Importance of a Credit Report and how it may affect you

What is a Credit Report?

A Credit Report is a record of your personal credit facilities and total credit limit contributed by Credit Bureau Singapore's (CBS) Members. CBS's members vary across major credit card providers, retail banks and financial institutions in Singapore. Through this report, lenders are able to assess how well an individual can repay their debts based on many factors like: bureau score, total credit limit granted, number of credit facilities, total outstanding balances. The Bureau Score is also presented in a credit report that encapsulates a summary of your credit payment history compiled with other various data in your Credit Report. At CBS, the credit scores are calculated from an algorithm based on information in an individual's current available credit data. The score ranges from 1000 to 2000, where individuals scoring 2000 have the lowest likelihood of defaulting on a repayment and individuals scoring 1000 have the highest probability of default.

In summary, lenders use your Credit Report to assess your credit worthiness and determine your future loans repayment behaviour. Such powerful information is crucial and may affect your life, which is why having a good credit score is highly treasured. Let us dive in deeper on how having a good credit report may potentially affect you.

Increases Your Accessibility to Obtain Loans and Credit Facilities

Your Credit Report reflects your competency in fulfilling debt obligations. Therefore, credit providers utilise this information to make quick and well informed decisions before approving a loan or extending out a new credit facility to you. Examples of credit facilities available in the market are: Credit Cards, Personal Loans, Housing Loan, Vehicle Loan and Renovation Loan. Consumers with poor credit score might suggest a higher probability of defaulting future payments and pose potential risk to future credit lenders. With a good credit score record, applying for loans or credit facilities will be a breeze and help to boost confidence for future credit lenders.

Increases Your Chances of Employability

What many are unaware of is that some employers do request for your Credit Report as one of their evaluation tools to conduct pre-employment screening. The purpose of this background check is to ascertain the characteristics of the candidate and to uncover any possible public records such as recent law litigations or bankruptcy orders. A poor credit score may suggest financial irresponsibility and even potential data mongering that might seriously damage the company's reputation in the future, hence putting the candidate at a disadvantaged position. In comparison, employers will be more likely to hire someone who is financially stable and able to show that they have the capability to handle their personal obligations.

How Can I Improve My Credit Score?

Do take note that the Credit Score is a fluid number and it adjusts in tandem with changes in your credit information. Having a good credit score is a journey, not a destination. Hence a conscientious and continuous effort to improve your credit score needs to be maintained, else your credit score may slip. Here are some good tips that you may pick up to achieve that healthy credit score:

• Stay alert on your payment due dates — set a calendar reminder or schedule recurring monthly repayments for all of your credit facilities.
• Make full payments if possible, otherwise pay the minimum amount — missed payments accumulate interest and make it harder to settle balances over time.
• Avoid applying for too many credit facilities within a short span of time — this can be perceived as a sign of financial desperation and hurt your credit score.

My Credit Monitor (MCM)

My Credit Monitor (MCM) is a credit monitoring tool that helps you to keep an eye on your credit report on your behalf so you can have peace of mind wherever you are. MCM comes with a choice of 6 months or 12 months subscription service and complimentary credit reports. The subscriber will be able to receive notification alerts for any predetermined activities on your credit report, providing the earliest possible indicator via SMS or email.

Where Can I Get a Copy of My Credit Report?

To check your credit score, you can purchase a copy of your credit report at creditbureau.com.sg.

How TCC Can Help You Clear Up Your Credit Report

TCC has helped many members to clear up their outstanding balances which in turn improves their credit report ratings. Please call us at 6319 3700 or email marketing@tcc.org.sg to find out more!