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If you've applied for a credit card, mortgage or personal loan, your lender has probably reviewed your credit report as part of the approval process.

Credit reports contain information about an individual's background and credit history. Credit agencies gather data about your credit history from their members (such as banks and finance companies), then make that information available to banks and other lenders when they are reviewing your loan or credit application.

How do credit reports work?

Credit agencies keep track of your personal information; information about your credit accounts including your current credit usage and your repayment history, public records such as litigation relating to debt recovery, bankruptcy and winding-up petitions; and a list of members that have reviewed your report within the last two years.

Your credit report also contains a credit score, which is a numerical snapshot of your credit report at a particular point in time. If your credit history shows you have a solid bill payment history and low non-mortgage debt, your credit score will give lenders confidence when approving your loan application. A low credit score may result in higher interest rates or denial of the loan/credit application.

In Hong Kong, the sharing of consumer credit data by credit agencies is governed by the Code of Practice on Consumer Credit Data issued by the Office of the Privacy Commissioner for Personal Data. Know your rights to understand more about the handling of consumer credit data.

Maintaining a good credit score

Your credit report - and credit score - are a reflection of your overall credit history. To maintain a good credit score:

  • Review your budget and current finances, check if you can afford to borrow and how much you can afford repayments
  • If possible, pay all your bills each month on time, every time. Missing payments, making late payments, debt collection and bankruptcies can have a negative impact on your credit score.
  • Avoid over-borrowing and borrowing more than you can afford. Manage your debts responsibly and effectively.
  • Check your credit card statements for unauthorised transactions or other signs of identity theft. Cancel unused credit cards.
  • Review your credit report to find out what it says about your financial health. There may be a fee to obtain your credit report.
  • Inform your lender if you're having difficulty in repaying debts, they may be able to work with you on a repayment plan.

Consequences of having a bad credit history

If you don't pay your bills on time, or have excessive debts, these factors will be recorded in your credit report. If you have a poor credit history, banks and other lenders may impose higher interest rates or decline your loan or credit application, you may also have difficulty in applying for a mortgage or a credit card in the future.

Read more about guide to responsible borrowing and commercial credit reference agency for Hong Kong.