According to the Law of the Republic of Kazakhstan "Credit Bureaus and Formation of Credit Histories", credit bureaus provide not only a credit history itself, but also a personal credit rating – an equivalent of a bank scoring.

Personal credit rating is a score that is automatically calculated by a credit bureau based on credit history records and other personal data of the borrower. The borrower can find out his rating to assess the likelihood of loan approval.

The rating is influenced by a lot of factors, including:

• presence of delays,
• number of active loans,
• transfer of debts to collectors, etc.

Personal credit rating has an informational nature, and even a high score does not always guarantee loan approval. Banks and microfinance organizations (MFOs) use different scoring models, including their own algorithms.

How does a credit rating affect raising a loan from a bank?

Credit rating allows to assess integrity and reliability of the borrower. The higher the rating, the lower the credit risks, and the higher the probability of loan approval.

Personal credit rating also helps control the debt burden. To avoid default, it is important to:

• reduce the debt level,
• close especially zero credit cards,
• avoid delays,
• look for extra income sources.

Can banks and MFOs refuse a loan due to a low credit rating?

If the borrower has a low credit rating, banks and MFOs have the right to refuse to issue a loan.

A credit rating is important because it reflects financial reliability of the borrower and is formed based on history: presence of delinquencies, volume and frequency of debts, debt burden, legal and collection cases.

Before issuing a loan, financial institutions have to assess client's solvency – this is a requirement of the law and the Agency for Regulation and Development of the Financial Market of the Republic of Kazakhstan.

A low rating means a high risk of non-repayment, and the lender has every right to refuse to issue a loan. According to the Law of the Republic of Kazakhstan "Credit Bureaus and Formation of Credit Histories", these bureaus can be used when making a credit decision. However, issuing a loan is not an obligation, but a right of the creditor. Even in the absence of delays, the bank may refuse if it considers the risk is too high.

How to improve your credit rating?

Repay loans on time: it is better to make a payment 5-7 business days before a write-off date.

If there is an opportunity for early repayment, use it. However, make sure that the bank has correctly recorded the early repayment. Ask for a certificate of full repayment of the loan.

Do not hide from creditors if a delay occur. Since 1 October 2021, a single legal regime for settling problem debts has been in effect in Kazakhstan

How to check your credit rating?

A citizen of Kazakhstan can get their credit rating once a year free of charge. This can be done in the following ways:

1. Via the eGov.kz portal.
2. Via website or application of First Credit Bureau (1cb.kz)
3. Personally (offline): you can contact:

State Credit Bureau JSC (SCB)

First Credit Bureau LLP (FCB),

PSC or Kazpost office.

You must have an identity card with you. If this is the first request in a current year, the report is issued free of charge.

Source : https://www.gov.kz/memleket/entities/ardfm/press/news/details/1091644?lang=kk