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    Impact of Your Credit Report on Your Future Applications

    What is a credit report?

    A credit report is a detailed and extensive history of your credit behavior. It contains an aggregate of all your credit transactions including payments and additions on all your existing lines of credit.

    Who prepares your credit report?

    Presently, Singapore has 2 credit bureaus that are authorized to provide credit reporting services. The Credit Bureau (Singapore) Pte Ltd. (CBS) and the DP Credit Bureau Pte Ltd. (DCBP) perform credit checks and prepare credit reports on Singapore Citizens, Permanent Residents and foreigners. The information to prepare credit reports are provided by their members and affiliates that include banks, credit card companies, other financial institutions, utility companies, etc. They also get their information from public records.

    Who can view your credit report?

    Credit bureaus in Singapore provide your credit report to their members in response to an enquiry made by them. Members make an enquiry to the credit bureau to view your credit history when you apply for a product or service from the said provider.

    Additionally, you can also view your own credit report by applying for a copy with the credit bureau. Currently, the charge for a credit report from CBS (Credit Bureau Singapore) is S$6.42 that includes GST. For different modes of delivery, express delivery, etc. additional charges will be applicable.

    What information does your credit report have?

    Your credit report will contain information that includes:

    • Your personal details such as your name, NRIC number, etc. It will however not include your contact information.
    • An aggregate of your lines of credit. It will also include credit lines you have closed in the last 3 years.
    • Your debt repayment history and pattern for the last 12 months.
    • It will also contain information on any defaults on credit lines. Such defaults will appear on your report for 7 years from the date it was recorded by the credit bureau.
    • Bankruptcy records will be appear on your credit report for a period of 5 years from the date it was recorded by the credit bureau.
    • An aggregate of your outstanding balances.

    What impact does your credit report have on your future applications?

    Simply put, based on your credit report, lenders (banks and other financial companies) will analyze and evaluate whether you are eligible to open another line of credit with them.

    When applying for a product or service, your lender will consider various factors before approving or rejecting your application. Your credit report is one of the most important factors considered on your application. When you submit your application, your lender will immediately contact the credit bureau and request a copy of your credit report. If your credit report is good, your application will not only be approved, you will also get the best package offered. If your credit report and score is subpar, you might not only lose out on good rates but your application itself might get rejected.

    Individuals who have a low credit score, are deemed as posing a high credit risk, i.e. increased chances of defaulting on the applied line of credit. No lender wants to take a chance on a potential defaulter. Therefore, it is important that you maintain a good credit report and score, in order to increase your chances of approval.

    There are various factors that affect your credit score, which will further impact all your future applications. Common factors affecting your credit score include:

    • Having too many open lines of credit: The more credit lines you have open, the higher your outstanding debt will be. The more you owe, the worse your credit score will be. Lenders will not be interested in extending their services to applicants who have an existing pool of large outstanding debt.
    • Making late payments: Late payments of over 30 days are recorded on your credit report, branding you as a delinquent. Your corresponding credit score will not be anywhere close to being noteworthy. Lenders may not want to offer their products and services to applicants who can’t be trusted with making payments on time.
    • Your credit history: This is a snapshot of all the payments you have made on your credit lines over the past 12 months. Your repayment history can either build your credit score or tear it down. Lenders will look for applicants who make regular payments, keep their outstanding balances in check and have a healthy credit limit.
    • Making too many enquiries/applications over a short period: Every time you apply for a product or service or make an enquiry, it gets recorded on your credit history, irrespective of whether you have gone through with the application process. Multiple enquiries within a short period can bring down your credit score. It will also give lenders the impression that you are unable to manage your existing debt and can potentially default on their credit line if they approve your application.
    • Defaulting on a credit line: If you have defaulted on a credit card or a loan, your default will be recorded on your credit score. Once it has been recorded, it is very difficult to pull up your score as it will appear on your report for 7 years. Lenders are not keen to approve applicants who have defaulted previously as the chances of defaulting again are high.
    • Declaring bankruptcy: If you have declared bankruptcy or in the middle of a legal battle, most lenders will not extend their services to you. If you have been discharged from bankruptcy, you will be required to submit an official discharge letter from the court, after which your bankruptcy record will be removed from your credit report after 5 years. This is damaging your credit score and lenders do not prefer dealing with applicants who have declared bankruptcy in the past as they pose a high credit risk.

    Credit Score – What is good and what is bad?

    CBS provides credit scores in 4 digits between 1000 and 2000. The closer your credit score is to the 2000 range, the better. This is because those who have scores closer to the 2000 range, have the least probability of defaulting and those closer to the 1000 range have the highest probability of defaulting and are regarded as delinquents.

    Table: Find below the credit ratings and scores awarded to different score ranges:

    Risk Grade

    Score Range

    Probability of Default

    AA

    1911 to 2000

    • Min: 0.00%

    • Max: 0.27%

    BB

    1844 to 1910

    • Min: 0.27%

    • Max: 0.67%

    CC

    1825 to 1843

    • Min: 0.67%

    • Max: 0.88%

    DD

    1813 to 1824

    • Min: 0.88%

    • Max: 1.03%

    EE

    1782 to 1812

    • Min: 1.03%

    • Max: 1.58%

    FF

    1755 to 1781

    • Min: 1.58%

    • Max: 2.28%

    GG

    1724 to 1754

    • Min: 2.28%

    • Max: 3.46%

    HH

    1000 to 1723

    • Min: 3.46%

    • Max: 100%

    When the credit bureau does not have sufficient credit information to assess and award a grade, a “CX” rating will be awarded. “CX” rating is an ungraded credit score and means “Insufficient Credit Activity”.

    How can you apply for a credit report?

    It is advisable to check your credit report regularly to ensure that the data is accurate. You can purchase your credit report from either of the two recognized credit bureaus – CBS or DPCB. To purchase your credit report, your SingPass ID and password will be required. There are 2 ways of applying for your credit report:

    • Online – Visit the official website of CBS or DPCB and apply online for your credit report.
    • Visit any of CBS or DPCB locations and apply for your credit report in person.

    You can monitor your credit report by subscribing to “My Credit Monitor” or MCM service offered by CBS.

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