If you’ve read all the steps required when taking out a home loan, car loan or even a renovation loan, you’ve read that your bank will contact Credit Bureau Singapore to check your credit rating. Credit bureau in Singapore is what banks rely on when ascertaining if a person has good payment history or is worth the risk of giving out a loan. Banks will use your current credit score and credit history as a reference for your current financial performance and repayment capability.
Indeed, individuals with excellent credit scores and consistent payment history will more than likely receive favorable interest rates and a higher rate of loan application success. On the other hand, those with poor scores often are rejected, or they receive a high-interest loan even if the borrowers have equities and collaterals. In any case, Credit Bureau Singapore is an essential part of borrowing money from your bank successfully and with fare rates.
What Is Credit Bureau Singapore?
Credit Bureau Singapore monitors all consumer credit and receives uploads from all retail banks, financial institutions, and other financial organizations. The Association of Banks in Singapore (ABS) and Infocredit Holdings maintains Credit Bureau Singapore as a joint venture for providing accurate credit information on an on-demand basis for both financial institutions and consumers alike.
The ABS worked with Singapore’s government in enforcing the 2002 Banking Act, and they needed a platform that allowed members of Credit Bureau Singapore and consumers to store and receive credit-related information. With Credit Bureau Singapore, the industry has an expanded capability to review consumer or borrower risk through their credit scores. In doing so, Credit Bureau Singapore — together with The Monetary Authority of Singapore (MAS), provides full transparency and exceptional balance for the market.
With the Credit Bureau Singapore, banks can confidently check the credit history of borrowers through grades we all know as credit scores. The platform derives the scores from all the banks the borrower has worked with in the past to paint an accurate picture of their credit history.
Why Is Credit Bureau Singapore Essential For All Singaporeans?
The banking industry thrives on risk assessments, which means actuaries and accountants measure probabilities as to what or who are excellent investments. Credit scores are borrower’s grades that reflect their trustworthiness in repaying their past financing, which helps him or her qualify for higher amounts with lower credit scores. If you have a poor credit score, you’ll often get low-amount loans with high interest rates — and even if you provide equity, you’ll still end up with higher interest rates despite a small increase in loan amounts you can borrow.
Credit Bureau Singapore serves as a transparent platform of information regarding credit information of different individuals, organizations, and other entities that can borrow money — such as businesses. It affects you when you do the following.
As we mentioned earlier, all banks heavily lean towards your credit scores when evaluating your loan application. You can receive higher amounts if you have an excellent credit score. However, you’re more likely to receive poor amounts or even application rejection with poor scores.
It’s best to borrow from banks if you’ve resolved your existing debt, and prove through small bank loans that you’re more than capable of managing your finances thereafter. Until you do this, your low credit scores will affect your chances of success.
A Platform for Managing Your Credit Scores
Consumers can check their credit scores for additional information they may have missed. Credit Bureau Singapore provides an online platform where you can check your scores, especially right after you’ve finished paying off a debt or closed a mortgage transaction.
Most of the time, information on Credit Bureau Singapore is updated on a daily basis. However, some banks might only upload updated credit information after weekends. If you’re planning to take out financing and only have a single debt issue, you can use Credit Bureau Singapore’ Credit Management System to find the right timing to borrow from banks with a better rate in the next few days or weeks.
Financial Tech Platform For Nationwide Credit Score Management
Banks use Credit Bureau Singapore as their central hub of credit information. At any time, bank representatives and qualified personnel can access Credit Bureau Singapore’s credit score database to evaluate a borrower’s performance for application references. Furthermore, it can upload a borrower’s current performance and scores directly into CBS database, aiding any borrower immediately if they need lower interest rates by closing their current debts.
Every citizen in Singapore has their credit score data stored in Credit Bureau Singapore. However, foreign professionals will find it extremely difficult to take out low-interest, high-amount Singapore bank loans because they have no local credit scores in the database. At best, they will find the best use for registered money lenders in Singapore to take out financing they greatly need.
Added Consumer Security
Credit Bureau Singapore is crucial because it stores accurate and fully-transparent credit scores of consumers as banks upload them. Furthermore, Credit Bureau Singapore will inform you of any possible identity theft to help you protect your finances. You can also use the platform to contest credit scores or ask for inquiries, especially when you believe your credit scores are inaccurate.
