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Think about the people that don’t have access to credit. They are the ones who fall prey into loan sharks and other predatory lenders. They are the ones who get scammed by get rich quick schemes. They get bogged down by paperwork and bureaucracy in government. They get refused by big corporate lenders and banks.
What if we could help them by giving them a way to borrow money safely, without collateral as long as they provide proper documentation? We can make it easy for them by just using an fintech app like GCash consistently to be able to have access to credit.
What is GScore?
GScore is a type of credit scoring which uses your GCash user data as a measure of your credit history. The higher the score, the more financially worthy you are considered to be.
In China, with a better Zhima Credit score, they can forego deposits with renting stuff like bicycles, or they can provide better loan rates for apartments or cars. Bad credit can mean more identification needed for financial transactions.
In the US, the FICO score determines your mortgage payments, your loan terms and credit card standing.
Here in the Philippines now, we currently don’t have a centralized scoring system. So to counteract this, GCash created their own scoring system, using GCash user and transaction data as their source for scoring.
How does GScore work?
In the GCash app, you first need to opt into the app to use your transaction history, because this is how it computes how creditable you are, without you needing to submit any financial statement document.
Your transaction history data will be the source where your GScore will derive from. You can increase or decrease your GScore by the financial habits you practice everyday.
This is in a sense a better solution, since traditional methods of figuring out your credit score is often not really fair and equitable.
Banks more often than not lend only to people with money. The majority of people who need it the most are out of reach.
This might look like we’re giving up privacy to get credit, but remember, this is all voluntary. You can choose to ignore it in the app altogether if you want to.
However, if you do decide to opt in you can get access to a lot of real world benefits. Currently, since GCash is part of Globe Telecom, Globe is offering better terms for prepaid subscriptions with a prerequisite GScore. We will eventually see similar promos as GScore becomes more mainstream.
How can I make my GScore higher?
The algorithm GScore uses puts more weight on the quality of your transactions, meaning cashing in an amount and then simply cashing it out will not give a high score.
Here is a tip: there is an incentive of additional 5 points in GScore by just linking a bank account under cash-in.
But as all things are bound by change, everything that goes up, can also come down. Your GScore can and will definitely decrease with less usage.
But if you are practicing good financial behavior especially using GCash then the GScore algorithm will notice it and will definitely reward you with a higher score.
Here are some simple ways to make your GScore go up:
- Keeping a healthy, positive balance — don’t leave your GCash wallet empty, even 300-500 will do
- Linking a bank account then doing cash in and cash out via bank transfer
- Using Invest Money by putting in money regularly
- Depositing money in your GSave account, even better if you are using the auto-debit option
- Using varied GCash features like Send Money, Buy Load, Pay Bills, Pay QR regularly
- Using GCredit and also paying off your GCredit without incurring penalties
- Using GCash regularly — not just once or twice a week — you should be using it enough that GCash Forest Energy Points matter to you
How often does your GScore readjust?
GScore readjusts every week and looks at your previous week’s transaction history data.
So it would be best to time your “quality” transactions on certain weeks to prevent it from going down drastically.
For example, since you will most likely pay bills during your payday week, it would be better to schedule your investments or savings on every other week that is not a payday one.
The bottom line is, this shouldn’t be an issue to someone who uses GCash everyday consistently.
Another tip is not to get discouraged by a lowering GScore. Even if your GScore lowers, your credit limit will still remain the same.
What is GCredit?
GCredit is a line of credit provided by GCash, and it is tied to your current GScore. The higher the GScore, the higher the credit limit you can have.
GCredit is the main way we can utilize our GScore to its full potential. Basically it’s like a credit card, but with lighter terms.
This is in line with GCash’s mission to provide financial services to people who are traditionally not covered by these. The truth is, Filipinos have the least credit card usage in the ASEAN region.
Can I cash out my GCredit?
Unfortunately, you cannot cash out your GCredit. This is one way of keeping the money within the GCash ecosystem and also a way to lessen bad debts. Also, using GCredit will feed transaction data to GScore, which will provide a better picture of your credit standing.
