6 Ways to Improve Your DSR & Credit Ratings

Excerpt from the Waves, Vol 3, 2017


There's nothing more devastating than getting your loan approval rejected by the bank to buy your first home. Most applications tend to get rejected due to the applicant's low DSR (Debt Service Ratio) and Credit Ratings that they are not aware of. So, we've compiled 6 ways for you on how to improve your credit score with these easy steps!

1# Reduce your total debt

Clear off as much debt as you can and do it as soon as possible. This includes all types of bank and non-bank debt.

We've taken the liberty of making this mind map for you. You can thank us later.

High credit card balances and outstanding PTPTN loans can attribute to high DSR rates. For example, if you fail to pay back your PTPTN loan, you can be in danger of getting blacklisted on the CCRIS (Central Credit Reference Information System) list and rejected by banks.


Do not take for granted repayments of non-bank debts as banks will look at these repayments in the same way as other bank debts. This will be reflected in your CCRIS & CTOS records as explained below.


2# Keep a good credit score/history

Your credit history will be an indicator and proof to banks whether you are a good paymaster or at risk of defaulting/missing loan repayments.


3# Keep low credit card balance

Having a high balance can look bad- banks will question why you have a lot of debt in the first place and it can imply that you are not managing your personal finances responsibly.


4# Show that you have savings

Banks like people with savings. Individuals with savings are considered to be at low risk of defaulting payments as they are able to show that they have sufficient finances to fall back on. This includes all types of fix-deposits, funds bonds, etc.


Keep all your documentation up-to-date when submitting your loan application. Loans can still be rejected if you do no present the necessary documentation.


Onga Bunga more capital. Source: 20th Century Fox

5# Combine Incomes

Another way to improve your DSR is to increase your net income by combining your income as "joint purchasers" with a spouse or partner in your loan submission. Be sure that both of you fully understand your individual legal rights to the property as joint-purchasers.


6# If you don't have a credit record, start one now

Not having a credit history can be just as bad as having a poor credit record. Banks are very likely to reject your application if they do not have any form of proof to support your ability to make repayments.


This is especially true for graduates or first-time loan applicants. Get started by applying for a credit card, keep your balance low and pay in full every month. If you can't make the full payment, try to pay as much of the balance as you can.


At Seri Pajam, we provide a wealth of tools to aid your journey to buy your first house. Drop by our website to check out our Buyer Guides or alternatively, you can contact us for 1-to-1 consultation on how to buy your first home today.

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