Have you been late on your credit payments often? Be careful, this can mess up your credit score and make it harder for you to get more credit. Want to know how to fix it? Check out these tips to boost your credit score:

What is a Credit Score?

A credit score is a rating that shows how well a borrower can repay their loans. According to regulation 29/POJK.05/2014 on the Conduct of Financing Company Business, banking credit scores in Indonesia are divided into 5 categories, with 1 indicating smooth credit and 5 indicating bad credit.

The closer your score is to 5, the harder it is for you to get a loan. This score is something banks consider when deciding whether to give you any kind of loan.

For example, Deni wants to take out a motorcycle loan from a bank. However, because he was late in paying off a laptop loan from another financial institution, his credit score was 4. As a result, the bank is hesitant to give Deni any additional loans. So, make sure to keep your credit score in good shape.

How to Check Your Credit Score

‍

‍

There are two ways to check your credit score: offline and online. You can visit the nearest OJK office with your ID from Monday to Friday between 9:00 AM and 3:00 PM, except on public holidays.

If you can’t make it to the OJK office, you can also check your credit score online. However, online credit score checks have limited quotas for each session. If the session is full, you’ll get a notification with the schedule for the next session. Here’s how to check your credit score online:

1. Visit idebku.ojk.go.id.
2. Click on the “Registration” menu.
3. Enter your personal data and the captcha.
4. Click “Next.”
5. Upload the required documents.
6. Upload a selfie according to the provided instructions.
7. Check the box confirming the accuracy of your data.
8. You’ll receive an email from OJK with your registration number.
9. The credit score file will be sent the next day (1 business day).

How to Build a Good Credit Score

‍

‍

Want to build a solid credit reputation? Here are some tips on how to improve your credit score:

1. Get a Credit Card

Getting a credit card is the first step to building a good credit score. Why a credit card? Unlike typical bank loans, you can use this payment facility more frequently, which means more accurate and comprehensive data is collected to build your credit score.

Many people are hesitant to apply for a credit card because the process is known to be complicated and lengthy. However, you can now apply for a credit card online in today's digital era. Honest credit card is one provider you can try. You can apply through the Honest app in just 5 minutes with your ID.

2.  Pay Installments On Time

One of the most important things in building your credit score is paying your installments on time. If possible, don’t just pay the minimum on your credit card; pay it off entirely before the grace period ends to avoid accumulating interest.

This is crucial because your credit score largely depends on your discipline in repaying loans. The more disciplined you are in paying bills, the higher your credit score will be.

3. Use Auto-Debit Features 

To avoid forgetting, you can also pay your credit card installments or other bank loans using an auto-debit system. For instance, if you have a mortgage installment of Rp2,093,000, you can let the financial institution automatically deduct the amount from your savings account every month instead of going to the bank to pay it.

4. Avoid Using Credit for Unnecessary Purchases

These days, there are many types of credit. Besides bank credit like credit cards, personal loans (KTA), and mortgage loans (KPR), there are also paylater services and online loans (pinjol). To keep your credit score in good shape, use these payment options only for essential items you truly need. For example, buying a new laptop because your old one is malfunctioning and you need it for school, etc.

5. Don’t Overuse Credit Cards

Having too many credit cards can be a problem too. Apart from the high annual fees, managing multiple credit card payments can become a hassle. One or two credit cards should be enough, especially if the card you’re using has a high limit of up to Rp100,000,000 and can be used almost anywhere, like Honest. Try to keep your usage below 30% of the total limit.

What if You’re Already Behind on Payments?

So, what should you do if you’re already behind on many payments and are struggling to pay them off? If you are in this situation, immediately contact the bank or the credit service provider. If the bank sees that you genuinely intend to repay your debt, they might offer relief, such as an extended installment period or interest forgiveness.

Once your debt is paid off, you can then visit the OJK to request a BI Checking clearance by bringing a debt settlement letter from the bank. This way, you won’t have to worry about your next loan application being rejected.