However, given a big enough GScore, you can be qualified to cash out a loan using GLoan. This is a new feature where you are given a traditional loan payable via 9 or 12 months with a variable interest fee (2.6% – 4%) depending on your GScore.
How do I get GCredit?
You first need to be fully verified in the GCash app. Once you get to a GScore of around 400-500+, you will be receiving an in-app and SMS notification that you can activate GCredit. Take note that this is only based on my experience. The actual GScore that will unlock GCredit is not disclosed by G-XChange / Mynt.
GCredit provides a small credit amount at first (Php 1000), but as you pay diligently and on time, you will be able to unlock higher amounts (up to Php 30000) and lower interest rates (down to 3%) as your GScore goes up.
Do take note though that using this is in fact a loaning in the short term, so it also means you will need to pay the loan back with interest. But the good news is the terms are definitely better in many ways when compared to a credit card.
Opting into GCredit
Starting March 26, 2021, GCredit will be transferring over from Fuse Lending to CIMB Bank. The main advantage of this is that CIMB Bank will be able to support more users and offer higher credit limits than Php 10,000 and lower interest rates than 5%.
Also, there will be tie-ups with CIMB Bank that would allow you to take a loan easily once you also have a clean GCredit account.
As such, there are new eligibility requirements needed before you can continue on using GCredit. But opting in is easy as you only need to tick on checkboxes and acknowledge the terms and conditions.
Can I *not* use my GCredit? Will I need to pay anything?
You have the freedom not to use your GCredit. You will also not incur any fees or penalties if you don’t use it. You can also opt not to activate GCredit if you have no plans on using it.
Can I cancel my GCredit?
You can have your GCredit terminated via GCash Support. However, you will need to have a valid reason as well as no outstanding balance to be able to do so.
I have multiple GCash accounts. Does this also mean I have multiple GCredit accounts as well?
No, all your GCredit accounts are shared only as one account to you.
Does GCredit have an annual fee?
No, it is based on your usage only.
How do I unlock a GCredit of 10000?
From first-hand experience and verified by other GCash users, a GScore of around 500-600 will unlock the 10000 credit limit. But don’t fret if you don’t get it immediately, as long as you keep on using your GCash, it will eventually unlock.
As of right now, I haven’t met anyone who has unlocked the 30000 credit limit. Personally, my max GScore reached 750 and I haven’t unlocked any amount higher than 10000 at that score.
Also, as we transition to CIMB Bank handling GCredit, we may see 30000 (and even higher, like 100000) and lower interest rates (less than 5% monthly) soon.
How high is the interest rate?
If you let your GCredit accrue for a month, the total is by default 5% on top of the principal amount. Compared to a credit card, this might seem high, since credit cards charge 3% per month, but GCredit can have better terms overall because of daily compounding instead of monthly.
What does daily compounding mean?
It means that the interest rate is computed per day, instead of per month. If you paid your GCredit sooner, you would pay a lower amount in total than if you paid a month after, like credit cards.
Your GCredit interest is cheaper the earlier you pay. For example, if you paid three days after you’ve used GCredit, it’s cheaper then than if you paid a week after.
This also means that if you used GCredit today and paid it off today, there is actually no interest incurred.
Can I use the full amount again if I paid my GCredit earlier?
Yes. Another advantage of paying it off early aside from the lower interest payment is you can use your full credit again even before your due date, unlike a credit card.
For example, you have a Php 3000 GCredit. You used it to pay for your groceries amounting to Php 1500 today. If you paid it off the next day, then your GCredit returns to Php 3000, and you can borrow the full amount again before your due date arrives.
How about a sample interest computation?
If you used GCredit to pay 500 pesos to a merchant, and you plan to pay it off the week after. How much interest in total do you have to pay?
