Licensed moneylenders and financial institutions take the credit score of the borrower into consideration before granting a loan. Your credit score determines whether you are approved for a quick loan in Singapore or how much interest you would be charged.
According to standard consumer lending and credit risk indices, the credit score of less than 600 is considered poor. Getting a loan with such a score can be a hard nut to crack. Even if you manage to get your loan application approved, you will be charged with a high-interest rate and fee. Many people do not check their credit score until they need money urgently. If you do not want to pay a lot on interest, here are some tips you can follow to improve your credit score.
1. Clean Your Credit Report
There are several companies that provide users with their credit report. Print the report or save it on your computer. The next step is to open the report and go through all the accounts. Does it reflect any late bill payment? Or, is there any inaccurate information?
If you find any inaccurate information, be sure to approach the lending institution or the company that generated the credit report to fix the issue. The cleaner your credit report is, the higher your credit score.
2. Pay all Your Balance
Your credit score is highly affected by your current debts. More than 30% of your credit score is based on your debts. If you notice a fair or poor credit score, it means that you have not cleared your previous bills. You must specifically consider paying down the maxed-out credit cards. If the credit amount has reached the credit limit, pay it as soon as possible to improve the credit utilization rate.
Sell unnecessary items, find a second job, or take up freelance tasks to collect enough money and clear your debts.
3. Increase the Credit Limit
If paying all the debts at once seems difficult, you must increase the credit card limit to improve the credit utilization score. Boosting your credit limit is as easy as contacting the credit card company and requesting the increased credit limit.
Let’s say; you have increased the limit of your credit card, which was $1,000, to $2,000. Now that you have decided to increase the credit card limit, you can keep your credit utilization rate normal. If your current credit card company doesn’t approve of an increased credit limit, opt for another credit card issuer.
4. Clear Outstanding Balances
You often put off the payment of your electricity, water, and other related bills. The late payment will leave a negative impact on your credit score. Therefore, starting from now, you should ensure that you clear your bills on time.
By clearing your bills on time, you can raise your credit score. This is the most efficient way to improve your credit scores. You can even set online reminders for bill clearance. The sooner you pay your debts, the higher your credit score gets.
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