Are you a Singaporean who has any outstanding loan? Have you approached any licensed moneylender in the past year? Has your loan limit increased since you last paid your loans? These are some of the questions that go through the mind of many Singaporeans when it comes to taking out a loan to moneylenders or alike. Did you also know that the average Singaporean can borrow 18 times their monthly income on moneylenders?
Well, the MLCB controls all these figures. If you have little or no knowledge of what the MLCB is, worry not- You are at the right place. We will tackle everything you need to know about the MLCB.
What is Moneylenders Credit Bureau or MLCB?
In March 2016, the Singaporean Law Ministry created the Moneylenders Credit Bureau (MLCB): A central repository that contains data on the history of all loan information (requests and payments) by moneylenders in the country.
Earlier this year, the ministry announced that the Moneylenders Credit Bureau would allow all licensed money lenders access to the creditworthiness of the borrowers. The aim of this was to prevent borrowers from diving deep into more debts that they will find hard to settle. Previously, the MLCB did not contain this data. The DP Information Group (DP Info) was granted the mandate to design and develop the MLCB. The group is thereby responsible for the daily operations of the MLCB.
How Does the Moneylenders Credit Bureau Work?
Every licensed money lender is a contributing member of the MLCB. As previously mentioned, the role of the MLCB is to provide licensed moneylenders with data that will enable them to calculate the creditworthiness of all potential loan applicants.
The development of the Lender’s Credit Bureau requires all licensed moneylenders to come up with information on the customers’ loans and their repayment records. This information is known as the credit report. Normally, the information is updated on immediate bases with the loan repayment records being updated on each following day with the respective licensed moneylenders.
Both lenders and borrowers are thus able to have a credit history containing all information on their active loans with any licensed moneylender at any given point in time. The information contained on the borrower’s credit report cannot be shared with any third party. The DP Information Group is in charge of this.
Who Has Access to The Credit Reports?
The credit report, similar to the report issued by the MLCB, gives a list of all existing loan amounts and credit card debts held with banks and other financial institutions. Only four parties have access to the information contained in the credit report: Licensed Moneylenders, Borrowers, the Ministry of Law, and the Registry of Moneylenders.
The licensed moneylenders access the credit report from the MLCB when the borrower applies for a loan. Licensed moneylenders also check on the report when the borrower has active loans with them. Borrowers, on the other hand, can retrieve their credit reports at any time at a small fee. The Registry of moneylenders and the Ministry of Law have access to the MLCB data in their servers. No unauthorized person can assess a borrower’s credit reports. So, you can be rest assured that your information is safe.
How Does the Credit Report Affect You as a Borrower?
The MLCB limits the number of loans that you as a borrower can access at a given time. Most people have the tendency of approaching several licensed moneylenders and accessing several loans simultaneously. While this might seem an intelligent thing to do at the time, the effects are adverse.
At the end of the day, most people find themselves in numerous loan debts, without knowing how to settle them. This doesn’t have to be the case. The MLCB provides financial cautiousness to lenders and borrowers to spend and borrow within their means. The centralized system assists the borrowers to keep track of their loans and know how to manage them.
In addition, licensed moneylenders can now use the Credit Bureau to calculate the risks involved in lending borrowers money before making a decision. Such information allows them to identify borrowers who are most likely to default their payments due to over-borrowing. In this case, they will turn down the borrower’s request during the application stage.
The same result is also reciprocated for borrowers who are always up to date with their loan payments. The credit report will reflect a good score on you. This means that your borrowing limit is increased and you can borrow a higher amount on moneylenders than your previous loans- isn’t this great? More reasons as to why you should always clear your debts on time.
The MLCB has had a huge positive impact on licensed moneylenders. Turning down requests from borrowers who are likely to default their payments has lowered their defaulting rate. This is translated to a decreased cost of running their systems. The licensed moneylenders can also use the credit records to keep track of their borrowers and check if they have acquired new loans.
Here is a list of all loan information captured in the credit report.
- The details of the borrower, including their names, Identification Number (ID) as well as Unique Entity Number (UEN).
- Details on all active loans that a borrower has with any licensed moneylender which is a member of the MLCB.
- Repayment standing, loan type and tenure, existing loan amount as well as the loan payable that every borrower has.
- All collaterals for the loans.
How to Check Your Credit Report
It is highly advisable for all borrowers to access their credit reports at least once each year. Doing so is a great way of preventing identity theft. You might also discover discrepancies in your credit score that would otherwise have a negative impact on you.
So, how do you access your credit score? Here is a step by step guide on how to do that.
- Visit the Singpass website and sign up for a new account to get your free voucher. If you already have an account, simply sign in.
- The next step is to fill in the personal information form.
- When done, you’ll be prompted to choose the credit report you would wish to access. Every borrower is entitled to one free report from the big credit-reporting agencies
- After choosing the specific report, you will be directed to the agency’s website. You will need to answer some questions so that the agency can verify your identity. Such information includes your phone number, county of residence, and credit card number.
- When all is done, you can now access your credit report.
The creation of the Moneylender Credit Bureau has resulted in a win-win situation for everyone- licensed moneylenders and borrowers. Licensed moneylenders can now worry less about running their businesses on losses while borrowers are less likely to default their payments. Borrowers have a regulated rate of taking loans preventing them from diving deep into debts.
The Singapore government has not only managed to reduce the menace between the two parties, but also establish a centralized system that oversees a smooth and transparent flow of activities in the loan and money business.
While the Moneylenders Credit Bureau has assisted many borrowers from acquiring more loans than what they can pay, many borrowers are yet to benefit from it. Borrowers are highly advised to seek financial assistance from Loan Advisor. They will help you compare and select the best loan option. Your financial management plays a huge role in your future success.
If you have any queries on Moneylenders Credit Bureau, feel free to leave your question below in the comment section. You can also contact us and we’ll be more than glad to respond. Borrow wisely!