Thinking about borrowing money in Singapore? There are rules in place to help you avoid getting into too much debt. The Moneylenders Credit Bureau (MLCB) is in charge of setting these rules.
The MLCB assists the lender in tracking a borrower’s credit history. It acts as a central repository of credit information, wherein you can find out if a borrower has an existing loan or has delayed repayments. It helps promote responsible lending practices and can reduce the risk of overborrowing.
Moreover, the licensed money lender needs the credit report from MLCB before approving a loan application.
So, if you’re applying for a personal loan from a legal lender, knowing how MLCB works is essential.
What Is The Moneylenders Credit Bureau (MLCB)?
The MLCB serves as a central data repository for borrowers’ loan and repayment histories with licensed money lenders in Singapore. It serves as one of the main references for legal lenders to approve a loan. The credit report from MLCB allows licensed lenders to assess a borrower’s creditworthiness and prevent excessive borrowing. As a result, it can help borrowers become responsible and avoid debt traps.
Under Section 30D of the amended Moneylenders Act, the Ministry of Law assigned Credit Bureau Singapore (CBS) to run the Moneylenders Credit Bureau (MLCB).
Starting 1 March 2016, licensed lenders need to purchase a credit report before granting a loan. Moreover, borrowers can purchase this report. Currently, licensed lenders, borrowers, the Ministry of Law and Registry of Lenders have the access for this report.
What Is The Role Of MLCB?
MLCB plays an important role in every loan application as it provides lenders with borrower loan information for the sole purpose of assessing the borrower’s creditworthiness.
The lender needs to purchase a credit report as part of the loan application assessment.
With the credit report from MLCB, lenders can make better loan approval decisions with less risk, while borrowers can manage their loans while avoiding excessive borrowing.
How And When Is The Information Submitted To MLCB?
Before you get a loan, your money lender works with the Moneylenders Credit Bureau (MLCB) to understand your borrowing history.
Here’s how and when this information exchange happens:
- Collecting Borrower’s information. Before a licensed lender approves your loan, they’ll ask for some basic information such as your name, phone number, loan amount, and tenure.
- Sharing the details. The moneylender sends all that information to the MLCB (Moneylenders Credit Bureau).
- Checking your credit history. The lender will also look at your credit report by purchasing one from the MLCB. This shows them any other loans you currently have.
- Keeping records. If your loan gets approved, all of this information stays with the MLCB. They use it to keep your credit report up to date for other lenders to reference.
What Is Included In The MLCB Loan Information Report?
An MLCB loan information report contains a list of the borrower’s active loans from legal lenders. Moreover, it includes the outstanding payables and repayment history of the borrower.
Here is the list of information included in the loan information report:
- Borrower’s personal information, which includes the name, ID number, or Unique Entity Number (UEN),
- Loan information such as the loan type, tenure, principal loan amount, and total amount payable to the legal money lender
- Payment and repayment status, which includes the list of all the outstanding loans and the repayment history of each loan
- Loan guarantor’s status or surety this can reflect guarantor/surety’s legal responsibility for any unpaid loans.
Every time a borrower applies for a loan, a licensed moneylender considers the listed information above. It will be the basis for deciding whether to approve a borrower for a new loan.
Please take note that the loan information report only includes loan and repayment details from Singapore’s legal lenders. It will not show any bank loans or credit card transactions.
How Often Is the Loan Information Report Updated?
When it comes to updating the loan records in the MLCB’s system, the legal lenders update them in real-time, or “live.” On the other hand, loan repayments are updated the following business day.
In cases of inaccurate information, the MLCB takes the necessary action after they receive your updates on any errors in your loan information report. First, they will consult with the lender who provided incorrect information. Then, within 10 working days, they will provide you with an update on the outcome of their investigation.
So, in any case of report errors, you may share your feedback or report it at their hotline at +65 63355897, or you can send an email via [email protected].
How Do You Purchase Your Loan Information Report?
Although it is not necessary to purchase a loan information report or a borrower’s credit report when making a loan application, it is possible to retrieve your loan information.
You can purchase it via the following channels:
- Buy it online. For quick access, you can purchase it at the MLCB website at mlcb.com.sg.
- Directly Purchase it in person. For direct purchase, you may get this report by visiting the MLCB’s office at 2 Shenton Way, #20-02, SGX Centre 1, Singapore 068804. If it is a walk-in transaction, it is only available for cash purchases.
- Get it at Credit Counselling Singapore (CCS). Another option for purchasing your loan information report is to visit the CCS office at 51 Cuppage Road, #07-06, Singapore 229469.
How Can You Improve Your Credit Rating?
Another consideration to get approved with your loan application is your credit score. A good credit score implies that you have a higher chance of getting the best loan offers. However, a bad or low credit score can affect your loan application, and it can be a reason for getting rejected.
On the other hand, improving a low credit score is not an overnight process, but it’s not impossible. It’s a constant process and habit. Here are some smart ways to successfully improve your credit rating in Singapore.
1. Check and correct possible errors
Lender or credit companies are relying on third parties such as banks to calculate your score. There can be chances of mistakes such as listing wrong entries. Therefore, it is important to check carefully the details of our credit report and submit feedback if there are any corrections.
2. Get out of debt fast
Having existing debts can greatly harm your credit score. If it is possible, it is best to clear your debt as soon as you can.
However, if you have a hard time repaying these loans, it is time for you to consider a debt consolidation loan. This means that you can combine all your outstanding unsecured loans into one debt. Make sure to select the best debt consolidation plan with good terms and suitable for your current financial situation.
3. Avoid applying for multiple loans at a time
Each time you make multiple loan applications, it can be reflected in your credit report. This implies that you are a high-risk borrower, which is common with financially distressed individuals. So, it is best to apply for a loan one at a time.
Also, if you are having a hard time managing your debts, you can seek help through credit counselling or a Debt Management Programme.
4. Consider short term loans if you have a poor credit score
Taking a small short-term loan and repaying it on time can help repair your damaged credit history. This can help you pay your debt fast. And when the credit bureau sees that you have cleared your loan on time, you will see an increasing credit score.
5. Use your credit card wisely
The credit report from CBS includes credit card debts. Therefore, if you have an outstanding credit card debt, it can have a negative impact on your credit score. This is why it is important to not only pay the minimum due amount every month, as the interest will still continue to increase. Try to clear your balance each month. Also, discover how to clear a credit card with a personal loan from a licensed lender.
Moreover, avoid having too many credit cards that you cannot manage. It is best to have a credit card that suits your lifestyle.
The Bottom Line
MLCB plays a vital role in promoting responsible lending practices in Singapore. Moreover, it helps borrowers avoid the risk of facing excessive debt.
Therefore, it is important to maintain a healthy loan information report. A borrower must be responsible for repaying outstanding debts on time.
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