Credit scores are a big deal, especially in a place like Singapore. Companies and institutions use them to assess a person’s financial reliability. From securing loans to acquiring credit cards to renting properties, credit scores are the gauge by which an application may or may not be approved.
Maintaining good credit standing is hard enough; what more for those who have low credit scores wanting to improve it? It can be quite challenging, but there are ways to increase your credit score with very minimal stress involved. Let’s take a look at some of them.
1. Understand Your Credit Report
The very first step to improving your credit score in Singapore is going over your credit report and understanding it fully. This document lists down your credit history—both the good and the bad. This includes:
- payment history
- use of credit
- credit history length
- types of credit
- newly acquired credit
You can get a copy of your credit report from the Credit Bureau Singapore (CBS) for just SGD $8.00 before GST or get it for free by applying for a new credit facility.
2. Create a Budget and Stick to It
The next thing you need to do is work on a realistic budget. When working on a budget, you need to be brutally honest with it, down to the last cent. Input how much money is coming in along with a detailed list of your expenses—recurring and incidental.
Having a detailed, realistic budget lets you see things from a better perspective. It gives you an idea of how much you’re making versus your actual expenses. This lets you assess your spending habits and allows you to cut back on non-essential and impulse purchases.
The only hard thing with working with a budget is developing the discipline needed to stick to it. But if you stay on track, it can help turn things around for your credit score and bank account.
3. Set Up Automatic Payments
One of the easiest stress-free ways to improve your credit score is to make timely payments on your bills. Whether they’re for utilities or loan repayments from a licensed money lender, prompt bill payments show how responsible and reliable you are with your finances.
To avoid missing payment deadlines, set up an automated payment system for your utilities, loans, and credit cards. This is especially helpful if you have a busy schedule or tend to be forgetful.
4. Limit New Credit
This one’s a bit tricky, but it can help boost your credit score. Opening a new credit account will temporarily bring it up. However, numerous new credit accounts will also reflect poorly on your credit report. Only get new credit if you really need it, like purchasing big-ticket items. If you plan to apply for new credit, wait several months after making a significant purchase.
5. Consider Debt Consolidation
If you have multiple debts, consider consolidating them. Putting them all under one loan at a lower interest rate will help you manage debt payments more efficiently, allowing you to bounce back and improve your credit score over time.
Wrapping It Up
Improving your credit score may be challenging, but with the right strategies, you can achieve it with very little stress. Be patient and consistent. Sooner or later, you will see positive results.
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