If you’ve already tried borrowing from a licensed moneylender, you may also be well aware of their imposed borrowing limit. This limit covers how much you owe from all the moneylenders combined. But how do these lenders know this information? Well, the simple answer to this is through the Moneylenders Credit Bureau.
While a licensed moneylender may not look at credit scores, there are other things they look into before approving a loan. Among these is checking MCLB’s loan information report to assess creditworthiness and know how much a borrower may still be allowed to borrow.
From the loan information report to MLCB’s roles, procedures, and how they can help borrowers in Singapore – you’ll find everything essential here.
What is Moneylenders Credit Bureau or MLCB?
The Moneylenders Credit Bureau (MLCB) was created by the Ministry of Law (MinLaw) in March 2016. It was created to become the central repository of all licensed moneylender loan information in Singapore.
In early 2021, MinLaw announced that MLCB would allow licensed money lenders to access this information through the MCLB loan information report. And to date, Credit Bureau Singapore (CBS) continues to operate the MCLB, as assigned by MinLaw.
Through this system, moneylenders will help avoid borrowers from overborrowing and going into deep debt. MCLB does not collect data from banks and other financial institutions. Moreover, they do not make lending decisions on behalf of moneylenders as stipulated under the Moneylender’s Act.
See Also: Credit Bureau Report Singapore and How to Get CBS Report
How Does it Work?
MLCB is in charge of managing a loan management system for moneylenders and borrowers. This responsibility starts with collecting data on all borrowers’ loans and payments and extends to making the loan information report available for ready reference to requesting parties.
MCLB requires all licensed moneylenders to submit information on their borrower’s loans and repayments. This process ensures that data in the loan system is up-to-date and readily available to other licensed moneylenders through a credit report. Licensed moneylenders use this report to evaluate and approve a loan application.
However, licensed moneylenders should only use this report privately and not to be shared with any third party.
Loan Information Report
Similar to the credit report, MLCB’s loan information report also contains an individual’s history record with various moneylenders.
Here’s what you can see in the report:
1. Personal information
The report includes a borrower’s personal information such as name, address, birthday, NRIC number, or Unique Entity Number (for companies).
2. Employment details
The MLCB loan information report will also include the individual’s employment data such as the employer, employer address, monthly income, and CPF contributions.
3. Loan records
The loan section will include all active loans, outstanding balances, repayment history, and loan defaults. You will also find a detailed summary of your loans, including the loan type, tenure, interest rate, late fees, and more.
Meanwhile, the payment section reflects a 12-month repayment status. This section is updated on a real-time basis. Thus, all payments will be reflected immediately, often on the next business day. You are also in a more favorable position if you don’t miss a payment within twelve months.
4. Civil Judgments
Civil judgments are final court decisions for overdue loans, often requiring payment from the concerned borrower. These judgments may significantly affect a moneylender’s decision.
5. Exclusion records
Borrowers can register themselves on the self-exclusion list (except for debt consolidation loans). This service is available from MLCB and allows borrowers to exclude themselves from accessing personal loans. MLCB’s loan information report will also include this record if any.
6. Bankruptcy History
Bankruptcy is another component of the MLCB report and may stay on record stay on for up to 10 years and have a significant effect on your credit score.
Who Can Access MCLB’s Loan Information Report?
There are only four parties who can access this report, namely:
- Borrowers
- Licensed moneylenders
- Ministry of Law
- Registry of Licensed Moneylenders
Moneylenders are required to request a copy of this report every time a borrower submits a loan application. This step is necessary to check a borrower’s capacity to pay and evaluate how much they can still lend a borrower.
On the other hand, borrowers may also request a copy of this report to manage finances, check available limits, improve credit scores, and also for checking discrepancies.
How Does the Report Affect You as a Borrower?
MCLB’s loan information system is up-to-date and is regularly updated when a licensed moneylender submits a borrower’s loan information. So, every time you take a loan and make repayments, this will reflect on your record.
