by redeeming coupons. Add them up. Did you buy a cheaper generic and save a bundle over a name brand? Track the difference.

Make it a habit to reward yourself by placing all the money saved from those bargains in your savings account.

7. Automate your transfers. Check with your bank or credit union about how to set up automatic transfers from your checking account to your savings account. This is another way of making sure you pay yourself first. You can even set up sub-accounts and label them for special goals, like college or a new car fund.

Now that your savings are on automatic, relax, and watch your balance grow.

11 Pearls of Financial Wisdom From Jim Cramer

Jim Cramer is one of the most recognizable investing experts and makes a living offering energetic stock-picking advice each weekday on CNBC'sMad Money. The former hedge fund manager has a lot to say about how and where to invest your cash. He may not be a perfect investor (who is?), but he offers some sound, common-sense tips for anyone looking to place some money in the markets.

Here are 11 pieces of financial wisdom from Cramer, gleaned from his TV appearances, books, and interviews.

1. Invest in Stocks

If there is one piece of investment advice that Cramer touts more than any other, it's that stocks hold the key to wealth. His CNBC show, Mad Money, is entirely based on offering stock-picking advice. In his view, only stocks — and by extension, many mutual funds and ETFs — can someone amass enough wealth to retire comfortably.

2. Get Out of Debt

Cramer has noted repeatedly that it makes little sense to invest your money in the stock market when you have high-interest credit cards to pay off. "You're just not going to be able to generate returns that are consistently high enough to cancel out the sky-high interest rates that most [credit] cards carry," he told viewers in 2013.

3. Get Health Insurance

There are many young people who've decided to pay the Obamacare penalty rather than buy insurance, based on the notion that they are healthy and can live without insurance. This is a mistake, Cramer says. "One serious illness, a couple hospital visits, and you can kiss all the capital you've spent years building in the market goodbye," he said.

4. Don't Believe Everything You Hear on Television

Yes, Jim Cramer, the host of his own television show, actually said that. "I think you are naive if you simply believe what you hear. The vetting process to get on television simply isn't all that rigorous," he wrote in his book, Jim Cramer's Real Money.

5. Understand Bonds

Cramer is a stock lover but acknowledges that bonds can be an important part of many retirement portfolios. And, he says that if you don't grasp the mechanics and influence of bonds, you won't be as successful when picking stocks. "If you don't understand how bonds work, I think you will not be able to make nearly as much money as if you do," he wrote.

6. Don't Be Emotional

On his television show Mad Money, Cramer doesn't exactly come off as a cool and level-headed guy. But the truth is that he knows that research and reason drive sensible investing. "Emotion has to be checked at the door in this business," he wrote in Real Money.

7. Have Patience

Like many successful investors, including Warren Buffett, Cramer is a proponent of finding value. And that means that patience will play a big role in your success. "I see so many people throwing in the towel on companies that have real assets and real worth just because they aren't working now, and it angers me," he wrote.

8. Keep It Simple

Cramer's discussion of stocks can be bewildering to the new investor. But he recommends getting back to basics if you have a relatively limited amount of money to invest. On June 21, a Twitter follower asked Cramer what to do with just $300. "First 10 thousand goes into an index fund," he replied.

9. Give Wealth Back

In Cramer's view, it's not enough just to get rich. You need to do something with your money, by either giving it to charity or building new ventures. "If you get rich, and there is a good chance you will, try to give back, not just in charity but create something, a company that can grow," he told Forbes Magazine in 2014. "Invest in something new. I have helped start six businesses. Those have provided food, roofs over peoples' heads, and health care."

10. Invest Early for Retirement

Cramer has often told the story of how he lived in his car in the late 1970s but still managed to put $1,500 into a retirement account. Think of what that investment is worth now. Cramer is a huge proponent of using 401(k) plans and Roth IRAs to build retirement wealth with tax advantages.

11. Do the Work

If you want to pick winning stocks, Cramer says, you have to sweat for it a little. That means parsing earnings reports carefully. It means listening to investor conference calls. It means reading independent research reports. The good news is that all of these resources are readily available. "I have resources you don't have, but they are way overvalued compared to the information I glean from public information about stocks," he wrote in his latest book, Get Rich Carefully.

Have you gleaned any enduring lessons from Jim Cramer? Please share in the comments! 

Source:http://www.wisebread.com/11-pearls-of-financial-wisdom-from-jim-cramer?ref=relatedbox

Types Of Credit Cards In Malaysia

Credit cards in Malaysia can be categorised into six broad categories. The right card for you depends largely on your spending habits and your attitude to debt.

Cashback

The concept of a cashback card is simple – for every Ringgit you spent, you receive a percentage back in cash at the end of every month or quarter. The cashback (or rebate) percentage varies from card to card and is normally between 0.5% and 3% (although some cards offer up to 20% in rebates).

Should you get one?

They typically have high-interest rates. Most of them have in place a cap (or maximum limits) on rebates. However, if you’re generally a large spender and are always able to pay off your card balance in full, a cashback card could help you earn money back on your spending.

Rewards

Rewards cards let you earn reward points when you spend. These reward points can then be used to redeem a wide range of goods and services. Typically, you earn one reward point for every Ringgit spent on your card.

Should you get one?

Using a rewards card could be a great way of saving money, as most rewards card issuers do not set a cap or maximum limit on the number of reward points you can earn. By using this card on your everyday purchases (and big-ticket items like flight tickets), you can potentially rack up many points without much effort.

Petrol 

Petrol cards are designed specifically for people who spend a lot of time on the road. These cards normally come with great petrol benefits, including rebates or cashback on fuel, as well as discounts at petrol stations.

Should you get one?

If you spend a significant amount of money on petrol each month, having a petrol card could potentially save you a lot of money in the long term.

Travel 

Travel cards are reward-based cards which allow you to earn points or air miles from different frequent flyer programmes when used for purchases. Some also offer discounts on travel packages or flight tickets.

Should you get one?

If you’re a frequent traveller, and already are a member of a frequent flyer or travel loyalty programme (e.g. Enrich, Krisflyer or AirAsia), having one may be a good way to speed up the accumulation of loyalty points.

Premium

Premium cards offer cardholders premium benefits like concierge service, dining and golf privileges, lounge access and more. These cards normally have a much higher minimum income requirement (some may even be invitation-only cards), but they also come with a much larger credit limit.

Should you get one?

Having a premium card will no doubt bring many premium benefits and privileges, like discounts at your favourite five-star restaurant, however, they can also cost a lot of money. Premium cards often charge annual fees in the hundreds of ringgit, although standard annual fee waiver programmes may also be available.

Speciality and co-branded

Speciality cards are the “catch-all” category. These cards are normally designed for a specific segment or target niche. For example, some offer exclusive discounts to movie tickets, while others provide great health and medical benefits.

Should you get one?

Speciality cards are tailored to specific groups of individuals (e.g. frequent movie-goers, lady shoppers or even insurance agents). If you find that you belong to one of these niche groups, having such a card can be very rewarding.

Final note 

There are more than 200 credit cards in Malaysia, and choosing the one that best suits your needs can be very challenging. If you’re in the market for one, you can compare and apply for the best one through our credit card application online site.

Source; https://www.imoney.my/articles/types-of-credit-cards-in-malaysia