Maintaining a good credit rating is really important, especially if you are planning to apply for a big loan. It is essential to be aware of all the important details about your credit rating prior to seeking a personal loan in Singapore. Aside from improving the odds of having your loan accepted, having a good credit rating might also allow you to take out a loan with negotiating favorable terms and conditions.
A high credit rating can make your borrowing extremely easy, and also provide you with a variety of advantages. Banking institutions, as well as other loan companies are going to be eager to give loans to you if you possess an excellent credit rating. Therefore, you may be entitled to any sum of loan, obtain it faster, and get reduced rates of interest. On the contrary, in case you have a negative credit rating, it can be hard to find a lender that is willing to provide you a loan.
If you are concerned about your credit score in Singapore, we will fill you in about how it works. In Singapore, there a couple of authorized credit bureau, which is the Credit Bureau of Singapore and DP Credit Bureau. Both of them monitor a variety of facets of your credit history, which is then compiled in a single report that lists every single loan that you took, your payment history, as well as the quantity and kind of queries that you sent to licensed money lenders.
Below are some tips on how you can improve your credit rating in Singapore:
1. Do not miss out on your repayment schedule
A number of people with credit cards believe that it is okay to hold off repayments provided that they pay the late repayment charges. However, this is simply false. A repayment delay in excess of 30 days is going to place you within the overdue category and within a set time period, this will affect your credit rating in a negative way.
To prevent making this kind of blunder, try maintaining a journal of every one of the dates in which you are scheduled to make a payment. In case you are not able to settle the repayment of your loan promptly, you need to notify the loan company ahead of the payment due date.
2. Utilize your credit cards properly
When you have multiple credit cards, you can often find yourself being tempted to use your credit cards every time you go shopping. This is especially true if the deadline for repayment is still after a few weeks. Coupled with the fact that you can generally pay for the lowest amount allowed and delay payments on the rest of the balance, it is really easy to keep swiping your credit card. However, this tactic will backfire on you when you wind up being slapped with substantial interests due to your accumulated credit card debt balance.
As opposed to making use of your credit card like this, it is recommended to utilize it as a payment tool. Once you obtain your monthly credit card statement, it is best to pay back the whole amount on the credit card. Provided that you accomplish this, your credit card company might give you incentives such as cash backs.
3. Reduce the number of loan companies that you are getting loans
A lot of Singaporeans acquire a loan in order to get the funds for purchasing their houses. Auto loans are also popular in the city-state. In combination with these, people might also have two or more credit cards, in addition to having personal loans. In no time, you will end up in a situation in which you need to keep an eye on a number of lenders. This can be a risky position since being delayed in even just a single loan provider can harm your credit rating.
Picture being required to monitor and handle a number of bills coming from numerous loan companies, each with their own separate terms and conditions, different interest rates, and different due dates. Doing this for multiple lenders, credit card providers and loan companies can be a nightmare. The practical strategy is to restrict the number of loan companies that you get loans from. This way, it will be much easier to keep track of the payment schedules for each company.
4. Do not make a lot of loan inquiries in a short amount of time
Making a number of loan inquiries for loans or a brand new credit card may reduce your credit rating. Now, you might be wondering why your credit score is getting affected negatively when you are just inquiring and not actually taking out a loan. The reason for this is the impression you send to the credit bureau when you are contacting a lot of banks or moneylenders in a short period of time. Doing this creates the impression that you desperately need a loan. Even if you are only contacting a lot of loan companies to find out the best deal for you, that action that you do can be perceived negatively by credit rating bureaus in Singapore.
For this reason, try to do a minimal number of loan inquiries within a short period of time even if you are only trying to get the best deal. You can cut down the list of prospect banks and loan companies to take out a loan by reading reviews on the internet, seeking recommendations from friends and colleagues, and by doing your due diligence.
Do you need to take out a loan for your house or car mortgage or for other personal reasons? Apply now for a loan from GM Creditz, a licensed money lender in Singapore. You can apply for a loan by visiting their website, or by visiting their office located at 111, #01-41 North Bridge Rd, Peninsula Plaza, Singapore. With GM Creditz, you will not have to worry about unacceptable terms and conditions or excessive interests, since they provide low-cost loans and flexible terms and conditions.
This is an article provided by our partners network. It does not reflect the views or opinions of our editorial team and management.
HedgeThink.com is the fund industry’s leading news, research and analysis source for individual and institutional accredited investors and professionals