Loans: What is Credit Score, why is it important and how to maintain a good credit rating


Acquiring credit is an essential part of everyone’s financial journey. To some, it’s a way to get back on their feet while others use it as a means to attain good financial footing. It can serve many purposes be it an emergency or as capital for business opportunities.  


There’s a solid number of institutions that are more than willing to lend you the funds you need. These institutions size applicants up to see if they’re eligible to acquire a loan by checking their credit score. 


What is credit score?

Credit score is the number used to determine someone’s capability to manage debt. Credit companies measure several factors including your credit payment history, the amount loaned or credit utilization ratio, length of credit history, types of credit used, and new credit. 


In countries outside the Philippines, credit scores normally range from 350-800. The higher the score, the better chances you have to acquire a loan. Unlike other countries like the United States and Canada, the Philippines currently does not have a unified system of credit reporting. 


While there is no standard system of credit reporting, the Credit Information Corporation is in charge of credit scoring in the country. Concurrently, banks resort to a myriad of available private credit report providers  in order to determine if an individual is eligible for a loan or not. 


What are the factors considered in credit scoring?


  • Length of credit history - This includes the length of time you had credit. If you own credit cards, they will average the age of your oldest card, your newest, and all other credit cards you hold. 
  • Payment history  - This is made up of your level of responsibility when it comes to paying your credit/loans on time. A missed payment can cost someone’s credit score to drop by 90 -100 points.
  • Money owed - This includes the money you currently owe across several lending institutions including the money you owe from credit cards. The bigger the amount you owe, the less likely you get approved for new credit.
  • Credit application - Whenever you apply for a credit or loan, you get flagged for opening a new credit line. Thus, having multiple credit lines can affect your rating.
  • Credit mix - These gauges the different types of credit accounts you own such as credit cards, cash loans, car loans, and mortgage.


How can I maintain a good credit score?

Here are a few tips to follow in order to achieve and maintain a good credit score. 


  1. Avoid delayed and missed payments.Sign up for automatic payments so that monthly dues can be settled just in time for your deadline. 

  2. Stop going over your credit limit so that lenders won’t flag you for overspending. 

  3. Do not close credit cards that have a remaining balance. 

  4. Settle your existing loans/credit first before applying for a new one. 

  5. If you can, build good credit early.

Remember, getting a loan is a big responsibility, so do your best to stay on top of your loan and pay them diligently. A bad credit score may damage you financially and would stop you from acquiring new credit when you most need it. 


At CIMB Bank, maintaining a good credit score is rewarded. You can get up to 30% interest rebates on your Personal Loan just by paying your dues consistently and on time. Though the Loan Loyalty program, you can enjoy interest rebates from 10% up to 30%  every three months. If you’re a CIMB deposit account holder, all you need to do is to apply and get approved for a Personal Loan on or before August 31, 2020. Take a step toward your goals! 



Learn how you can apply for a Personal Loan using the CIMB Bank PH App:



Visit the link below to know more about our Loan Loyalty Program: 



Download the app to apply for our Personal Loan today!