Tips For Building And Maintaining Your Credit Score


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Table of Contents

Couple with good credit score applying for personal loan in Singapore

An individual’s credit score is a score used by lenders as an indicator of how likely this person may repay his/her debts. It also indicates how likely this borrower may default on his/her loans.

In short, it measures an individual’s risk as a credit applicant. In Singapore, a borrower’s credit score is measured by the Credit Bureau Singapore (CBS).

How will credit score affect your loan application? Banks vs licensed money lenders

When you apply for credit at a bank, the bank will check your credit score before deciding if they would approve your loan application.

A good credit score is beneficial as it increases your bank loan application approval rate and can potentially reduce the interest rate offered to you. In contrast, a poor score will make it more difficult for you to get your loans approved, and may increase the interest rate offered to you.

In Singapore, a person’s credit score is a 4-digit number, which takes into account one’s credit history, credit utilisation ratio, and occurrences of delinquency (e.g. late or missed payments), amongst others.

Although licensed money lenders may still approve your loan application even if you have a bad credit score, it may affect the interest rate they charge you, as they may be less confident of your repayment ability.

Also, have you unknowingly affected your credit score with some of your credit usage habits? Here are some tips to help you maintain your credit score within healthy numbers:

1. Make debt payments on time

One of the biggest reasons for a low credit score is late or missed payments on credit cards or loans. Defaulting on or missing payments gives the impression that an individual is not reliable or that they are financially incapable of repaying what they owe. Thus, banks will usually not approve loan applications from individuals with poor credit scores.

If you want to keep your credit score within the healthy range, paying off your loans early or on time is crucial. You can use calendar reminders to help you and automate payments wherever possible. If you are currently in significant debt, you can get a debt consolidation loan from a licensed moneylender in Singapore. This streamlines your debts so it is easier for you to keep track of payments.

Of course, in terms of financial planning, besides paying off your loans, it’s also important to ensure you have enough savings to tide you through tough times in the future, instead of having to always rely on a loan. Find out how you can save up and pay off your loans at the same time as well as how to achieve a debt-free life.

2. Be patient in building up your credit score

A credit score typically takes into account the past 12 months of credit activity. Thus, if you had a poor credit score and are now trying to fix it, it will take time. Additionally, an established credit score is better than a limited or non-existent credit score.

So, you might want to wait to build up your credit score to an AA grade before applying for a major loan to ensure you get the best rates.

3. Monitor your credit score periodically

It may be frustrating to wait patiently for your credit score to build up without being able to see the process. You can use CBS’ My Credit Monitor service to keep track of your credit score. The service tracks your score daily and updates you whenever it detects any significant changes. This lets you track your goal and manage your progress regularly.

4. Don’t open too many lines of credit

Having too many open lines of credit (such loans,cards, or other credit lines) isn’t very beneficial to your credit score as it increases the likelihood of you losing track of billing cycles, which may lead to missed payments and late fees and interest.

Keep your personal lines of credit as few as possible. If you find other credit sources with more attractive rates, make it a point to close off one account and transfer to a new one.

5. Space out your loan or credit enquiries

Multiple lines of credit aren’t the only thing hurting your score. Did you know that even enquiring about new loans or credit cards can affect your score?

Making too many enquiries within a short period will make you look ‘credit-hungry’. This is akin to alarm bells for lending institutions. Hence, it is best to space out your enquiries or do your research using other means before making an actual application.

However, enquiries to licensed moneylenders are not recorded in Credit Bureau’s Credit Report, hence it would not affect your CBS credit score.

Need an urgent loan but have a bad credit score?

Building your credit score takes time, so you shouldn’t be in a hurry to do so. However, if you consider these tips, you should see significant differences within a couple of months to a year.

That being said, we understand that unforeseen emergencies may occur at times, and you may need an urgent loan before your credit score has improved.

At Goldstar Credit, you can still get an urgent loan even if you have a bad credit score.

Apply now and we can share more with you.


While we try to provide the most accurate information on this website, it may not reflect the most current developments. The information on this website may be changed without notice and is not guaranteed to be complete, correct, or up-to-date. All information provided is for informational purposes only and shall not be relied upon as professional advice. We shall not be liable for any loss or damage resulting from the use of this website

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