Covid-19 and Your Credit Score

During this period of unprecedented disruption to our lives, many of us have had to adapt to deal with the restrictions and challenges of this new reality. Yet, every dark cloud has a silver lining and during this crisis, this has manifested in the form of additional time for personal development and for our loved ones. While we strive to keep healthy in these trying times, we should also not ignore our financial health. Being financially healthy would allow us to assess credit when we need it.

What is a Credit Score?

Your credit score is a number used by lenders as an indicator of how likely an individual is to repay his/her debts and the probability that the individual will default on payments. Your CBS credit score ranges from 1000 to 2000, with a score of 1000 indicating a higher likelihood of default then a score of 2000. In most cases, lenders will want to know your credit score to obtain a fast and objective assessment of your credit risk. A good credit repayment history will make it easier for you to obtain credit and qualify for loans.

Things you can do to improve your credit score:

Pay off your Debt

Staying at home more means that some of us have spare cash on hand, which we can use to pay off debt. Lenders like to see low utilization of credit facilities, so paying off part of your debt will go a long way towards improving your credit score. Paying off a larger portion of your debt also means that less interest is accrued over time, saving you money in the long run.

Keep up-to-date with Payments

Repayments patterns have a large impact on your credit score. Full and on-time payments are reflected positively while late or missed payments will lower your credit worthiness. If you are experiencing a financial hardship during this time, contact your lender to find out about the options available to you. Programs such as the Debt Management Programme (DMP) offered by Credit Counselling Singapore (CCS) and the Special Financial Relief Programme (SFRP) allow you to convert your existing unsecured credit facilities into a lower-interest term loan. Refinancing your debt through SFRP does not affect your credit score.

Review your Credit Report Regularly

Improving your credit score starts with identifying what you need to work on. Contact Credit Bureau Singapore today to obtain a copy of your credit report at $6.42 per copy, or drop by your nearest SingPost branch. Now with My Credit Monitor (MCM), staying up-to-do with your credit report is easier than ever. In addition to sending you a quarterly report, MCM will alert you to material changes to your credit report so that you are always kept up to date with your credit standing. Subscribe now for peace of mind.