| ARTICLE SUMMARY Six widely held credit score beliefs in Malaysia are factually incorrect and actively harm borrowers: checking your own score does not lower it, closing old accounts does not improve it, having no debt does not produce a good score, and paying only the minimum payment does not protect the CTOS score from utilisation-related damage. Each myth leads borrowers to take actions that suppress their creditworthiness rather than strengthen it. This article corrects all six with evidence drawn from CTOS published guidelines, CCRIS framework documentation, and Bank Negara Malaysia’s consumer education resources. |
Why Credit Myths Are So Durable
Credit scoring models are opaque by design. Banks do not publish their internal underwriting criteria, and the factors that determine a CCRIS record or a CTOS score are not intuitively obvious. Into this information gap, a persistent set of misconceptions has taken hold, many of which produce the exact opposite outcome to what the borrower intends.
Myth 1 — Checking Your Own Credit Score Reduces It
This is factually incorrect. Accessing your own CCRIS record through RAM Credit Information (RAMCI) or your CTOS score through the MyCTOS portal constitutes what is classified as a soft inquiry. Soft inquiries carry no weight within any lender’s assessment model. Only hard inquiries, generated when a financial institution formally processes a credit application on your behalf, are visible to other institutions and carry potential scoring implications.
The practical consequence: regular self-monitoring is a responsible credit management practice, not a risk.
Myth 2 — Closing Old Credit Card Accounts Improves the Score
This is one of the more counterintuitive realities of credit management. CTOS incorporates the average age of active credit accounts as a scoring factor. A long-standing credit card maintained in good standing demonstrates sustained credit management capability. Closing it reduces the average account age across the portfolio and may simultaneously increase the credit utilisation ratio if the total available credit limit contracts. Both effects suppress the score rather than improving it.
Myth 3 — Having No Debt Means Having a Good Score
Credit scores are constructed from evidence of responsible credit conduct, not from the absence of credit activity. A borrower with no active facilities, no loan history, and no credit card accounts is classified as credit invisible. Financial institutions cannot conduct risk assessment without data. This group typically receives either a decline or terms that reflect the absence of any track record. Building and managing credit responsibly matters even when borrowing is not immediately necessary.
Myth 4 — Paying the Minimum Keeps Your Score in Good Standing
Minimum payments prevent a missed payment entry from appearing on CCRIS, but they do not prevent a high credit utilisation ratio from suppressing the CTOS score. Carrying a balance close to the credit limit consistently, even while meeting minimum payment obligations, signals credit dependency to scoring models.
| Credit Limit | Balance Carried | Utilisation Ratio | Scoring Impact |
| RM 20,000 | RM 18,500 | 92.5% | Significantly negative on CTOS score |
| RM 20,000 | RM 10,000 | 50% | Moderately negative on CTOS score |
| RM 20,000 | RM 5,000 | 25% | Neutral to moderately positive |
| RM 20,000 | RM 1,500 | 7.5% | Positive scoring contribution |
CTOS guidelines suggest maintaining utilisation below 30 percent of the total available credit limit as an effective scoring strategy.
Myth 5 — A Single Missed Payment Will Affect You for Years
CCRIS retains repayment conduct records on a 12-month rolling basis. A pattern of late payments from 13 months ago no longer appears within your CCRIS record. CTOS retains more serious adverse information for longer periods, with bankruptcies recorded for 7 years from the discharge date, but a single historic missed payment from several years prior carries diminishing weight as a more recent clean record is established.
Myth 6 — Every Bank Uses Identical Credit Assessment Criteria
Every financial institution applies its own proprietary credit scoring model in addition to the shared CCRIS and CTOS data. Two applicants with identical CCRIS records can receive materially different decisions from the same lender depending on income level, employer category, relationship history with that institution, and the institution’s prevailing risk appetite. This is precisely why working with a financial advisor who understands individual lender preferences can improve outcomes without any change to the underlying credit profile.
Conclusion
Accurate credit knowledge is foundational to every successful loan application. To obtain a clear picture of where your credit score stands and what a targeted improvement strategy looks like for your profile, visit AE Finansure’s Credit Score service page.
| SOURCES & REFERENCES CTOS Data Systems — CTOS Score Explained https://www.ctoscredit.com.my/ctos-score Bank Negara Malaysia — CCRIS Frequently Asked Questions https://www.bnm.gov.my/ccris RAM Credit Information — How to Access Your CCRIS Report https://www.ramci.com.my Bank Negara Malaysia — Financial Consumer Education https://www.bnm.gov.my/consumer-financial-education |