Given: Principal = 500 Interest = 5% = 0.05 Days Interest Incurred = 7 days / 30 days Formula is: Total Amount Due = Principal x (1 + (Interest x Days Interest Incurred)) So the total amount due after 7 days is: 500 x (1 + (0.05) x 7/30) = 505.83 What if you'd paid it later, for example after the full month? 500 x (1 + (0.05) x 30/30) = 525.00
The total amount to pay is 505.83. If you paid it after a month, you would have paid around 25 pesos more.
Keep in mind, the interest rate is based on the default. A higher GScore could mean eventually a lower interest rate in the future.
How long is the Repayment Period?
You have a total of 45 days to pay your loan without penalties. The billing period is 30 days. Your due date is 15 days after the last day of the billing period. This is called the billing date.
So to summarize the definition of dates in the Manage GCredit page:
- Billing period is the date from when you started your GCredit usage and count 30 days from that date
- Billing date is the first day after the billing period
- Due date is the 15th day after the billing period
Your billing period and due date depends on the day you signed up for GCredit. Please take note that the loan has a daily interest.
So for the example below, you have your billing period from July 28 – August 27. Your due date is 15 days after August 27, which is Sept. 12.
The very last day to pay all your dues will be on September 12. If you pay after September 12, then you will need to pay the penalty fee on top of your dues.
Why can’t I see the interest incurred in the Manage GCredit page during the billing period?
The interest due when you use GCredit is not reflected in the Manage GCredit page until the billing period ends. Understandably this confuses most first-time GCredit users. You will only see the interest due on this page when you’ve received your Statement of Account on the billing date itself.
This is why it’s so important to pay your GCredit off as early as you can since you can only see the total interest due when you receive your statement.
How does the GCredit Statement of Account look like?
The statement of account is sent to your email after your billing period (at your billing date). For example, for the billing period above (July 28 – Aug 27), you would be receiving the statement on Aug 28. You would then have 15 days to pay your dues (September 12 from the example above).
For the screenshots below, I used my own statement as an example, so bear with me if the dates are not the same as from my other example above.
What happens if I don’t pay my dues?
You will incur penalties depending on how long you went on without paying your dues. Here is a list of the penalties corresponding to the number of days late (meaning after the due date):
- 1-30 days late = Php 200
- 31-60 days late = Php 500
- 61-90 days late = Php 900
- 91 days and later = Php 1500
So it is best to pay and settle as early as possible. If you are not able to pay after 3 months, your GCredit will be deactivated or revoked and your GScore will correspondingly go down as well.
Here is a bit of a warning: If you don’t pay your dues, GCredit will eventually be debiting your GCash balance. However, it will send an SMS before it does, so you will have time to tuck it away if you really need the money. Take note that if you have an auto-deposit schedule with GSave or with a bank, the GCredit auto-deduct schedule will be running first in terms of prioritization.
Another thing to note is if you are delinquent, you won’t be able to use GCredit as payment method. This is until you’ve paid off your remaining dues. Your GScore will also be going down.
If you’ve been delinquent for a while, you will also be receiving a notice letter as well. Since your GScore also goes down, once reaching a certain score limit threshold, your GCredit will eventually become deactivated or revoked.
Where can I use GCredit?
You can use GCredit to pay merchants or bills in the GCash app. You can also now pay on selected webpay merchants (like Google, Apple Store, Shopee) using GCredit. Currently, you can’t use GCredit with GLife merchants, but we can be assured that it would be enabled eventually.
How do I pay via Online Webpay?
For selected merchants that provide GCash acceptance, they have a GCash checkout page. You just need to input your mobile number, your one-time password (OTP), and your MPIN for confirmation. In the next screen, you will be able to select Balance or GCredit as a payment mode.
How do I enable autodebit via GCredit?
You can also enable GCredit as a backup payment method in case when your balance is not enough to pay for a subscription. These only work with selected merchants with an autodebit method (ex. Google, Apple, Lazada, FoodPanda). You can click on the “Enable GCredit as backup for Online Payments” checkbox when you link your account to GCash.
