Contributed by Credit Bureau Singapore
A credit report is a comprehensive record of your credit payment history compiled from different retail banks, credit card providers and financial institutions. Credit Bureau Singapore (CBS) collects these credit data amongst its participating members, a list of CBS’s contributing Members can be found here https://www.creditbureau.com.sg/about_cbs_members.html.
Through the CBS credit report, lenders are able to assess how well an individual can repay their debts based on many factors like: credit score, total secured or unsecured credit limit granted, number of closed or open credit facilities, total outstanding balances and more. The credit score presented in a credit report 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 reputation is highly treasured. Let us dive in deeper on how having a good credit report may potentially affect you.
Your Credit Report reflects your competency in fulfilling debt obligations. Therefore, credit providers utilise this information to make quick and well-informed decision before approving a loan or extending out a new credit facility to you. Examples of credit facilities available in the Singapore market are: Credit Cards, Personal Loans, Housing Loan, Vehicle Loan, Overdraft and Renovation Loan. Consumers with poor credit records might suggest a higher probability of defaulting future payments and pose potential risk to future credit lenders. With a good credit reputation record, applying for loans or credit facilities will be a breeze and help to boost confidence for future credit lenders.
Having a good credit reputation ensures that you can access funds quickly in case of an emergency, such as medical bills or unexpected expenses. It gives you a peace of mind as you will not have to worry about getting turned down for loans or being unable to achieve your goals because of unfavourable credit. The consequences of having a poor credit report can be dire, especially if you are planning to make important life-changing decisions such as purchasing a new house, paying for your children’s education or even starting a new business. You will have to seek alternative sources of funds, which may mean having to re-plan your finances and possibly delaying your future goals.
Some employers, especially in industries or finance or even government, may review credit report as part of the hiring process. Employers or recruiters may request that you submit a copy of your latest credit report to ensure your creditworthiness before hiring. Some companies even conduct annual reviews on existing hires to ensure that they are financially competent and not in financial distress. A poor credit reputation might hint financial irresponsibility which could affect employment prospects. Otherwise, such measures are implemented to prevent workplace fraud or potential conflicts of interest, which can potentially damage the company’s reputation in the future.
To check your credit score, you can purchase a copy of your credit report at https://www.creditbureau.com.sg/.
Last but not least, be sure follow and like our Facebook page @creditbureausingapore for more useful content and tips to maintain a good credit reputation!
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