Borrowing from licensed moneylenders can be a financial lifeline for many individuals, especially during emergencies. Yet, these lenders impose a borrowing limit, which is the total amount a borrower can owe from various moneylenders. Ever wondered how they monitor this? The answer lies in the Moneylenders Credit Bureau (MLCB). In this article, we will delve into the significance of the MLCB report, its working mechanism, and how it influences borrowers’ financial decisions.
Understanding the Moneylenders Credit Bureau (MLCB):
Established by the Ministry of Law (MinLaw) in March 2016, the MLCB acts as the central repository for loan information provided by licensed moneylenders in Singapore. Operated by Credit Bureau Singapore (CBS) as assigned by MinLaw, MLCB plays a crucial role in maintaining borrowers’ loan data.
The MLCB Loan Information Report:
Unlike traditional credit scores, licensed moneylenders do not solely rely on credit scores to assess loan applicants. Instead, they refer to the MLCB loan information report to evaluate creditworthiness and determine how much a borrower can borrow. This report helps lenders gauge an applicant’s capacity to repay and decide whether to approve the loan or not.
Essential Components of the MLCB Report:
- Personal Information: The report includes personal details such as name, address, birthday, NRIC number, or Unique Entity Number (for companies).
- Employment Details: Borrowers’ employment data, including employer details, employer address, monthly income, and CPF contributions, are featured in the report.
- Loan Records: The report provides insights into active loans, outstanding balances, repayment history, and loan defaults. Detailed loan information, including loan type, tenure, interest rate, late fees, and more, is available.
- Civil Judgments: Final court decisions related to overdue loans are recorded as civil judgments. These judgments significantly impact a moneylender’s decision.
- Exclusion Records: Borrowers can self-exclude from accessing personal loans, a record that’s also included in the report.
- Bankruptcy History: The report features any bankruptcy history, which can affect a borrower’s credit score for up to 10 years.
How Does the MLCB Report Impact Borrowers?
Borrowers are directly influenced by the MLCB report, as it plays a vital role in determining loan eligibility and borrowing limits. Licensed moneylenders strictly adhere to borrowing limits set under the Moneylender’s Act, and a borrower’s total outstanding balances from different moneylenders impact loan approval and amount.
Understanding Credit Rating:
The MLCB report feeds into a borrower’s credit rating, which is a four-digit number indicating the probability of default. This rating guides lenders in evaluating loan applications. A higher credit score enhances the chances of loan approval and better loan terms.
Accessing the MLCB Report:
The MLCB report can be accessed by licensed moneylenders, borrowers, the Ministry of Law, and the Registry of Licensed Moneylenders. Borrowers may request a copy to manage finances, check available limits, and monitor discrepancies.
Improving Credit Rating:
Improving your credit rating takes time, but responsible financial behavior can make a positive impact. Repaying loans promptly, avoiding multiple loan inquiries, and preventing loan defaults contribute to a better credit rating.
The Moneylenders Credit Bureau report plays a pivotal role in Singapore’s lending landscape. It ensures responsible borrowing, prevents overindebtedness, and helps both borrowers and moneylenders make informed decisions. Borrowers’ credit ratings are closely tied to the MLCB report, making it essential for maintaining a healthy financial profile. By understanding the significance of the MLCB report, borrowers can make informed financial choices and work towards better credit scores and loan opportunities.
At Avis Credit, we are committed to providing transparent and reliable financial solutions. Contact us today to learn more about the impact of the MLCB report and how we can assist you in managing your finances responsibly.
