Stay on top of your Credit Health

Just as your physical health depends on your lifestyle choices, your credit rating is a reflection of your credit habits. To keep your credit score in good shape, it is important to check your credit report on a regular basis. However, improving your credit rating is not something that happens overnight, and requires commitment and perseverance.

In addition to breaking bad credit habits, regularly checking your credit report is essential if you are looking to improve your credit rating.

According to data from TransUnion 1 collected over a 12-month period, less than 15% of people who did not check their credit report saw an improvement in their credit rating, versus 34% of people who continuously monitored their credit report over a 12-month period.

Among people with Near Prime rating (Grade D, E and F), 57% saw an improvement in their credit score.

To stay on top of your credit report and identify steps for improving your credit rating, TransUnion recommends monitoring your credit report for at least 6-12 months.

People with an unfavourable credit score may encounter numerous hurdles at various stages of their lives:

Losing a job opportunity due to employee reference check
Losing a job opportunity due to employee reference check

After several rounds of tough interviews, John was offered a position as management trainee in bank industry, subject to satisfactory background checks. The human resources department subsequently informed him that his credit rating was inferior to other candidates, causing him to fail the recruitment process at the final hurdle.

Overseas rental application being rejected
Overseas rental application being rejected

Kary recently moved to Canada to start a new life. However, finding a place to live proved to be a challenge. After a long and time-consuming search, she managed to shortlist a number of places that were conveniently located and within her budget, but her applications were rejected due to her unfavourable credit rating.

Personal loans for renovation
Personal loans for renovation

After many years of unsuccessful applications, Tom finally received an offer to purchase a property under Hong Kong’s Home Ownership Scheme. With his mortgage guaranteed by the Housing Authority, he decided to apply for a personal loan from the bank in order to plan his interior decoration. However, after reviewing his loan application, the bank demanded a much higher interest rate due to his unfavourable credit rating, leaving him worried that he would not be able to decorate his new home.

To avoid headaches such as these,
it is important to stay on top of your credit health.

Improving your credit score requires patience and perseverance – just like your physical health, regular check-ups are required to monitor changes in your score. TransUnion’s credit report calculates your credit score based on your previous credit habits, and determines your creditworthiness using big data analytics.

Suggestions
Good credit rating
(Grade A, B or C)
Good credit rating 
										<br />(Grade A, B or C)
  • icon dot Grade A: Check your credit report on a regular basis to stay on top of your credit health.
  • icon dot Grade B or C: Check your credit history and identify steps for improving your rating. Monitor changes in your score for at least 6 months.
Unfavourable credit rating
(Grade D or below)
Unfavourable credit rating 
											<br />(Grade D or below)
  • icon dot Identify steps for improving your credit rating, and monitor changes in your credit score for at least 6-12 months.
  • icon dot If you have an unfavourable rating, you may need to monitor your score for a longer period, until you notice an improvement.

We recommend that you monitor your credit score for a period of 6-12 months in order to keep track of your credit health and identify areas for improvement. Specifically, you may:

  1. 1 Check your credit report at the same time each month

    To find out how your spending and credit habits affect your credit score, suggest to check your credit report at the same time each month and compare it with your report from the previous month. If your score is unfavourable or there is a downward trend, check for recent changes in credit activity and identify areas for improvement.

    TransUnion calculates your credit score using your personal credit data provided by our members on a monthly basis (i.e. credit providers, including banks and financial institutions). However, as the date on which this data is provided varies between members, so your score may vary on different days each month. We recommend checking your credit score at the same time each month to ensure a more preferable comparison.

  2. Why is it important to check your credit report at the same time each month?

    TransUnion calculates your credit score based on your latest credit records, so your score may vary if you check your report on different days each month.

    Example:
    1. Decide on which days of the month you want to check your credit report (e.g. 3rd, 13th and 23rd of each month).
    2. Check your credit report at the same time each month (e.g. 3rd, 13th and 23rd January; 3rd, 13th and 23rd February etc.).
    If you have two credit cards - one from bank A, and one from bank B:

    Bank A sends your credit data to TransUnion between 8th to 10th of each month.
    Bank B sends your credit data to TransUnion between 20th to 22nd of each month.
    Days on which you check your credit report Credit data used to calculate your credit score:
    3rd of each month Data sent by bank A and bank B up to and including last month.
    13rd of each month Data sent by bank A up to and including this month, and data sent by bank B up to and including last month.
    23rd of each month Data sent by bank A and bank B up to and including this month.

    Tips:
    A drop in your credit score is not necessarily a cause for concern. TransUnion members submit your credit data at different times each month, therefore your score may vary depending on which day you check your report. To ensure a fair comparison, we recommend that you check your score on approximately the same day of each month.

    However, in the event of a significant or continuous drop in your score, it is important to check your credit records in order to pinpoint the underlying causes and determine how you can improve your score.

    How can I improve my credit score?
    Click here for more insights.

    For example, if you checked your credit report on the 3rd of the previous month and then perform another check on 23rd of this month, there may be a significant difference in your score. As such, it is recommended to check your report on the same date each month and then identify steps for improving your score.

    For more advice on how to improve your credit score, check out How is your credit score calculated?

  3. 2 Avoid maxing out your credit card

    If you are planning to make a big purchase with your credit card, such as paying for tuition fees or purchasing an annual membership, it is a good idea to ask your bank to increase your credit limit.

    To keep your credit score in good shape, try not to exceed 30-50% of your credit limit per credit product and your total credit limit.

  4. 3 Use TransUnion’s credit monitoring tools

    TransUnion also offers a range of useful tools to help you keep track of your credit health:

    • Log in your TransUnion account and go to “Score Trending” to monitor monthly changes in your credit score.
    • Use the Debt Analysis function to ascertain your borrowing and repayment ability and plan your finances.
    • Before applying for or cancelling a credit product, use the Credit Score Calculator to find out how your decision will affect your credit score.

  5. 4 Check and verify your credit history and public records on a regular basis
    • Credit history: The information which you apply for a credit facility, you authorise financial institutions to send to TransUnion.
    • Public records: Information related to debt recovery litigation or bankruptcy proceedings, which may concern you. Public records are usually held by the courts, and may have an impact on your credit rating.

    Both your credit history and public records may contain errors. To prevent a negative impact on your credit score, remember to check on a regular basis and request any errors to be corrected.

How to request the correction of credit report?

As a TransUnion credit report user, you can request the correction of errors in your credit report or public records for free,
click here for more details.

Act Now to Improve your Credit Health!

Improving your credit score takes time and requires perseverance. The earlier you start, the better, so subscribe TransUnion’s Credit Monitoring Service now and plan your path to a better financial future!

1Remarks: From 1 September 2020 to 31 August 2021.

Transunion’s credit scoring takes into account a comprehensive set of credit and public record data to ensure that consumers are reliably and fairly represented with statistic support, while helping financial institutions manage risk appropriately. Financial institutions’ risk appetites may vary, and credit scores are among many factors that lenders take into account when it comes to extending credit. Transunion’s proprietary scoring algorithms, containing dozens of data attributes, is an analysis built upon decades of market experience, industry insights and expertise in Hong Kong and around the globe. The credit-related behaviours it analyses can trigger multiple attributes that affect a person’s credit score, subject to different situations. While building credit health is always attainable, it generally takes time and consistent healthy credit habits to see an improvement.

TransUnion