Every financial organization looks forward to working with borrowers with a good reputation repaying their loans. And to mention further, if you want to further your career in the financial world, potential employers in Singapore are checking on how well your credit score is. This is after the Monetary Authority in Singapore declared in November 2019 that any potential candidate looking for a job should have an appropriate credit score.
Its therefore essential to take charge of your credit score, bearing in mind that it is one of the essential measures in the financial industry.
What is Credit Score?
A credit score refers to a three-digit number ranging from 300-850 that is designed in such a way to be interpreted on your likelihood to pay your debts. The higher the score, the better your credit rating, and the more financial organizations will be inclined to work with you.
Does a Good Credit Score in Singapore Matter?
In Singapore, there are strict regulations followed by financial institutions. For instance, if you want a loan of above $500, the financial institutions will use your credit score to determine how much they can risk their money as they extend the credit. It also determines the interest rate they can offer. The higher the credit score, the lower the interest rate and vice versa. This is the reason why you should endeavor to have good credit scores.
Imagine a scenario where you can repay a car loan, but since your credit scores are wanting, you end up paying high-interest rates, which translates to high monthly installments. You can see how stressing and straining this can be.
Which are the ways to Improve Your Credit Score?
If your credit scores are wanting, there is no cause for alarm. All you need is to followthe below-mentioned tips, and between 6- 12 months, you will be back on track and rank high for better and low-interest rates.
- Repay your Loans in Good Time.
Whether your financier is a bank, a Sacco, a credit union, or a licensed money lender does not matter. The bottom line is that paying your loans in time will earn you good credit.
If you default in the first two months, be wary that your credit scores will have dropped.
For those with credit cards, ensure that you pay the installment by the time they fall due since they have a more significant impact on your bills than any other loan.
In the case of mortgages or personal loans, if you find that you will pay your installment at a later date, it is essential to advise your organization beforehand.
This will save on penalties that would otherwise affect your credit scores.
Majorly, financial institutions are friendly if they are notified. Working with a reputable licensed money lender can also be a good idea to help save on such eventualities.
- Review your Credit Reports.
Any time you want to improve your credit scores, it is vital that you have a look at your credit reports. This can be generated from the consumer reporting agencies in Singapore to ensure no errors or signs of fraud using your identity.
If you verify that the information is correct, it is advisable to check if any old loans have remained unpaid for a while. Ensure you clear such loans for better credit.
- Dispute any Credit report Error.
After reviewing the credit report, and you find that there are errors attached to it, place a dispute immediately. The faster the issue is resolved, the better, as it will help to improve your credit score.
Remember that you are entitled to a free credit report per year and, as such, take advantage of the window given for evaluation and reporting.
Generally, credit bureaus work 30 days from the reporting date to evaluate and respond. Take advantage of this and have your score improve.
- Limit Your Credit Enquiries.
All this information is reflected in your report, whether enquiring about a new credit card or a new loan application. And remember that m if you have many credit cards, this can be an impression that you are facing financial challenges, and your credit will remain down.
To avoid this, limit the inquiries if you want to see the credit scores improve.
- The Level of Credit History.
Have you been a loyal bank or a licensed money lender customer? The fact that you have been repaying the loans in good time and have built a sense of reliability will make a financial organization work with you. Your credit scores will also improve based on your financial discipline.
- Set a Boundary on the Number of Credit Facilities.
Having many credit facilities is not healthy. It is important to keep it to 4 or 5 facilities. Any amount above that might bring confusion on the payday, and the result is thatthere will be defaulted loans. By the time you remember about making a repaying, your credit score will already be damaged.
Always close credit cards that are no longer in use, which will also reduce the annual charges that come with owning a credit card. On the same note, if you find a credit card with a lower interest rate, it’s advisable to close the old card and use the new and cheaper credit card.
- Repair Damaged Credit by Meeting your short-term LoanRepayments.
Should your credit scores be damaged, you must work on short-term loans, pay them in good time, and close as soon as you pay them off. This will build room for repaying the huge loans, and already, you will have improved on score.
Are you looking for a financial organization to help you improve your credit scores? At Online Credit, we are always there to help our customers access credit with bad credit scores and help them build for the better. We are a licensed money lender in Singapore, and working with us will be the best journey to an improved credit score.