For years HSBC would neither give me a credit card nor tell me why not. So I got one from Bank of China and forgot about it. Not long ago HSBC had changed tack and were bombarding me with credit card offers. I asked what had changed, why was I no longer persona non grata? After a lot of muttering “cannot”, I persuaded someone to read what it said on the Bank computer screen about me to me. He said that 20 years previously I had left Hong Kong for a period of time, leaving an unauthorised overdraft of HK$20. Why had they never told me? I got a blank stare. If credit information company TransUnion had been around back then, I could have found out long ago.
TransUnion has been keeping records on 4.8 million consumers’ credit ratings in Hong Kong for a decade now. They compile credit reports based on data received from its members: banks, finance companies and public sources of information. Importantly: consumers can order a copy of their personal credit report directly from TransUnion, which is invaluable if you are thinking of applying for a mortgage or loan. Members of TransUnion – banks and lenders - can access and review their customers’ credit reports before approving new loan applications or extending credit, working within the Consumer Credit Data rules issued by the Office of the Privacy Commissioner for Personal Data.
Monitor your credit health
A healthy credit history is key to getting a loan, higher credit limits and better interest rates. The credit report gives your credit score, credit record and alerts you to potential identity theft and credit fraud. You can spot suspicious changes that could mean fraud, as well as any errors. With identity fraud on the rise, it is important to keep an eye on all this. You can also check that your personal information including name, Hong Kong ID, passport, date of birth, current and previous addresses and telephone numbers are correct.
It will also tell you your repayment history, credit limits and outstanding balances and hire-purchase information. Also, you’ll get access to public records such as debt recovery action and bankruptcy details.
Check who’s been checking
Importantly, you can also check who has reviewed your credit report within the last two years. Scores range from A to J, and are generated by a mathematical formula based on payment history, outstanding debt, credit account history, recent enquiries and public records. It provides lenders with an objective standard for assessing credit applications.
Your credit score isn’t fixed: it changes when data in the credit report changes. But it’s only one of the pieces of information used by credit providers in credit assessment. Lenders also consider their own risk acceptance level when lending and the applicant's demographic and financial information, before deciding whether to grant credit.
How to improve your credit rating
First, TransUnion advises that you monitor your credit record closely to ensure that you are in a good credit standing or else, take action.
It helps greatly to make repayments punctually. Repay loans on time each month. Late payments, collection and bankruptcies have the greatest negative effect on your credit score.
Check your credit reports often and if you spot any mistakes, contact the credit provider immediately.
Keep your credit card account balances well below your available credit limits, TransUnion advises. Responsible debt management plays a key role in your financial well-being.
Also, it’s important to establish a strong credit history. Time is one of the most significant factors in improving your credit health. Establish a good history by paying bills on time.
Avoid applying for too much credit. It seems several new applications in a short time may cause you to be perceived as having high credit risk.
And finally, remember that multiple personal enquiries (that is, requests of your own credit report) do not affect your credit score.