Was your loan application rejected again? If so, you may be wondering what was wrong with it. The answer may lie in your loan information report from the Moneylenders Credit Bureau (MLCB).
If you are wondering what is money lender credit bureau, this article will look at what is the MLCB and how it works.
With a credit report from MLCB, you can easily track, manage your loans, and avoid borrowing beyond your limits.
Its report may help you to qualify for future loans with licensed money lenders.
What Is Money Lender Credit Bureau?
The Moneylenders Credit Bureau is a data repository that stores up-to-date information on borrowers’ loan details with licensed money lenders.
The MLCB allows lenders to review a borrower’s creditworthiness and decide if they should approve the borrower’s loan application.
Before the MLCB was launched, borrowers could take multiple loans from different money lenders simultaneously. This resulted in over-borrowing and increased business costs for lenders due to high default rates.
With MLCB’s data repository in place, lenders can avoid giving loans to high-risk borrowers . Borrowers can also manage their loans better and avoid over-borrowing.
Initially, the credit reference agency DP Information Group (DP Info) was in charge of the MLCB’s operations.
However, in Jul 2021, the Ministry of Law appointed Credit Bureau Singapore (CBS) as the new administrator of MLCB.
During its three-year tenure, CBS will collaborate with the Credit Association of Singapore (CAS) to conduct financial literacy campaigns. This will help borrowers to develop good borrowing habits and practice financial responsibility.
The public education will also see CBS collaborate with the Registry of Moneylenders to protect lenders from fraudulent activities and reduce business costs.
How Does The Moneylenders Credit Bureau Work?
As contributing members of the MLCB, licensed money lenders must provide information on their borrowers loans and payment behaviours.
This updated information generates a credit report called a loan information report that other lenders can access when reviewing loan applications.
This loan information report is updated regularly, and changes are reflected after each loan repayment. The report serves as a historical reference that details all active loans between a lender and a borrower.
When considering what is money lender credit bureau, it is worth noting that the bureau does not collect information on borrowers’ loans with banks or credit facilities.
In addition, the information collected is not shared with any third party.
What Is Included In A Loan Information Report?
The MLCB loan information report records all your loans with a licensed money lender at a time. This includes your repayment history and cases of default.
A good credit report suggests that you are unlikely to default on a loan and hence a low-risk borrower, while the opposite is true for a poor credit report.
However, there are ways to improve a bad MLCB report. Some of the information included in your report is:
1. Personal Data
The first section of the report details basic information including your name, address, and NRIC. It also has your employment and monthly income status, as well as details of civil judgments and bankruptcy.
2. Account Details
This includes information on when the account was open or closed, repayment history, and outstanding loan amount.
3. Loan Type
Here, you’ll find a list of all your existing loans with licensed money lenders (LMLs).
4. Payment Status
This is the last section of your MLCB report. It includes details of your loan repayment status for unsecured loans for the last 12 months.
Loans That Are Not Included In Your MLCB Report
While the MLCB collects information on all your loans with licensed lenders, not all loans are included in your report. These include:
Business loans taken under your company’s name
Personal loans from your friends or family
Student loans and grants repaid on time
Products you paid for using Buy Now, Pay Later (BNPL) terms
Mortgages from banks and building societies
Who Can Access The Report?
An MLCB report is accessible to borrowers and licensed money lenders for a small fee. The Ministry of law and the Registry of Moneylenders can also access your report.
All other parties are not allowed to access your report.
When you apply for a loan, a licensed lender accesses your credit report to check your creditworthiness and track your active loans.
As a borrower, you can access your report anytime to track and manage your outstanding loans with licensed money lenders.
You should access or check your report at least once a year. By doing so, you can correct any anomalies in your report and prevent fraudulent activities.
How To Check The Report
You can check your report by visiting the Moneylenders Credit Bureau website. Simply follow these steps:
- Log in to your Singpass account. If you don’t have one, visit the Singpass website and create one.
- Once you are logged in, fill in the personal information form.
- Select the credit report that you want to review, namely the MLCB report
- You’ll be directed to the MLCB website, where you have to answer some questions to confirm your identity.
- Once you are done, the report will be available for you to review.
You can also visit the MLCB or CBS offices and request a copy of your credit report. You’ll pay $1 per report as a borrower, while a money lender will be charged $0.50 to access the report.
How Does The Report Affect You As A Borrower?
Here are a few ways your MLCB report affects you as a borrower:
It Helps You To Spot Fraud
You should check your report at least once a year to prevent cases of identity theft.
When your Moneylenders Credit Bureau report lays idle and unchecked for long periods, criminals can use it to borrow loans or buy goods in your name. Others may use your details to open accounts for criminal activities.
By checking your report regularly, you can spot any unusual credit report entries that you have not initiated and take steps to have them removed from your report.
It Affects Your Credit Score
Your credit score is a four-digit number that determines whether you are a high-risk or low-risk borrower. The number ranges from 1,000 to 2,000.
A higher number indicates a low risk, while a low number indicates a high risk.
Your credit report is used to generate this number. This means your credit score will be high when you have a good credit report with no default cases or bankruptcy filings.
If the report is negative, you can take steps to change it and improve your credit score.
It Determines Your Ability To Borrow
As mentioned, your MLCB loan information report is used to check your creditworthiness.
A licensed lender will review your report before approving your loan. Cases of late loan repayments may cause your application to be rejected.
On the other hand, if you have a good report with little or no concerns, it will be easier for lenders to regard you as a low-risk borrower.
This could see you qualifying for higher loan limits and getting better repayment terms from licensed money lenders such as U Credit.
How Can You Improve Your Credit Report?
If you have a poor credit report and low credit score, here are some steps you can take to improve them.
Make Repayments On Time
Avoid delaying or defaulting on your loan. The easiest way to do this would be to get loans within your means. Avoid over-borrowing, as it will increase your chances of defaulting.
In cases when you are not able to repay the full amount, make small payments instead of defaulting altogether. You can also choose lenders that have flexible repayments that fit your financial situation.
Do Not Borrow From Multiple Lenders
Borrowing from multiple lenders shows you are a credit-hungry borrower. This may cause lenders to reject your application out of fear that you can’t repay.
In addition, with too many loans, you will likely forget to pay for some, delay making repayments, and impact your credit report.
Try to pay off short loans first to improve your report quickly. Or engage a single lender for different loans. Alternatively, you could seek financial help from friends and family.
An MLCB Report Is a Useful Tool For Borrowers
The MLCB report is a financial tool that enables you to develop better financial habits by borrowing within your means. It also encourages financial responsibility by helping you manage your active loans better.
Knowing what is money lender credit bureau, and how it works also allows you to stay in control and safeguard your identity from criminals.
If you need instant financial help for personal loans, you can apply for a loan with U Credit, an established licensed money lender in Singapore.
Contact us now to learn more about our loans that come with attractive repayment terms that fit your financial situation.