Licensed moneylenders strictly follow the borrowing limits set under the Moneylender’s Act. Check the below for a quick guide on these limits:
|
Annual Income (S$) |
Borrowing Limits (S$) |
|
|---|---|---|
|
SCs and PRs |
Foreigners |
|
|
Below 10K |
$3,000 |
$500 |
|
10K to 20K |
$3,000 |
$3,000 |
|
Above 20K |
Up to six times monthly income |
Up to six times monthly income |
When you apply for a loan, the licensed moneylender will request for a copy this report. The report will show how much in total your existing loan balances are from different money lenders combined. Your loan approval and the amount you may borrow will significantly depend on this report.
Through this report, lenders may identify high-risk borrowers. At the same, it could help prevent borrowers from taking more debt than is allowed and can manage.
Moreover, delinquent borrowers will also get poor credit ratings, while borrowers with good credit standings and behavior will also have excellent credit scores.
If you have poor credit scores, your chances of getting approved for a loan could also significantly decrease. On the other hand, good credit ratings allow you to get higher chances of approved loans and better loan opportunities and interest rates.
How to Get a Copy of The Report?
But requesting parties may also contact them through email at mlcb.cs@creditbureau.com.sg.
Borrowers may get a copy of their MLCB loan information report in three ways – online, personally, or thru a channeled partner like Credit Counseling Singapore.
Here are the steps for borrowers:
Online
- Go to the MLCB website and download an application form for your loan information report.
- Pay the minimal transaction fee of S$0.50. Note that there will be no refund for any processed credit report.
Personally
- Visit Moneylenders Credit Bureau Office at 2 Shenton Way, #20-02 SGX Centre 1, Singapore 068804. They operate during weekdays from 9 a.m. to 6 p.m. only.
- Present your NRIC and purchase your report directly.
How To Improve Credit Rating
All relevant data in MCLB’s report are factored in to determine a borrower’s credit rating. This rating is essential when applying for loans and getting good loan deals.
Generally, a credit score is a four-digit number between 1000 and 2000 and has an equivalent risk grade. This risk grade indicates the probability of default and are often used by lenders to evaluate your loan application.
|
Credit Score |
Risk Grade |
|---|---|
|
1911 to 2000 |
AA ≤ 0.27% |
|
1844 to 1910 |
BB 0.27% to 0.67% |
|
1825 to 1843 |
CC 0.67% to 0.88% |
|
1813 to 1824 |
DD 0.67% to 0.88% |
|
1782 to 1812 |
EE 1.03% to 1.58% |
|
1755 to 1781 |
FF 1.58% to 2.28% |
|
1724 to 1754 |
GG 2.28% to 3.48% |
|
1000 to 1723 |
HH 3.48% |
While it is impossible to improve your score overnight, you can make improvements in as fast as one year. A credit report reflects twelve months of history, and your credit may significantly increase if you do well during this period.
If your credit score is not that excellent, here are some ways to improve your credit rating.
1. Repay your loans diligently and on time.
Your credit score could drastically drop if you don’t repay your loans on time. If you think you will miss payments, inform your lender and ask for a payment extension or an adjustment in your existing repayment schedule.
2. Do not apply for loans or make multiple loan inquiries at the same time or within a short period.
Multiple loan inquiries also adversely affect your score. Lenders also take this behavior as a signal that a borrower is facing financial difficulties.
3. Avoid defaulting on your loans.
Never default on a loan if you want to maintain and improve your credit score. Loan defaults may appear on your credit indefinitely and cause a significant drop in your credit score.
Conclusion
Borrowers in Singapore could borrow up to six times their monthly income, depending on the borrowing limit. A moneylender may only decide on loan approval and the loan amount after they check a borrower’s loan information report from MLCB. If you already have existing loans, repay them diligently for chances of getting a higher loan amount.
Key Takeaways
- An MLCB loan information report is an essential tool that moneylenders use to determine whether or not to approve a loan.
- This report is useful and can protect both the licensed moneylender and the borrower.
- No unauthorized person or entity is allowed to access the MLCB and the borrower’s data remains safe.
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