OBJECTIVES:

• What is a Credit Score?

• The importance of credit score;
• Body regulating credit rating here in the Philippines;
• What is a Credit Report;
• Credit Report vs. Credit Score
• Factors considering credit score;
• Ways how to improve credit score;

CREDIT SCORE

A CREDIT SCORE is a number rating that is used to assess your ability to meet your financial obligations,
such as paying back a loan. It allows financial institutions to determine the credit worthiness of an
individual.

Credit companies measure several factors including your credit payment history, the amount loaned or
credit utilization ratio, length of credit history, types of credit used, and new credit.
CREDIT INFORMATION CORPORATION

Credit Information Corporation oversees credit scoring in the country. Concurrently, banks resort to a
myriad of available private credit report providers to determine if an individual is eligible for a loan or
not.

The Credit Information Corporation can provide you your Credit Report as basis for the banks and other
financial institution of your credit worthiness.

CREDIT REPORT

A credit report is a summary of your financial transactions submitted to the Credit Information
Corporation (CIC). The CIC has the authority to gather and collate these reports under Republic Act
9510.

To know more about what a credit report and what are the functions of CIC, kindly visit their website
and FAQs.

https://www.creditinfo.gov.ph/

https://www.creditinfo.gov.ph/faqs

https://www.creditinfo.gov.ph/sites/default/files/Sample%20CIC%20Credit%20Report.pdf
To generate your credit score, there are four (4) a special assessing entity (SAE) who will process the
credit information of a particular individual upon request. The score ranges from 300 to 850.

ACCREDITED SPECIAL ACCESSING ENTITIES OR SAEs

1. CIBI Information, Inc.

2. Compuscan Philippines Inc.
3. CRIF Philippines
4. TransUnion Information Solutions Philippines
FACTORS CONSIDERING YOUR CREDIT SCORE

• Length of credit history - This includes the length of time you had credit. If you own credit cards,
they will average the age of your oldest card, your newest, and all other credit cards you hold.

• Payment history - This is made up of your level of responsibility when it comes to paying your
credit/loans on time. A missed payment can cost someone’s credit score to drop by 90 -100
points.

• Money owed - This includes the money you currently owe across several lending institutions
including the money you owe from credit cards. The bigger the amount you owe, the less likely
you get approved for new credit.

• Credit application - Whenever you apply for a credit or loan, you get flagged for opening a new
credit line. Thus, having multiple credit lines can affect your rating.

• Credit mix - These gauges the different types of credit accounts you own such as credit cards,
cash loans, car loans, and mortgag

e.
HOW TO IMPROVE YOUR CREDIT SCORE

• Build a good credit history early on by applying for a credit card a year after working for the
same employer. This allows you to be a responsible spender while learning how to pay your bills
on time.

• Avoid late or missed payments to maintain a clean record.

• Do not go over your credit limit not only to avoid getting a low score but also to skip paying
over-limit fees.

• Lower your debt/credit ratio, so you will not be stressed out in making payments on time.

• Avoid unemployment, since your ability to pay your debts depending on your job.

• Skip on having too many credit cards. If you fall heavily in debt, your score will be in trouble.

• Do not close cards with remaining balances, so there won’t be debts left unpaid.

CONCLUSION

Credit scoring is an essential way for lenders to find out if borrowers can pay back what they owe. It’s
also a good standard for those who plan to apply for a loan, so they can take care of their credit standing
and not fall into substantial debt. This helps borrowers become responsible for managing their finances,
mostly by paying the bills on time and never going over the limit. Keep in mind that a high score makes it
easier for you to apply for loans at banks and other financial institutions when you need them.