Your Singapore Credit Score — that mysterious three digit number that dictates your ability to borrow money to invest in your future. If you want control of your financial destiny, it pays (literally) to put some time into learning about how to improve your credit score. That’s why we’ve put together 6 things you can do to quickly improve your credit score in Singapore.
Everything we recommend here is specifically designed to improve your score in your Credit Bureau Report Singapore (CBS) , which is the report that works out your credit score. The higher your credit score, the better your financial freedom.
1. Pay Your Bills on Time — Every Time
Okay okay, this one is obvious right? But it’s at the top of our list because it’s absolutely crucial that you pay every single one of your bills on time, every time, no excuses.
There really is no better way to improve your credit score in Singapore than to pay each and every one of your bills on or before required. The more consistently you pay your bills on time, the more positive the light a CBS will see you in.
Everytime you get a bill (every single one!), open it immediately and check the due date. Then put a reminder in your calendar to make sure it’s paid before that date. Bonus points if you can get a prompt payment discount.
Again, this one might seem painfully obvious, but you would be surprised at how often we see this problem rear its ugly head. It’s such a simple tip, but so incredibly effective in improving your credit score in Singapore.
2. Be Attentive so You Can Dispute Any Errors in Your Bill
To err is human, but your credit card company is just about the ones and zeros, so it really doesn’t care about that. It’s in their interest to charge you money, so they are hardly going to go out of their way to check your credit card bill for errors for you.
Spend half an hour to an hour every month going through your bills to make sure there are no mistakes in them. For example, it might say that you paid your last bill on time, even though you were sure you paid it perfectly on time.
Contact your credit card company as soon as you see something not quite right and see if you can get it resolved. While credit companies are in the business of making money, they will nearly always resolve genuine mistakes that were caused by them. In fact they are obligated to investigate any mistakes, so the law is on your side. If in doubt, keep on their cases and make sure they do a proper follow up for you.
3. Be Extremely Selective When Opening Credit Accounts
Every now and then you’ll get a shiny new credit card in the mail, promising all sorts of financial fanciness. Whether it be super low interest rates or fantastic rewards, there is always a gimmick to get you hooked on another line of credit.
Don’t fall for it. They are not offering you a new credit card because they like you, they are offering it to you to put you into further debt. Most importantly your CBS will not look kindly upon you for opening up lines of credit, left, right, and centre. You might see dollar signs, but your CBS will see someone who is reckless with their lending, and might be a liability if trusted with future loans.
If you do get a credit card offer that you simply can’t turn down, make sure you pay all of your other credit card debts off first, before you start using your new credit card.
4. Don’t Close down Your Old Credit Card Accounts
So let’s say as in the point above, you get a new credit card with great benefits. You should close your old credit card accounts down right? Well, unexpectedly, no. As nonsensical as it sounds, you will actually improve your credit score in Singapore if you keep those old credit card accounts open.
Now we’re not saying spend up large on those old cards, but we are saying that you just leave those cards open and do a small spend on them perhaps once a month. Don’t forget to pay it off every month!
If you close your old credit card account, your CBS won’t be able to see the good history you have of paying off your debts regularly. By leaving the old accounts open, the CBS will have access to that historical data, and will improve your credit score accordingly.
By spending a small amount on those old cards (let’s say a coffee) once per month, you extend that good record, improving your Singapore credit score even further.
There is even one more bonus to keeping these cards open. If you do happen to get into financial trouble down the road, you will have a line of credit open to take care of things until you get back on your feet.
5. Keep Your Credit Card Balances Low
The temptation to max out your credit card every month is tempting for everybody. After all, you pay it off every month, and they want you to spend that money, right? Well sure the credit card company wants you to spend as much as they’ll allow you to — that’s how they make their profits.
But when it comes to your CBS, you will be seen as someone that might be on the edge of financial ruin. It doesn’t look good to them that you spend so much using credit as opposed to your own cash up front.
To keep things in good order for your credit score, we recommend only spending 30% of your limit every month. And hey, this would also double as an exercise in reducing your spending, so it’s a win win!
6. Only Apply for Credit When You Really Need It
If you’re the type of person that makes a lot of credit applications frequently, your credit score will take a hit, because you’ll be seen as someone who does not have their financial house in order.
What’s worse, your CBS may think that you are panicking about your cash flow, because of all of the lines of credit you are applying for. Nobody likes desperation, and it’s no different with your CBS!
Therefore it makes a lot of sense to only apply for credit when you really need it, and only after you’ve exhausted all of your other options.
What’s Next — How to Quickly Improve Your Credit Score
We’re quite confident if you take the time to implement each of the above steps, you’ll be able to quickly improve your credit score in Singapore. From there, by continuing to adhere to these lessons, your credit score will absolutely go from strength to strength.
If you have any further questions about how to improve your credit score, please do contact us, and we’ll make it a priority to help you out as soon as possible.
Have I worded this correctly?