Asked on 02 Jun 2018
This question is no longer accepting new answers because it has been merged with Are there any benefits in applying for a student credit card? Or is it better to just stick to using a debit card?
Just want to know your concerns over your credit score. Are you using it for a loan or something?
Based on what you describe, you technically have perfect credit score, since you have no outstanding liabilities with any bank.
So, to apply for a credit card to "improve" your credit score is not going to work. Applying for any credit card DO NOT improve credit score.
Instead, just keep being prudent and only apply for a credit card when you are in the working world.
Agree.. Credit card does not improve credit score and with a credit card you may very well be more tempted to spend and land yourself in debt. Would recommend to apply for 1 credit card only to accumulate miles/earn cashbacks. You can head over here to read the reviews on some of the more popular cards!
A credit card doesn't improve your credit score. But if you haven't taken any debts, your credit score now should be near perfect.
As you grow older, it will make more sense to have credit card as you will be able to get more rewards, however at this point of time I don think there is a need for you to get a credit card as you are still a student afterall.
Yes you should maximise the use of credit cards to earn cashback/miles on the spending that you would ALREADY have been spending. But do be careful on those CC with min spend per month in order to hit a certain percentage or cashback etc. If you're not careful, you may be spending more than you can afford.
Building up your credit score using credit cards is always good as banks will be more willing to lend you (in terms of loans and future cc application) if you display good behaviour such as paying on time and in full).
Do apply for at least one as one factor for credit score is maturity - having a history of manging credit well is positive (whereas new credit files tend to have a tag "score is impacted by relatively short credit history")
as a bonus; the bank will likely access your credit history and that will by law allow you the chance to get a free credit report to understand further what factors are involved in the scoring.
of course all of this relies on being disciplined about your spend on credit card and repayment - micro managing the above is not helpful if you don't repay on time :)
(but keep disciplined about using it;
If you are able to control your spending and pay your credit bills on time every month, it's a good choice to apply for a credit card to utilise the rebates, promos and stretch your dollar further
No harm having a credit card to earn cashback. But remember to pay your credit card bills on time. However, applying for a credit card does not improve your credit rating.
owning credit card does not improve credit score.
Here's how to improve credit score:
1. Check credit report and rectify any mistake.
Free check at: https://www.creditbureau.com.sg/available-options.html
2. Pay any cc bills on time/all the time in full (not partial or min).
3. Avoid applying for multiple new cc within a short period of time
Sometimes a few new credit applications will push you from a responsible consumer to an unreliable one from a bank’s point of view. And every bank has a different set of requirements and criteria to satisfy.
Whenever you apply for new credit facilities, it would put enquiries against your credit report. Many enquiries within a short period of time can have an adverse effect on your credit score.
For your information, “Previous Enquiries” are retained on your credit report 2 years from the date of enquiry. So it takes a long time before the effect wears off.
4. keep your credit active
But if you do not use your credit, the banks cannot assess it. If you have “insufficient credit activity”, there is very limited information such as credit applications or accounts status history to derive a score.
5. Commit to keep it simple and improve your credit score
default records stay on your credit report for 3 years upon full or negotiated settlement, and bankruptcy data is retained for 5 years from the date of discharge.
It is ok if you have made mistakes before. But if you want to see the light of the tunnel, you know you have to commit to the following in the long term:
Check your credit report annually and rectify if there is any mistake
Pay your bills on time, all the time and keep your balances low
Avoid multiple new credit applications within a short period of time
Keep your credit active
And your credit score will work out fine.
Tips: Read this hack on getting highest credit score in SG
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