Furthermore, Credit Bureau Singapore integrates with your email and uses machine learning to look out for any of your predetermined activities — such as the lender uploading information to your credit files. Credit Bureau Singapore makes credit score management convenient and accessible at any time with added security too.
Keeping Your Credit Scores Healthy
If you wish to work with banks in the future, you will want to have a healthy credit score to receive excellent offers and opportunities for higher financing with lower interest rate requirements. Once again, banks and financial institutions provide you a good credit score if you settle all your debts — especially high amount loans and mortgages — and pay everything on time and in full.
You only receive poor credit scores when you’ve failed to pay for your loans, declared personal bankruptcy and are in the middle of liquidating your assets for debt repayments, or you have a few loans left to clear before the bank or financial institutions finalizes your credit scores.
Here are a few helpful ways to make sure you have healthy credit scores all the time.
Pay Your Financing on Time
The golden rule of bank loans is to borrow money and pay it on the time your bank specified on your contract. In doing so, you prevent delaying all loan repayments and avoid incurring high interest fees. The best way to do this: use your smartphone’s calendar. You can set up an alarm for it a day or two before the payment date itself.
Furthermore, you can take note of holidays and other occasions when your payment deadline might move by a day. Paying your financing regularly is easy if you budget your spending and actually spend less. Later on, we’ll discuss the best ways to recover from poor credit scores without delay.
Only Borrow Amounts You Can Repay
Another important rule that helps you maintain healthy credit scores is to borrow just enough. It’s easy to estimate: calculate all your expenses and taxes to get your net total income per month. If the amount you plan to borrow from banks is higher than the final monthly income you have, then reconsider taking out the loan. It’s important to only borrow amounts you can repay. Many borrowers get themselves in deep debt by taking out cash they cannot return to banks with regular repayments.
Consolidate Your Earlier Debts First
Debt consolidation — primarily offered by worker or trade unions and registered SG money lenders — is a great way to get yourself out of your earlier debts. While you can declare personal bankruptcy in Singapore, you have a variety of choices that can help you get out of debt and help you get better credit scores.
Unions or money lenders will negotiate with all your lenders and pay them the total sum of your missed repayments. Next, your consolidator will give you the total amount in a low-interest loan you can pay on a regular basis. Now, you won’t need to contend balancing multiple interest rates and get yourself better credit scores through consolidation services.
Finish What You Start (or Borrow)
A borrower that only pays for one mortgage at a time has a higher credit score than borrowers with two or more ongoing financing. If they miss any repayments on their existing loans, it will have a sure impact on their credit scores. However, if you take out only single financing and finish it, your credit score will remain in good standing. It’s best to finish what you start or borrow from your lenders — especially if they’ve given you a huge sum. In doing so, you avoid paying late and having poor credit scores in the process.
The Consequences of Poor Credit Scores
In school or university, grades mattered because they serve as basis of your educational capabilities and possible achievements. Credit scores function the same way. With higher credit scores, you get better deals and lower interest rates. Poor credit often warrants direct rejection from banks or high-interest, low-amount loan repayments that can slowly improve your credit scores over time. Here are the complete list of consequences when you have bad credit scores with banks.
You Won’t Get Good Deals With Banks
You won’t trust a friend who has yet to pay their earlier financing then asks you for another loan. In this context, banks treat borrowers with excellent credit scores as “friends” or individuals, organizations, companies, or entities trustworthy enough as data implies to handle huge amounts of financing with fair interest rates. They have paid their earlier financing without fail despite the high amount repayments they need to do regularly. Poor credit scores indicate the borrower’s failure to repay their financing on time and in full. Therefore, with weak indicators of trust, banks cannot provide the borrower with better offers unless they can prove otherwise — meaning having good credit scores thereafter.
Workers Union Funds Can Reject You Too
Worker and trade unions accept applications from individuals with poor credit scores. However, they might reject your loan application and instead give you an option for debt consolidation if you have too many unpaid and unaddressed debts. On the other hand, they can evaluate your credit similar to money lenders: you need to present your proof of income and employment to your lenders. However, you might only receive low-amount propositions because of your low credit scores.
