Malaysians are making strides in improving their credit health, but new data from Experian highlights growing financial risks that could impact long-term stability.
According to Experian’s latest consumer credit trends, 75% of individuals with previously weak credit scores have improved their ratings, while 43% of those classified as “Fair” in 2023 moved to a higher category.
However, about 10% of consumers with “Good” ratings saw their scores decline, reflecting a mixed financial landscape.
At the same time, Experian’s Early Warning Score (EWS) indicates rising credit risks.
The data shows that 28% of individuals covered by Experian have shifted from “Medium” to “High Risk,” while 24% have moved from “Low Risk” to a higher-risk category.
Unlike credit scores, which assess financial stability over a longer period (typically 12 months or more), EWS predicts short-term financial stress, offering early indicators of repayment challenges.
A declining EWS score suggests short-term financial stress, raising concerns about future loan repayment challenges.
If left unaddressed, weak score migration patterns could lead to long-term financial distress for some consumers.
Credit card spending has also increased, with 15% more Malaysians now using 75% or more of their credit limit compared to last year.
This trend is consistent across different age groups, reflecting a broader shift in credit usage habits.
While this may signal higher spending power, it also underscores potential financial strain.
To promote financial literacy and credit awareness, Experian is running a month-long Credit Health Month campaign in March 2025, offering free access to personal credit reports and i-SCORE ratings.
The initiative aims to help consumers understand their financial standing and make informed credit decisions.
“Our latest credit trends reveal a positive shift in credit scores but also signal emerging risks that require close attention. As Malaysians continue to evolve their financial behaviours, proactive credit management and financial literacy have never been more critical.
Through our nationwide campaign in March 2025, we aim to equip individuals with the knowledge they need to make informed credit decisions, helping them build stronger financial foundations for the future,”
said Dawn Lai, Chief Executive Officer of Experian Information Services Malaysia.
Featured image credit: Edited from Freepik
