How to monitor and improve your credit score in Hong Kong

14 January, 2016

Did you know that if you’ve ever had a credit card or another line of credit, you have a credit score in Hong Kong? Well you do! The TransUnion provides a credit report for all HKID card holders with a line of credit.

For those who aren’t familiar, that credit score can be extremely influential - it’s indicative of your past repayment history, after all. The same way we check our BMI and various health measures to see that we are healthy, the TransUnion credit report is a monitor of your financial health and is an indicator to lenders about your financial reliability.

At Monexo, we think both kinds of health (financial and physical) are important to keep track of.

Why do you need to monitor your credit report?

 

As the TransUnion puts it on their website, “monitoring your credit is like having regular check-ups at the doctor. You don’t want to find out that something’s wrong when it’s already too late.”

Acquiring your credit score

 

There’s no excuse to not know your credit score - it’s available online! For HKD260, you can order a one-time report online via the TransUnion website at www.transunion.hk. TransUnion also offers a credit watch option - for HKD280 per month, you have unlimited updated access to your credit score.

The TransUnion Credit score offers a letter grade that mirrors your repayment reliability. For example, someone with a grade A is an exceptional borrower, while someone with a grade of H is more risky. The credit score is generated using such metrics as payment history, outstanding debt, credit account history, recent enquiries, and public records.

5 Tips to improve your credit score

 

1. Always pay credit card bills on time.

Late bill payments are the first to bring your credit score down. When you pay interest on a late credit card payment, it’s costing you a whopping 34% in Hong Kong!

Monexo offers personal loan rates anywhere from 7-24% - if you have already run yourself into a cycle of late bills, think about consolidating your debt with us, which is discussed more below.

2. Monitor your credit report

This is important to detect any inaccuracies in your report, including any security or identity theft issues that might be harming your score.

Sometimes a bank might issue you another credit card, but it gets lost in the clutter or you weren’t aware. That could affect your credit score without you knowing! Only those credit facilities that you are actually using should be calculated in your score.

3. Take on debt responsibly

Ask yourself a few questions before you borrow money. What are you borrowing the money for and what is the exact amount you need? Is there a better way to raise the capital than taking a loan?

Make sure you have a budget. Understand how much you will be devoting to future repayments, and how you can manage that. Don’t borrow more than you can afford to repay and leave room for potential fluctuations in interest rates.

With proper planning, you will avoid having huge credit balances that hurt your financial well-being.

4. Maintain a strong credit history

Time is a big factor when improving your credit score - it can’t happen overnight. People need to see that you are reliable with your repayments over a lengthy period of time - making one payment on time will make no difference to your score if you miss the following one.

5. Avoid taking too much credit and consolidate debt

The more credit lines you open, the harder it will be to remember and make all those various repayments. In fact, consolidating debt will not only allow you to make just one payment each month, but you can potentially refinance at a cheaper interest rate.

As a peer to peer lending platform, Monexo has lower operational costs than a traditional financial institution and can offer favorable interest rates on loans. We have been able to help many of our customers consolidate their debts into a cheaper loan on our platform.

Being vigilant of your financial health is important. There’s more people out there that might judge you on your financial habits than you know, but if you stay ahead of the game, you can always make sure you have an attractive credit score.