You’re Most Likely in Deep Debt
With bad credit scores, it’s wise not to take out any further debt from banks, trade unions, and money lenders. It would be better to recover from your bad credit scores before you venture into another financial commitment. In addition, make sure you have a steady stream of income to repay your debt or before you approach debt consolidation services. In doing so, you can get your credit scores up and gain better opportunities working with banks
How Can You Recover Bad Credit Scores?
If you have a missed repayment on your loan, don’t fret; it’s not detrimental immediately on your credit score. However, if your bank notes your continuous failure to pay your loan and increasing debt, then this will reflect on your credit scores negatively. However, having bad credit scores isn’t the end of the world. You can still recover it and get better offers from banks and financial institutions in the future. Here are a few effective ways you can recover from poor credit scores quickly and conveniently.
Use A Money Lender
Singapore has numerous money lenders willing to provide loans and debt consolidation for borrowers with poor credit scores and deep in debt. Raffles Credit, Fortune Credit, Bugis Credit, and other money lenders under the oversight of the Ministry of Law have dependable services that can help you pay off your existing debt. In turn, you’ll need to accomplish a low-interest loan, which is the sum of the entirety of your former debt. Money lenders only need your proof of income and employment. Furthermore, they cannot increase their four percent interest rate cap, and they release loans in less than a week too.
Debt Consolidation Services
Aside from money lenders, different organizations and unions across Singapore — including trade unions — offer debt consolidation services for indebted individuals. If you’re a professional, you can seek help from a union or organization. If you qualify for their requirements, you can quickly consolidate your debt and pay for a low-interest loan built from the sum of your formerly-existing debt. Dedicated union debt consolidation services might have different terms and conditions and interest rates when you compare both with the ones set by money lender consolidation services.
Declare Personal Bankruptcy
Singapore gives borrowers the right to declare personal bankruptcy if they have debts amounting to S$15,000 and beyond. Borrowers can declare personal bankruptcy voluntarily but banks and financial institutions can force them to declare themselves bankrupt too. The process seems complicated, but Singapore’s legal system makes it seamless and easy for borrowers to follow. The entire process will have indebted borrowers working with an official assignee that oversees the administration, liquidation, and distribution of the borrower’s assets to settle their remaining debts. In doing this, you receive government aid but lose most of your collateral to pay off your debts.
Cut Down on Expenses
Lastly, you don’t have to make things complicated to pay off your debts. Prioritize paying your high-interest rate debts first by following a budget dedicated to eradicating all your existing obligations. In doing so, you attain a new level of discipline to rid yourself of debt. Furthermore, banks will report positively on your recovery, giving you better financing opportunities in the future.
Credit Bureau Singapore Makes Credit Score Checking Convenient
The Credit Management System allows all Singaporeans to access their credit scores in real time and see real-time updates as banks update their borrower’s information on a daily basis. Anyone with an ongoing debt they need to repay can access and update their information using the following steps:
- Head to Credit Bureau Singapore’s website at http://www.creditbureau.com.sg Take note that if you’re accessing Credit Bureau Singapore’s website and facilities from another country, you won’t be able to do so.
- Click on Access My Credit Report In this section, you can read about what’s included with your free credit report and pre-requisites you need to submit, such as a credit application approval or rejection notification letter, before you can use the online facility free for 30 days. Click on Proceed to continue.
- You’ll Need to Input Your Singpass ID and Password
- Purchase or Claim your Free Credit Report
- Take note that after your credit application approval or rejection letter grants you a free initial credit report, you’ll need to pay S$6.42 plus shipping for your credit report in the future.
Healthy Credit Scores Make It Easier to Get Financial Opportunities
Credit scores are greatly important if you want to use bank services to finance your new vehicle, educational fees, house, condominium, and others. Thanks to Singapore’s Credit Bureau Singapore, it’s easy to monitor and see your current credit score before you even take out financing. Additionally, the regulation of money lenders in the country makes it easy to recover from your debt and improve your credit score. Always remember to keep your credit score healthy — it is an indicator of your financial discipline too.