I am currently a student (above 21yo). I have a few debit cards used for shopping and daily needs. I dont have any cashflow issues or budget problems, and I do not spend unnecessarily. Should I apply for a credit card to improve my credit score? - Seedly
 

Credit Card

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Asked by Anonymous

Asked on 02 Jun 2018

I am currently a student (above 21yo). I have a few debit cards used for shopping and daily needs. I dont have any cashflow issues or budget problems, and I do not spend unnecessarily. Should I apply for a credit card to improve my credit score?

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Aik Kai
Aik Kai
Level 7. Grand Master
Answered on 03 Jun 2018

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.

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Pascal S
Pascal S
Level 5. Genius
Answered on 03 Jun 2018

Get a credit card for miles/cashback/rewards - and that's about it.

Other than that, if you are tracking your cashflow, and do not have any problem, you don't need to look for more complications.

The less cards, the less worry.

Hope it helps

Pascal

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Charmaine Ng
Charmaine Ng
Level 6. Master
Answered on 02 Jun 2018

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!

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Gabriel Tham
Gabriel Tham
Top Contributor

Top Contributor (Jan)

Level 9. God of Wisdom
Answered on 02 Jun 2018

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.

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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;

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Gabriel Lee
Gabriel Lee
Level 8. Wizard
Answered on 23 Sep 2018

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

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Yong Kah Hwee
Yong Kah Hwee
Level 8. Wizard
Answered on 23 Sep 2018

Nope, your credit score does not improve.

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Good Day Every Day
Good Day Every Day
Level 8. Wizard
Answered on 18 Sep 2018

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.

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HC Tang
HC Tang, Financial Enthusiast, Budgeting at The Society
Level 8. Wizard
Answered on 18 Sep 2018

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

https://www.singsaver.com.sg/blog/how-to-get-aa-credit-risk-grade-in-singapore

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