Is a low credit score affecting your ability to get loans in Singapore on time? Here are 5 ways to raise your score.
Credit Score Definition in Singapore
Have you been thinking of moving into your own home or renting a bigger place? Are you planning to get your dream car this year?
Make sure your credit score is in the positive range. In Singapore, you’re given a score between 1000 and 2000
and grade AA to HH
. A low score 1000-1723 or HH grade marks you off as high-risk borrower. BB or CC indicate late or delayed repayments. DD to GG signify loan defaults and bankruptcy.
Factors like recent credit applications, late payments on dues, credit ceilings, and bankruptcy history or legal proceedings affect your credit ratings.
may refuse a cash advance
, if your credit report is lacking. But you can repair your score much faster by using these five easy methods
1. Check credit report for errors
Get your report (e.g. Credit Bureau Report) from Credit Bureau Singapore
(CBS) or DP Credit Bureau
and check them for errors regarding loan amounts, repayments or payment schedule. Are outstanding balances correct? If you’re prompt with payments, check for wrong late payments details.
Check these reports once or twice a year
. If you find errors, dispute inaccurate information with the bureau, and follow up until you get it rectified.
2. Make credit payments on time
Your credit score fluctuates depending on your repayment pattern. Late, delayed or non-payments of previous bills negatively affect your score.
To improve a low score, settle bills and EMIs
(equated monthly installment, is a fixed, monthly payment amount we make towards a loan we owed) on time, preferably before due dates. If you’re short on funds, pay at least minimum due on credit cards. Make two or three small payments on each credit card bill, if possible. You’ll notice a marginal increase in points which can pull you from an EE to a CC level.
3. Track utilisation rates
While credit score calculations are a secret in Singapore, according to companies like myFICO
, credit utilisation rates affect your overall score
. What you owe is important, but your credit celling to credit used ratio is also significant.
If your credit card has a S$5,000 borrowing limit and your balance due is S$1,000, utilisation rates is 20%. To keep your score high, ensure this ratio never crosses 30%. To improve a lower score, pay off dues on cards where this rate is on the higher side or get a new card with higher ceiling.
4. Don’t take on new debts
As personal loans
below S$500 don’t require credit checks, you may be tempted to take fresh loans to tide over money woes. If you’re struggling to make repayments and trying to improve your score, avoid taking on new debts
. Cut off unnecessary expenses or use cash for payments, until you’ve repaid a substantial portion of existing debt.
5. Restrict credit enquiries
Every credit enquiry gets reflected in your report, whether it’s for a new credit card or loan application. Too many credit cards or
personal loan applications
in short period of time gives the impression that you’re experiencing financial problems. Keep these enquiries to a minimum
, especially when you want to improve your score.
Have you managed to improve your credit score in Singapore? Do you have tips to share with other readers?