Many people in Singapore and the world make credit decisions without asking critical questions like why and what. Yet, credit reporting is an essential part of lending that most young adults either assume or ignore.
But when you choose to borrow money, you have to keep these five things in mind. That way, you will either land better credit deals or save yourself from extra payments in the form of additional interest fees.
Knowing what lenders look out for will help you understand what to do right and where to correct in case there are credit mistakes you’ve been doing without your knowledge.
Your credit score will most likely get you or deny you a loan
Getting a loan is highly dependent on whether you have a good credit score or not. Depending on your lender, the credit score will also affect the rate of return given to you for your loan. That is why you have to keep a clean credit score to increase the chances of getting a good loan.
Now, you also have to know what your score is. Today, most youth will knock on every lender’s door, hoping to get a loan. But, instead, they go there depending on luck, which sometimes doesn’t work. So, you have to get things put in order. That way, you will strategically apply for loans, and the chances of getting them approved increases.
Therefore, you have to have a clear picture of your credit report. This information is readily available for you on different platforms at a cost.
Singapore has a few significant credit report bureaus. Each of them has a report of you from different previous lenders you’ve probably dealt with. They keep these records and come up with an aggregate score.
Your total score is an average report of these reporters. That is why you are advised to simply honor your credit obligations. No matter how small a lender is, you must repay your loan.
These lenders report to different credit bureaus. These big CRB companies aggregate reports and generate once overall that affects you.
You can get your score for free
There’s a possibility of getting this report for free. Well, most reporters will charge you to avail of this information. Some make it hard for you to get this information unless you are a lender or bank.
It is important to note that it is now possible to get this information for free. Today, Kind card providers provide credit scores of their clients for free as part of customer service.
This is a step forward, and young ones should do their due diligence to get such cards and access their credit reports. That way, they will be better advised and act diligently when looking for lenders to work with.
You can correct your credit reports
All hope is not lost when you spoil your credit report. You should know that it is possible to correct your credit score. The first step to achieving this is by repaying your debt in full. That gives the impression of your will to get back on track.
After repaying the loans you owed in total, a few lenders will be willing to risk again. If you get such a chance, it would be prudent to utilize it and repay the loans in full and on time.
Your score determines your rate of return
The credit report will determine a lot about your rate of return. The poorer the information, the higher your rate of return will be. That means you will spend more to repay the exact loan than another person for a similar amount.