5 Ways to Maintain Credit Collectibility Score to Stay at 1
5 Ways to Maintain Credit Collectibility Score to Stay at 1
One of the important documents in the banking world is credit collectibility. Why is it so important? Because it relates to an individual's credit status. If the bank knows someone's credit collectibility score, it becomes easy for the bank to recognize the character in managing funds, especially when it comes to loans from the bank.
When you understand how important credit collectibility scores are, you need to maintain a good score. So, how do you maintain this score to stay at 1? Brick will help explain it, starting from understanding credit collectibility, regulations, status, and how to maintain it.
Understanding Credit Collectibility
In general, credit collectibility is an individual's track record in repaying or settling their loans. From this score, financial institutions, in this case, banks, can easily determine whether the individual is eligible to get a loan again or not.
So, in broad terms, if someone has a good score, it will be easy to get a loan from the bank. Conversely, if they have a poor score, it will be difficult to apply for any loan.
Each individual will not manipulate this data because it has been well recorded by the Financial Services Authority through the Credit Information Service (SLIK). This data and records can only be accessed by OJK employees or related financial institutions.
Regulations on Credit Collectibility
After understanding the meaning of credit collectibility, you need to know the regulations in Indonesia. These regulations are permanent and cannot be changed unless there are changes from Bank Indonesia. In the regulations listed in Bank Indonesia Regulation No. 7/2/PBI/2005 concerning the Assessment of Bank Asset Quality, there are three factors that determine credit collectibility scores:
- Debtor Performance
If the performance of a debtor is good, meaning they can cooperate with banking institutions, their score will be good. This is also seen in how a debtor's business progresses. - Debtor Business Development
The second factor that determines the bank's score is the debtor's business development. How the current condition and situation, along with future estimates, are seen. - Ability to Repay Loans
The last factor in determining the debtor's score is the ability to pay. This can be seen from document transparency, data accuracy when filling out forms, and the ability to repay loans according to applicable rules.
Credit Collectibility Status
There are five levels that banks use to score borrowers:
- Current
If the debtor can pay on time, without any obstacles or hindrances, they will be categorized as "Current." The appropriate score for this debtor is one (1). - Special Attention
If the debtor experiences problems, such as arrears within 1-90 days, they will fall into the "Special Attention" category. They will get a score of two (2). - Less Current Credit
Perhaps only lucky people can get a loan when still in the "Less Current Credit" status. Because the bank will always be aware of people with a credit score of three (3) and arrears ranging from 91-120 days. - Doubtful
There is a special note if someone gets the category "Doubtful." The bank will doubt when a debtor with this category applies for a loan. Especially if the arrears range from 121-180 days. - Bad Debt
If a debtor with a score of four already finds it difficult to get a loan, the same applies to a debtor with the "Bad Debt" category. They will get a black mark from the bank and definitely will not be given a loan.
Maintaining Credit Collectibility Score 1
The best situation desired by debtors is to be in the "Current" category. However, this may not be easy, especially considering the often volatile economic conditions. To remain in this category, there are 5 ways to maintain your credit score at 1:
- Maintain monthly limits so as not to be extravagant.
- Do not be excessive when using credit cards.
- Aim for loan values not exceeding 30%.
- Apply for a loan only in urgent situations.
- Be disciplined in paying installments and avoid defaulting.
When you understand the meaning, regulations, status, and how to maintain a credit collectibility score, you can apply for a loan for business purposes. If you work in a financial institution, then checking the credit score of potential borrowers is important. Use Brick to connect with digital financial services. Utilize loan service solutions from Brick to make the verification process easier and faster. ***
