How to Improve Your Business Credit Score for a Loan in Malaysia (2025)
A good business credit score is crucial for securing business loans with favorable terms in Malaysia. Lenders, including banks and financial institutions, assess your business credit score to determine the risk of lending to your company. If your score is low, you may face loan rejections, higher interest rates, or lower loan amounts. This guide provides detailed steps to improve your business credit score for better loan approval chances.
1. What is a Business Credit Score in Malaysia?
A business credit score is a numerical rating that reflects your company’s creditworthiness. Banks and financial institutions refer to two main sources for credit evaluation:
- CTOS Score (Credit Tip-Off Service) – Ranges from 300 to 850, with a higher score being better.
- CCRIS Report (Central Credit Reference Information System) – Maintained by Bank Negara Malaysia (BNM), showing your loan repayment history.
📌 Key Rule: The higher your business credit score, the better your loan approval chances and the lower the interest rates.
2. Why is a Good Business Credit Score Important?
✅ Easier Loan Approval – Banks prefer businesses with good credit history.
✅ Lower Interest Rates – A high credit score leads to better loan terms.
✅ Higher Loan Limits – Lenders offer larger financing amounts to businesses with strong creditworthiness.
✅ Better Business Opportunities – Suppliers and partners trust businesses with good financial health.
3. Factors That Affect Your Business Credit Score
To improve your score, you must understand what impacts it:
3.1 Payment History (35%)
🔹 Consistently paying loans, credit cards, and supplier invoices on time boosts your score.
🔹 Late or missed payments lower your credit rating.
3.2 Credit Utilization Ratio (30%)
🔹 Using too much of your available credit (e.g., maxing out business credit cards) reduces your score.
🔹 Keep credit utilization below 30% of your total credit limit.
3.3 Length of Credit History (15%)
🔹 Older businesses with long-term financial records have higher creditworthiness.
🔹 New businesses need time to build a solid credit history.
3.4 Types of Credit Accounts (10%)
🔹 Having a mix of credit (e.g., business loans, credit lines, and supplier credit) improves your score.
🔹 Relying only on short-term loans or cash advances may lower your rating.
3.5 Number of Credit Inquiries (10%)
🔹 Frequent loan applications or credit card requests may reduce your score.
🔹 Too many inquiries make lenders think you’re desperate for credit.
4. Steps to Improve Your Business Credit Score in Malaysia
4.1 Pay Your Bills & Loans on Time ⏳
✅ Always pay loans, credit cards, and invoices before the due date.
✅ Set up auto-payment for recurring bills.
✅ Avoid defaulting on any loan.
💡 Tip: If you missed a payment, pay it as soon as possible to reduce damage to your score.
4.2 Reduce Credit Utilization 📉
✅ Keep your credit usage below 30% of the available limit.
✅ Avoid maxing out business credit cards or overdrafts.
✅ Request for higher credit limits (but don’t use it all) to lower utilization.
💡 Example: If your business credit card has a RM50,000 limit, don’t use more than RM15,000 at any time.
4.3 Check Your CCRIS & CTOS Reports Regularly 🔍
✅ Request a free CCRIS report from Bank Negara Malaysia (BNM) via https://eccris.bnm.gov.my.
✅ Check your CTOS score at https://www.ctoscredit.com.my.
✅ Dispute errors in your report if you find incorrect negative records.
4.4 Establish a Business Credit Profile 🏦
✅ Register your business with SSM (Suruhanjaya Syarikat Malaysia).
✅ Open a business bank account under the company name.
✅ Apply for a business credit card to build credit history.
💡 Tip: Avoid using personal credit for business expenses, as it does not improve your business credit score.
4.5 Diversify Your Credit Portfolio 🏗️
✅ Use different types of credit (e.g., term loans, trade credit, credit lines).
✅ Avoid depending only on one type of financing (e.g., overdrafts or payday loans).
✅ Build a strong supplier payment history for better trade credit terms.
💡 Example: If your business only uses short-term loans, consider getting a business credit line to improve your credit mix.
4.6 Avoid Too Many Loan Applications in a Short Period ❌
✅ Space out loan applications to avoid too many credit inquiries.
✅ Apply only for necessary loans that your business can handle.
💡 Tip: If rejected, wait at least 6 months before reapplying to avoid damaging your credit score further.
4.7 Negotiate With Creditors if Facing Financial Difficulties 📞
✅ If struggling with payments, contact your lender early to negotiate a repayment plan.
✅ Banks may offer loan restructuring or lower interest rates.
💡 Tip: Avoid defaulting, as it stays on your credit record for years.
5. How Long Does It Take to Improve a Business Credit Score?
🔹 Small improvements (e.g., paying overdue bills) – 1 to 3 months
🔹 Moderate improvements (e.g., reducing credit utilization, making timely payments) – 3 to 6 months
🔹 Major improvements (e.g., removing defaults, long-term good payment history) – 12 months or more
✅ The earlier you start improving your credit habits, the faster you can qualify for loans with better terms!
6. Best Loan Options for Businesses with Good Credit Scores in Malaysia (2025)
| Bank/P2P Lender | Loan Type | Amount | Interest Rate | Repayment Period |
|---|---|---|---|---|
| Maybank SME Loan | Term Loan | RM50k – RM5M | 4% – 7% | Up to 10 years |
| CIMB SME Quick Loan | Unsecured Loan | RM50k – RM500k | 5% – 9% | Up to 7 years |
| RHB BizPower Loan | Working Capital | RM100k – RM3M | 4.5% – 8% | Up to 7 years |
| SME Bank Financing | Government-Backed Loan | RM50k – RM1M | 2% – 6% | Up to 10 years |
| Funding Societies (P2P Loan) | Alternative Financing | RM10k – RM500k | 8% – 18% | 1 – 5 years |
📌 Tip: A higher credit score makes it easier to secure low-interest loans with flexible repayment terms.
7. Final Takeaways
✅ Pay bills on time and reduce credit utilization.
✅ Check your CCRIS and CTOS reports for errors.
✅ Diversify your credit sources (term loans, trade credit, credit cards).
✅ Avoid applying for too many loans in a short time.
✅ Negotiate with banks if struggling with repayments.
A strong business credit score opens doors to better loan options and lower interest rates. Start improving yours today! 🚀
