Credit reports and creditworthiness

What is a credit bureau?

A credit bureau is an agency that collects and stores information on your credit history, such as loans, credit card applications and repayment records.

Information in the credit report is provided by members of the credit bureau such as banks and credit card companies, and obtained from public sources on bankruptcy.

Credit Bureau (Singapore) is licensed and regulated by the Monetary Authority of Singapore under the Credit Bureau Act 2016.

What is a credit report?

A credit report is a compilation of your credit payment history collected across banks and major financial institutions. It is issued by a credit bureau to lenders, e.g., banks, finance companies, and credit card companies when they perform creditworthiness checks on you. You may also request a copy of your report from the bureaus.

Why it matters

Banks and other financial institutions will assess your creditworthiness by looking at the credit score, alongside other considerations such as income. The score is one of the factors that helps them make better lending decisions when you apply for credit facilities such as loans and credit cards.

A good credit repayment history makes it easier for you to qualify for loans and credit cards in the future.

Factors that affect your credit score

A number of different factors could affect your credit score:

• Utilisation Pattern – the amount of credit owned/ used on accounts by individuals

• Available Credit – the number of accounts open or active that provide you with a credit facility

• Account Delinquency Data – Late payment on your loan accounts

• Credit Account History – A consumer with long-established credit history is deemed to be more favourable or a reliable borrower as compared to one with limited or no credit history. Accounts with history of prompt payments will help to boost your credit rating

• Enquiry Activity – While self-enquiries will not have an effect on your credit score, increased loan application activities have a direct correlation to credit risk and indicate that the consumer’s debt exposure is likely to increase. To keep your enquiries to a minimum, try to limit the number of loan facilities and credit cards that you apply for

• Recent Credit – If you have recently taken multiple new credit facilities within a short period, it may be perceived as you overextending yourself

If you disagree with your report

If you spot an error or disagree with any information in your credit report, write to the credit bureau. The credit bureau will:

• Forward your request to the member who contributed the data after authentication or verification is completed

• Post a notice in your credit report that the data is being disputed and is under investigation

• Inform you of the outcome of the investigation

• Send the revised report to all its members who made enquiries on you in the past 12 months

Tips on rebuilding your credit score

Building back your credit score takes time and steady effort – there are no shortcuts. A positive repayment track record and responsible use of credit over time are essential.

To improve your credit score:

• Strive to pay your bills in full and on time, and stay within your spending limits

• Limit the number of your credit accounts to help you stay on top of payments and avoid extra charges like annual fees

• Avoid taking multiple loans within a short time frame

• Pay down debts as much as possible

• Simplify payments and prevent missed bills by setting up automatic debits using GIRO or standing instructions

• If you are unable to obtain an unsecured credit card, consider applying for a secured credit card instead. Prompt payment of bills whilst minimising debt accumulation can help to improve your credit score and contribute towards improving your credit account history

• Check your credit report regularly to proactively identify and address issues that may negatively affect your credit reputation. Information in the credit report can help you assess your financial situation, identify steps to better manage credit and improve your credit history over time