To disable this function, you can tick on the “Enable GCredit as backup” in the new Auto-Payment section of the Manage GCredit page in the app.
Why can’t I use my GCredit in my online payments?
You need to update your details with CIMB (please see Opting into GCredit section above). Eventually, without the opt-in, you won’t be able to use GCredit in any transaction.
How do I pay via Scan QR / Generate Code?
In the app, we can pay via Scan QR and Generate QR modes. You just need to set whether you will be using your GCash balance or GCredit when you pay. You can also pair it with a voucher during payment.
For Scan QR, you just need to select GCredit as your method of payment once you reach the confirm payment page.
For Generate QR Code, you need to select it below the QR Code itself – it may be hard to see.
Can I use GCredit for payments in 7-11 / 7-Eleven?
What merchants support GCredit?
You can take a look at Fuse Lending’s official merchant list. Basically, all of the scan-to-pay merchants should also support GCredit.
For Online Payments, some merchants have this (ex. Shopee) as an initial offering. But eventually, we can assume that many will also be supported eventually.
For GLife, there is no support for GCredit currently.
How do I pay my bills using GCredit?
You can also see billers in the app where you can use GCredit. It says “Also accepts GCredit” on the biller itself. For example, here are the billers under Electric Utilities:
When GCredit is down or under maintenance, the “also accepts GCredit” line disappears.
Please take note that you cannot use GCredit with government billers and with third-party loan companies.
Just so you don’t need to check each biller category, I’ve summarized each category in the app that supports GCredit:
- Electric Utilities
- Water Utilities
- Real Estate
Fuse Lending has also released an official list of billers that support GCredit.
Can I still use my GCredit even if my GScore goes down?
Yes, until you reach a certain amount. If your GScore passes this amount limit or you remain inactive for a long time, your GCredit will be deactivated.
How do I reinstate my GCredit if I got deactivated?
You can file a ticket in the Help Center and request reactivation. Although, one of the requirements is a high enough GScore to be able to use GCredit again.
Why can’t I see the GCredit option when paying via QR or via pay bill?
When there is no GCredit option, either the merchant/biller doesn’t support GCredit payments, or GCredit is under maintenance in the meantime.
For the list of billers that support GCredit, please see the section under paying bills above.
How can I pay for my GCredit bill when GCredit is down?
In the unfortunate case when GCredit is under maintenance and you need to pay for your GCredit, you can do so via other bill payment channels like banks, Bayad Center, 7-Eleven, ECPay, LBC, etc.
These are the details needed for payment:
- “Fuse Lending” as biller name
- Account name (your full name registered in GCash)
- Account number (your GCash mobile number)
- Amount you are planning to pay
We talked about GScore and how it represents your creditworthiness as you use the GCash ecosystem. You can increase this by the quality of your transactions in GCash, not only by quantity — at the very least, you need to use GCash so much that GCash Forest matters to you.
The GCash app can provide a corresponding GCredit amount depending on your individual GScore.
GCredit is a safe way of providing credit to those who traditionally have no credit cards and have no savings account, without leaning on high-interest lenders. Its main difference with credit cards is the daily compounding, compared to monthly with credit cards. This makes it more flexible as you can pay it off early.
Another huge difference for GCredit is you need to pay it off fully before being able to use it the following billing period. It will also automatically debit your GCash balance once you have missed your payments.
If you’d like to learn more about GCash, I created a how-to on the basics of GCash.
Here is a list of links if you’re interested in the main GCash functions:
- Cash in or Cash out
- GCash Scams
- Send Money
- Bank Transfer
- Payment via QR
- GCash Mastercard
- AMEX Virtual Pay
- Pay Bills
- Request Money
- Buy Load
- GCash Forest
- Book Movies
- GCash via USSD (*143#)
- Receiving Remittances
If you are also interested in knowing what resources I used to make this blog happen, please look at my resources page.
How do you like the tutorial? Did I miss anything? Please add your comments and suggestions below!