A high credit score provides a vast range of benefits — from being eligible for a higher amount on any loans with lower interest rates and easier approval on a house or car purchase.

Not to forget, Singaporean banks and other financial institutions are keen to lend loans if you have an excellent credit score. They examine the plausibility of your financial habits before borrowing loans.

After all, a credit score showcases your financial health in the form of a bill. If you have a bad credit score, it’s difficult for you to get a credit card or any loans such as a mortgage.

So, if you’re planning to apply for any type of loan or build a retirement fund — it’s time to fix, obtain and maintain a good credit score.

If you’re still unsure what is a credit score or wondering what you can do to improve your credit score? Read on to find out.

What is a Credit Score?

what is a credit score

Presented as a four-digit number, it is based on an analysis report of a person’s past loan accounts history that ranges between 1000 to 2000. A credit score represents the financial creditworthiness of a person.

You can find out your credit score by requesting an online report from Credit Bureau Singapore (CBS) at the cost of $6.42 (inclusive of GST).

Once ready, you can collect at SingPost Branches Islandwide, CrimsonLogic Service Bureau or their Credit Bureau office at Shenton Way.

If the credit score is near to 1000, it shows a higher risk of default in payment. If it’s nearer to 2000, it means your financial health is excellent and demonstrates better credit decisions.

Be that as it may, it is still best to have a good credit score even if you don’t plan on applying for loans in the long run.

When unexpected issues arise that require a large sum of cash, you won’t have a problem getting approval from banks or financial institutions for loans.

Now that you know how to obtain your credit score, here’s how the scoring system works in Singapore.

How does the Scoring System Functions in Singapore?

grading credit score

MAS, also known as The Monetary Authority of Singapore, has authorised two credit bureaus — Experian, formerly known as DP Credit Bureau and Credit Bureau of Singapore — to publish credit scores and reports.

But in this article, the scoring system is based on Credit Bureau Singapore’s methodology.

Your credit score will be measured by a proprietary algorithm that traces your credit history.

They will trail your financial history and produce a report comprising details of past loans, payment history, types of credit you applied, new credit, length of credit history, and even the number of types of inquiries you have queried from lenders.

Based on these factors, they will issue a credit score.

How Long Does it Take to Improve Credit Score?

how long does it take to improve credit score

If your credit score has been in dire straits because of late repayments and now, you’re looking to improve — you’ve come to the right spot.

To be honest, there is no precise approach to predict how long it takes your credit score to improve.

The good news is that credit score recovery will be slow.

Your credit score calculation is based on a 12-month rolling basis of your account repayment history. But with discipline and patience, your credit score will gradually improve.

In other words, you can erase your bad credit history by making it a priority to pay all your dues on time in the next 12 months.

Let’s take a look at these tips and tricks to up your credit score to a good number.

How to Obtain a Good Credit Score in Singapore

How to obtain a good credit score in Singapore

  1. Pay Credit Card Bills on Time

    If you ever missed a credit card bill payment, it will negatively affect your credit score in the long run.

    So the more you avoid paying your credit card bills, the longer your credit score will take to recover.

    Thus, it’s important to pay your credit card bills on time. Not only it strengthens your credit score but helps you maintain a good credit rating.

    It is also noted that if you delay paying your credit score beyond 30 days, you will be placed in a delinquent category.

    This will further affect your credit score even more.

    Thus, it’s important to pay your credit card bills on time. Not only it strengthens your credit score but helps you maintain a good credit rating.

  2. Use Credit Cards Carefully

    It’s easy to get carried away when you’re using your credit card to pay for everything. But then the due date arrives, you paid the minimum amount and deferred the remaining amount.

    It may seem like a good idea, but it will backfire because you end up accumulating a large outstanding amount.

    As a result, you pay massive amounts due to interest.

    Rather, use your credit card as a reward means where you can earn back in cashback or air miles. It’s also best to pay off your entire amount when you receive monthly statement bills.

  3. Never Default on Loans

    If you fail to pay monthly loan instalments, it will significantly affect your credit report.

    You will be a defaulter in your credit record. It will also be impossible for you to obtain a line of credit, credit card or loan.

    So, avoid being a defaulter! If you can’t make the monthly payments, seek a credit counselling to restructure your debt situation.

    Not to mention, defaulting might lead to legal action if you have money but simply refuse to pay.

  4. Short-Term Personal Loan to Repair Ruined Credit Score

    If you have a horrible credit score, the most straightforward approach to repair a bad credit score is by settling on full short-term loans.

    Banks and other businesses, such as ourselves, offer personal loans to help you build your credit.

    After a while, your damaged credit score will be repaired gradually as you’ve paid the loan’s monthly instalments.

    If you know your current credit score and it’s around B or under, you can apply for a personal loan before moving to larger loans such as a home or car loan.

    This could lead you to a higher AA rating by the time you plan to apply for a larger loan.

    We hope that — with the above tips — you can quickly build a good credit score. But it doesn’t stop there; you’ll have to go the extra mile in maintaining a good credit score.

    To do so, here’s a few helpful hints that can prevent you from falling into the abyss of a bad credit score.

Avoid Having a Bad Credit Score in the Future

avoid having a bad credit score in the future

  1. Multiple Accounts in Credit card & Line of Credit

    Too many credit cards or line of credits can be dangerous.

    Your credit score will take a plunge if your debt is spread across multiple credit card accounts, various lines of credit and personal loans.

    You will likely get confused due to the billing cycles and most likely, miss the payment deadlines.

    With that said, it is best to avoid this mistake that can seriously take your credit score to its grave!

    We hope that — with the above tips — you can quickly build a good credit score.

    But it doesn’t stop there; you’ll have to go the extra mile in maintaining a good credit score.

    To do so, here’s a few helpful hints that can prevent you from falling into the abyss of a bad credit score.

  2. Late Payments

    As mentioned earlier, pay your credit card and other loans on time.

    If you’re more than 30 days late in paying the minimum sum, you will be viewed as a delinquent in your report.

    If you’re going to be late with the payments, it is best to call your bank or financial institution in advance and inform them.

    Sometimes, they are willing to work out with you to find an alternative solution.

  3. Avoid Applying for Too Many Loans in a Short Time

    Your credit score will drop significantly if you apply for multiple forms of loans or credit in a short period.

    You will be suspected by banks or financial institutions that your financial situation is in a roughhouse.

    Instead, figure out how much you need and apply in one loan.

Rebuild Your Credit Score for Financial Success

rebuild your credit score for financial success

We hope that with this guide, you are no longer at your wits’ end, fretting on how to recover from a bad credit score to a good credit score.

This is a chance for you to come clean and change your financial attitude.

If all else fails, you still have another option — apply for a personal loan and aim to make monthly payments in full.

This will not only demonstrate your capabilities in paying on time but also show that you’re competent for a prescribed payment manner.

So, if you’re looking for the best trusted licensed money lender in Singapore, this is where Credit Hub Capital comes in.

Whether your credit score is bad or good, we believe everyone deserves financial help when they need.

Our Fast Personal Loan is a type of loan for those who encounter financial difficulties and need access to quick funds such as bad credit history.

Get in touch with us today, and we will provide a loan that suits your financial needs.

 

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