Understanding Credit Scores in Thailand | Credit Score Management

Credit scores are very important to your financial life and it is used by lenders to determine a person’s creditworthiness and ability to repay loans on time. Your credit scores will affect your ability to get approved for mortgages, loans, credit cards and other forms of credit as well as the interest rate you will be offered by lenders.

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How are credit scores calculated?

In general, credit scores are calculated based on many different factors of your finance, namely:

  • Payment History: Your payment history has a weightage of 35% of your credit score because it shows lenders if you usually pay your outstanding loans on time, how many times you skip payments and your payment pattern, which is how many days past the due date do you usually pay your bills. Every time you miss a payment or pay late, it will affect your credit score.
  • Amount owed: This has a weight of 30% and is basically the total amount of money you owe to lenders, as well as the percentage of the total amount you owe in relation to your credit amount. The lower the percentage, the better as it shows lenders that you do not max out your credit which means that you have liquidity and are more able to repay loans on time and not borrow over your limit.
  • Length of credit history: 15% of your credit score is based on the length of your credit history, the more good standing credit accounts you have for a longer time, the better your score for this will be.
  • Types of account you have: This is worth 10% of your credit score, and is basically determined by the type of account you have. If you have many different varieties of credit accounts such as home loans, auto loans, personal loans and credit cards then your score will be high.
  • Credit Mix: The last 10% of your score is your credit mix, so if you recently opened many different types of credit accounts then your score will be lower as it might indicate that you are undergoing some financial difficulty and it poses more risk to lenders. If you have credit accounts for a long time and no payment issues then your score will be higher in this category.

Advantages of good credit score

If you have a good credit score, then it will be much easier for you to obtain credit services such as personal, home and auto loans and credit cards as well so you can be more confident when applying for them.

With good credit, you will get lower interest rates as well as better terms on credit services which could end up saving you a significant amount if you borrow a significant amount.

You also get a better chance to get approved for a credit card, which is a big plus as generally, it is harder for foreigners to get one due to more financial requirements that must be met as compared to locals. You will also get better rewards and a higher tier of credit card with more perks for you to use. Furthermore, you can also easily apply for a higher credit limit since youve already proven your creditworthiness by having a good credit score. Your bank might also offer you a pre-approved loan, which could be useful as you do not have to wait for approval which could take a few weeks in some cases, you will be able to get the loan immediately without waiting for approval.

How to check your credit score?

If you want to check your credit score in Thailand, there are many ways that you can do that such as:

First of all you can simply request a report from your Thai bank, they will charge a fee of 150 baht per report. The report will come directly from the National Credit Bureau (NCB) within a week. 

You can also request for a credit bureau report from the self-service machines located at selected BTS skytrain stations, which will print out the report immediately or you can also request one to be sent to your email.

How to improve credit score?

In order to improve your credit score, you should pay your bills on time every month, and keep your credit utilization low, so that it shows you do not rely too much on credit and that you are a low risk for late payment. You should also consider paying off debts if possible so that lenders will be more confident to lend you money.

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