KUALA LUMPUR: Malaysian credit-reporting agency, CTOS Data Systems, will collaborate with California-based Fair Isaac Corp (FICO) to roll out a FICO credit score to financial institutions early next year, according to a report by Wall Street Journal (WSJ) yesterday.
“Many lenders are concentrating on prime customers in Malaysia, but with this score, we are able to
allow more granularity of risk, so borrowers below that may get access to credit,” FICO Asia Pacific vice-president and managing director Dan McConaghy was quoted as saying in a statement.
CTOS was established in 1990 to enhance transparency and provide information to credit grantors.
Other credit reporting companies, such as TransUnion and Experian, are also collaborating with Malaysian companies to develop credit score that may be used as a standard to gauge risk in the industry.
The development is said to be significant for Malaysia’s economy as it enables lenders to more accurately assess their risks and make them more comfortable extending credit.
According to the WSJ report, the introduction of the credit score comes at a time when high debt loads have led Bank Negara Malaysia to take measures, such as raising the minimum annual income requirement to qualify for a credit card.
Bank Negara revealed that the household debt reached 86.8
per cent last year, an increase
from the previous year’s 80.5 per cent.