Customers With High Credit Scores 5X More Likely To Get Loan Approved

Credit reporting agency CTOS has released a summary of a recent study regarding the connection between credit scores and applications for loan financing.

Using a sample of over 250,000 applications for financing within one month of the MyCTOS Score report being checked, the study highlights the disparity in loan approval rates between the various CTOS score
categories.

Credit score role in credit application approvals

According to CTOS, the study revealed that consumers with an ‘excellent’ CTOS score, were five
times more likely to have their credit applications approved, compared to those with the
lowest CTOS Scores.

Following are the key findings reported by CTOS:

• Consumers with an ‘excellent’ CTOS Score are 5 times more likely to have their credit applications approved than those with the lowest scores.
• For auto loans, consumers with excellent scores had a 74% approval rate, while those with poor scores had only 9%.
• For mortgages, high credit scorers enjoyed 61% approval, compared to just 22% for those with the lowest scores.
• The largest disparity was seen with credit card applications: consumers with excellent scores had a 76% approval rate, while those with poor scores had only 10%.

Access to credit is a necessity today

“It is well known that better credit scores equate to higher approval levels, however this is the first time that we have been able to quantify this with real data,” said Erick Hamburger, Group CEO of CTOS Digital Berhad.

He added that access to credit enables people to meet everyday needs like housing and modes of transport, and improves their standard of living.

“It should also be noted that a better credit score does not only increase credit application approval chances, but also gives borrowers access to better interest rates, and better rewards, making it cheaper for consumers to borrow funds both in the short and long term,” he highlighted.

How to read the MyCTOS score

According to CTOS, the score they provide is made up of 5 factors, namely payment history, amount owed, credit history length, credit mix and new credit application.

All these factors are taken into account in generating the 3-digit number of the CTOS score. This 3-digit number which ranges from 300 to 850 uses a number value to represent a person’s credit worthiness.

The CTOS score band range is shown below:

For more information, visit http://www.ctoscredit.com.my/.