The availability of online applications has made the process of getting a loan even easier in Singapore. Many money lenders have online platforms, where an application is submitted online and the loan is approved quickly, usually within the day.
This was working well until borrowers started borrowing huge amounts and failing to repay a few years ago, which increased the cost of doing business for licensed money lenders.
However, the Moneylenders Credit Bureau (MLCB) aims to rectify this. As a repository of borrowers’ data, the MLCB facilitates safe and responsible borrowing. This allows lenders to approve loans for borrowers who are less likely to default.
Keep reading to learn more about what is money lender credit bureau.
What Is Money Lender Credit Bureau?
As mentioned, the MLCB is a database of information on borrowers’ loans and repayment histories with licensed money lenders.
The bureau provides an avenue for licensed money lenders to assess the creditworthiness of borrowers. By reviewing a borrower’s MLCB or moneylender report, a licensed money lender can decide whether to approve his or her loan application.
The MLCB was initiated on 1 Mar 2016 after a review of the licensed moneylending sector in Singapore. It aims to protect borrowers from overleveraging.
The Ministry of Law (MinLaw) appointed credit reference agency DP Information Group (DP Info) in 2016 to head the development and operations of the MLCB.
However, in 2021, MinLaw designated Credit Bureau Singapore (CBS) to be in charge of MLCB’s operations from 1 Jul 2021 under a three-year contract, after which MinLaw will review the contract.
According to MinLaw, the transition from DP Info to CBS is only administrative and will not affect services rendered to borrowers and lenders.
How Does the Moneylenders Credit Bureau Work?
The MLCB is a database where licensed money lenders can regularly update borrowers’ loan information. When enough credit information has been updated, a credit report is generated for each borrower.
As we will later discuss, this MLCB report records a borrower’s active loans with money lenders.
The information helps licensed money lenders gauge a borrower’s creditworthiness based on his or her loan history.
What Is Included In A Loan Information Report?
The MLCB loan information report includes information about you and the licensed money lenders you have worked with. This includes:
- The loan type, its tenure, the principal amount, and the amount payable
- Information on each active loan the you have taken, including the repayment status
Other details found on the report are:
Personal Details
These comprise fundamental details from your public records, such as your name, address, and NRIC number.
Account Details (For Accounts Under Seven Years Old)
This information includes the account’s opening and closing dates, current balance, remaining debt, and payment history.
Public Records
Besides your name, these public records account for all records made against you such as civil judgements and bankruptcies. Some of these records can be removed from your report by a court order or upon request by a debt corrector.
Civil judgments refer to cases brought by creditors, lenders, or collection agencies to recover overdue debts. Other judgments include those relating to unpaid alimony and child support.
Note that if you file for bankruptcy multiple times, each filing will be present in your MLCB report for 10 years.
Credit Score
Your credit score is a four-digit number that summarises all the above information. A high number indicates a low risk to lenders, while a low number means you have a high risk of defaulting on a loan.
Later, we will examine how your credit score affects your borrowing ability.
Each loan you take from a licensed money lender will be included in your report. However, some types of loans are not recorded, such as:
- Student loans or grants repaid before the due date
- Mortgages from building societies and banks
- Personal loans from friends and families
Who Can Access The Report?
The MLCB report is accessible to you and all licensed money lenders in Singapore. The Ministry of Law and the Registry of Moneylenders can also access the reports on their servers.
Accessing your moneylender report can help you better track and manage your loans. For a money lender, accessing your report allows it to make more informed decisions about your loan applications. The report also serves as a way for a lender to track all its active loan contracts with you.
In general, the report allows a lender to avoid lending to you beyond your means so it can reduce its default rates and cost of doing business.
Lastly, the information stored in the database is safe, secure, and not shared with unauthorised third parties.
How And When To Check The Report
To check the credit report, follow these steps:
- First, you’ll need to have Singpass. If you don’t, visit the Singpass website and create an account.
- Sign in and fill up your personal information form on the Singpass website.
- Choose the credit report you wish to check – in this case, the MLCB report.
- You’ll be redirected to the MLCB website. Enter your phone number, country of residence, and credit card number to verify your identity.
- Once that is done, the report will be available for you to check.
It is recommended that you check your report at least once a year. This will help avoid cases of identity theft and rectify any errors that may be in the report.
In addition, as a borrower, you’re entitled to a free report from major credit-reporting agencies in Singapore such as MLCB.
How To Get A Copy Of The Loan Information Report
A borrower or money lender can purchase a copy of the loan information report from the Moneylenders Credit Bureau website or at the Credit Bureau Singapore office.
The borrower and lender will be charged $1 and $ 0.50, respectively, for one credit report.
How Often Is The Report Updated?
Your moneylender report is updated regularly when new information is entered, which refreshes the credit score in CBS. According to the Moneylenders Credit Bureau, this can happen daily, weekly, or monthly, depending on the lender.
How Does The Report Affect You As A Borrower?
The MLCB report acts as a management tool that can help you keep track of and manage all your loans. It also affects your:
Loan Approval Chances
As stated earlier, the report allows lenders to assess your creditworthiness. Some borrowers tend to borrow from multiple lenders at a time. While this may help them get a high loan amount in total, it is unsettling for money lenders.
Overborrowing results in a potential risk of default as you are unlikely to repay all the loans.
In the long run, such behaviour red-flags your report and credit score. This may lead to your future loan applications being rejected.
It is crucial to work with a reputable licensed money lender like CreditMaster that can offer reasonable interest rates.
Remember, only borrow what you can repay on time. Avoid defaulting when dealing with a licensed money lender as it will negatively affect your MLCB report.
Loan Limit
The credit report also acts in your favour as a vote of trust. However, this is only possible if you maintain good borrowing behaviour.
Lenders will view you as less of a risk if you consistently pay your loans on time without any hitches.
As a less risky borrower, you can increase your loan limit. This means that if you repay your loan on time, the amount you can borrow on the next loan might be higher than what you obtained previously.
So rather than borrow from multiple lenders, why not stick to a single lender and build a good credit score with them?
The MLCB Report Is Useful To All
Knowing what is money lender credit bureau gives you an upper hand. With the report, you can easily track and manage all your loans, and avoid defaulting and overborrowing.
You can also work to build a good credit score that will increase your loan limit and ensure your loan applications are approved in future.
Do you need a loan from a licensed money lender in Singapore that you can trust? If so, apply for a loan with CreditMaster.
We offer loans with flexible repayment terms tailored to meet your needs. Contact us now to find out more.
