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What is a credit score and why is it important? A credit score is a snapshot of your financial health. Are you someone who pays your bills on time? Do you often forget to pay off your credit card bills? Have you defaulted on a loan before? All these details are captured on your credit score.
Why is this important?
With a good credit score, you are more likely to get that loan or credit card you apply for. Plus, you have more options to choose from! Planning to get a car? Renovate or perhaps even buy your first home? Or are you looking to further your studies? Keeping your credit score in tip-top shape will give you more options when the time comes to take a loan!
Here are 3 tips to help you bring your ‘A’ game:
Establish your credit history!
Things that affect your credit score include the amount of credit owed and frequency of credit taken up. So, an effective way to start building your credit history is by applying for a credit card. It’s also worth considering starting with a small loan - just make sure you understand the terms and conditions and that these are right for your needs.
Pay on time, every time
Spend within your limits and be sure to make your payments on time, all the time. Choose financial products that fit your lifestyle such as giving you the flexibility to choose your repayment date for loans.
Keep it to five (or less!)
It’s tempting to maintain multiple credit cards to take advantage of promotions. However, this can make it difficult to keep track of all your financial commitments and you might miss a payment or two. Consolidate your credit products to five or less! This should include credit cards, personal lines of credits or personal loans. And a reminder to only apply for what you need.
A friendly reminder: Credit facilities can help with your cash flow - be it for life expenses or emergencies. But before you commit, make sure you can afford the repayments!
Curious what your credit score is? Simply go to the Credit Bureau of Singapore to register and buy your credit score report for a nominal fee of S$8 plus prevailing GST.
Look out for more finance tips by clicking on the "Finance Hacks" tag below! Because when you win, we win.
Psst! Here's something else you should know!
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