How does the credit score system work in Singapore?

Hi Anon,

Good job on getting a BB grade as a student! Your credit score is definitely going in the right direction. Here's my take on your questions:

1:
This has 2 scenarios - the first is if you cancel your student card while you have no other credit cards that are active, and the second is if you cancel your student card after you have other active credit cards.

I would say that the first case is not ideal, because that means there is a period of time where you have no active line of credit open. While I am unsure of how this will affect your credit score, I wouldn't risk having the credit that you've built go to waste.

For the second case, your credit score will not get reset. This is because your credit score is not tagged to your card per se. However, it will ding your credit score because:

a) you now have 1 less line of credit, which in turn means
b) you have a smaller exposure to credit than you did before, so
c) for the same amount of credit spending, your credit utilization rate is now higher.

All of this will negatively impact your credit score.

However, it shouldn't make too much of an impact in the long run and your credit score should recover quickly.

2:
In general, they are. You may refer to the CBS website for the list of factors that impact your credit score in SG.

Hope this helps!

Regards,
thefrugalstudent

The credit report will take into account all of your credit history. Even if you cancel the student credit card, it will still appear in your credit history. However the credit rating will change according to how you use your credit i.e. new credit cards, loans etc. It may be good to show that you have a track record of being able to manage credit.

As for increasing credit ratings in SG, I believe it is one aspect of your financial situation that the banks will look at. However I am not sure how much weightage it carries. (I have been rejected for a credit card application even though I have a good enough rating.)