Did you know that Singapore has a central repository that contains information on all loan requests and repayment history held by all licensed moneylenders in the country?
The Moneylender’s Credit Bureau (MLCB) started its operations at the beginning of March 2016. Earlier this year the Singaporean Law Ministry released the news to the press saying that the creation of the MLCB would allow the legal moneylenders to have access to the creditworthiness of borrowers, and also be able to help borrowers avoid taking more debt beyond their means. Earlier than this, the credit records in the Credit Bureau did not include records of loans issued by licensed moneylenders in Singapore.
How The Moneylender CB works
Every one of the accredited moneylenders is a contributing member. The MLCB role is to offer licensed moneylenders with data that will help them calculate the creditworthiness of a potential loan applicant.
With the development of the Lender’s Credit Bureau, all accredited moneylenders have to give information on customers’ loans as well as their repayment records. This information is normally updated on an immediate basis and loan the repayments are frequently updated within the following day by the particular licensed moneylender.
This allows both the lenders and borrowers to make a credit history which will be containing the information on all your active loans with any licensed moneylender at a given point in time.
The Credit reference agency – DP Information Group (DP Info) was selected by the Ministry to develop and design the MLCB. Thus they are responsible for managing the day to day operations of the Credit Bureau.
The Information Captured In The Credit Report
Similar to the report issued by the Credit Bureau which gives a list of all credit card debts and existing loan amounts held with banks and other financial institutions, the credit history by MLCB will be including the following:
- All the details of all the active loans that a borrower has with any of the licensed moneylenders that are members of the MLCB as well as the repayment standing of each loan.
- The loan tenure and type, total existing principal loan amount and the total loan payable.
- The Borrower’s details, including their name and Unique Entity Number (UEN) or Identity (ID) Number
- Standing of a borrowers guarantor/collateral of any loans
This information can then only be accessed by both the borrowers and other accredited moneylenders when assessing a new loan application from potential borrowers. The cost for every credit record is 50 cents for the licensed moneylender while borrowers pay $1 for it.
How It Will Affect Me
For someone who is continually over-extended and also likes to approach several legal moneylenders in an attempt to access several loans, you no longer will be able to do so. This is, in fact, helpful for you as a borrower since it helps to promote greater financial cautiousness that spends as well as borrow within your means. With a centralized system, most borrowers are now able to use these credit reports to keep track and also better manage their loans.
For the licensed moneylenders, they are now able to utilize a borrower’s credit record to better calculate the risks involved in lending to them. More so, when it comes to those borrowers who are more likely to default on their payments because they have over-borrowed. In so doing, they now can disallow these borrowers of the loan during the application phase.
Through this system, accredited moneylenders can now lower the defaulting rate as they identify borrowers who are a menace. Therefore, the lower the cost of doing their business. Additionally, licensed moneylenders may also use these records to keep track of their borrowers who hold active loan contracts and see whether they have taken out any new loans.
Other Information To Take Note Of
You need to note that a borrower’s full amount payable is made up of outstanding sums from all their active loans as well as any loan amount that has been authorized in-principle.
Your total existing principal also shows every approved-in-principle loans even if the loan is awaiting final approval. Hence, if you were simply shopping around for suitable loans, you must inform the moneylender to discard your request so that the full outstanding amount can be revised as it will affect your credit record.
Additionally, borrowers who are concerned about security need not worry because the information is retained on secure servers that meet the market security standards.
Once requested, moneylenders are not to share or reveal to a third party the particulars of your credit report. Generally, they need to keep the loan request forms for 5-years as well regardless of the result of the request.
To correct or give feedback on any erroneous information in the credit record, borrowers can also contact the Bureau by submitting the online feedback form or email to (firstname.lastname@example.org). The Bureau then follows up with the particular moneylender(s) that gave the information and offer an update in three working days.
One thing you need to note if you are a guarantor or co-signer for a loan, it does show in your credit record because a guarantor or co-signer is legally responsible for any due loans of a borrower. But, credit cards and bank loans outstanding amounts and all transactions won’t be included in the report from MCLB as it only reflects loan and repayment data with licensed moneylenders only in Singapore.
Besides basic financial cautiousness in keeping the entire loan amounts and the number of loans manageable, you must repay the existing loans on time. This way you will improve your credit rating.
Borrowers can buy their Borrower Credit history online at MLCB’s website or visit any of the MLCB’s branches to get the report in person. Additionally, besides borrowers and all legal moneylenders, all the information included in the credit history can be accessed by the Moneylenders’ Registry and the Singaporean Law Ministry. Borrowers can now report any suspected misuse of the information by legal moneylenders to the Moneylenders’ Registry, by email (OneMinLaw@mlaw.gov.sg) or by telephone (18002255529).