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#Finance101: 4 tips for a better credit score

The one underrated number that hugely affects your life

26 Oct 2023
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#Finance101: 4 tips for a better credit score

You may not think about it often, but there's a four-digit number that has a huge impact on various dimensions of your life. It’s your Credit Score.
This number determines your eligibility for loans or credit cards. And given that few people in Singapore can buy a home without taking a loan, this is a very important number.

What is your Credit Score?
Your credit score is a number which ranges from 1000 to 2000. A lower score signifies that you’re a borrower of higher risk. This makes it more challenging to secure loans. On the flip side, a higher score opens doors to financial opportunities and stability.

In general, your score will be based on how you’ve repaid your debts during the last 12 months.

A quick guide on how to get a better Credit Score*
When lenders decide to lend you money, there’s just one primary concern – whether or not you’ll be able to pay it back. Having too much debt suggests that you’re living an unsustainable lifestyle; which will affect your ability to pay back debt at some point. Here are some things that you can do to strengthen your financial health:

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Put a cap on new accounts

Put a cap on new accounts

Each new account is a responsibility. Lenders might think you’re in financial difficulty; impacting your CS*
Always pay on time

Always pay on time

No one likes late payments, especially borrowers. Timely repayments will elevate your CS* and reputation
Have a track record

Have a track record

Long-standing, well-maintained accounts add to your CS*; a testament to your reliability to pay back debt
Limit loan applications

Limit loan applications

Frequent loan applications can affect your CS* and signal to others that you may be living beyond your means

For more information, you can also check out the official Credit Bureau Singapore page.

Your credit score is more than just a financial metric; it's a life metric.

Taking control of it can mean taking control of your opportunities, your choices, and ultimately, your life's trajectory. Make this underrated number work for you, not against you.

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