Reasons for Bad Credit Score | Why Do You Have a Bad Credit Score Singapore

Credit Cards

Give yourself a pat on the back if you’ve been able to apply for any credit card you want and take out loans to finance the Singaporean dream – your Condo, COE, and Car – without any hiccups! All of this was made possible by your financial discipline. You basically kept your finances and credit in order. In this blog, we tell you the reasons for a bad credit score in Singapore. 

Reasons for a Bad Credit Score in Singapore

The Effects of a Poor Credit Score

Assume you decided to be lazy one day and stopped paying your bills on time. You will have a low credit score as a result. What are the ramifications of a poor credit score? Banks will be wary of you because you are a high-risk (will not pay up) customer. In Singapore, some expected side effects include:

Obtaining a car loan will be difficult

You may have difficulty refinancing your home loan to lower interest rates.

Missed Payment

Don’t worry if you genuinely missed a home loan payment because you got Covid-19 while travelling. The decline of your credit score does not happen overnight. A late payment or two may have no effect on your credit score. However, you will be charged late fees. You can call your bank, explain your situation, and ask them to waive the late payment fees if you have a good and long-standing banking relationship with them.

I have a poor credit rating. What should I do?

However, if you currently have a low credit score, consider the previous year and how you may have mismanaged your finances, missed credit card payments, and any other loan repayments. Also, talk with a friend about your spending habits, motivations, and relationship with money and finances.

Credit Cards: Are Promotions and Rewards Enticing?

As customers, we are frequently duped by brand marketing communications. We apply for more credit cards than we need simply because an extraordinary item is being given away for free as part of an ongoing promotion. We eventually realized we didn’t need that second or third credit card.

Credit Cards: An Overabundance of Credit Cards

We all enjoy the benefits of getting new credit cards, but be wary of old credit cards in your wallet. Don’t let a credit card sit idle after you’ve used it. Credit card annual fees that are not paid are subject to late payment penalties and interest. Unpaid fees can have a negative impact on your credit score.

Always plan a day for credit card housekeeping. Cancel all unused credit cards. Also, having multiple credit cards in your name can lower your credit score because it indicates a greater need for credit!

Credit Cards: Spread Out Your Expenses

Happy new billing cycle! It’s time to spend! If that’s the case. The overspend is most likely your personality type. Always spread out your expenses. People tend to overspend during payday week and struggle later in the month when unexpected expenses arise. It could be your child becoming ill unexpectedly, medical expenses, a friend or colleague’s baby shower, a wedding red packet, or your microwave oven breaking down.

Any of these events can easily exceed your credit card limit and have an impact on your bill payment. Suppose you have a habit of overspending. Try setting a weekly budget for yourself and sticking to it. This will provide you with a buffer to spend on emergency situations, or better yet, to save whatever is left over!

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