Improve Your Credit Score | Good Credit Score for Personal Loan
Loans | Personal Loansby Priyadarshini 17 September 2021
If you’re looking for a personal loan and want to increase your chances of getting approved then you must know the importance of credit score. The personal loan you applied for will get approved quickly depending on the shape of your credit score. So, what should you do to keep your credit score in tip-top shape? In this blog, we tell you how to improve your credit score in Singapore. Here are a few ways to get your personal loan approved quickly in Singapore:
Improve Your Credit Score in Singapore
Good Credit HistoryA good credit habit will get you a thumbs up from lenders, who always look at your credit rating to determine your “creditworthiness.” Your “creditworthiness” refers to how reliable you are at repaying what you owe. And this determines how “worthy” you are to receive financial credit. For instance, let’s assume a hypothetical scenario – if you’re lending money to a friend, you wouldn’t want to lend to someone who never seems to return the cash. Or someone who requires multiple reminders because they always “forget,” right? A person with a good credit score is able to manage their debts effectively by paying bills on time. This can include paying their credit card bill in full every month before the due date. As well as staying on top of monthly repayments for other loans such as a mortgage, or car loan, etc. They have also never declared bankruptcy, have never defaulted on a loan, and have a clean financial record. You can obtain a copy of your credit report from the Credit Bureau of Singapore. There is a small fee of $6.42 (includes GST), but at least this will let you know what your credit ratings are.
Avoid Applying to Multiple BanksThe number of applications you send does not increase your chances of success. It’s not like sending out thousands of resumes to various employers in order to increase your chances of being called in for an interview. When you apply for a new loan with a bank, the bank will pull your credit report. And this inquiry will be added to your file. If you apply to five banks, each of them will run inquiries, and your file will have multiple inquiries. Banks can see that your file has multiple inquiries, which influences their decision to approve your personal loan. Too many inquiries may indicate that you are attempting to incur more debt. This, in turn, raises the bank’s assessment of the maximum potential loss they can suffer if you were to default on payment. So, pick your bank wisely. Do your homework ahead of time. But don’t apply for a personal loan until you have made your mind.
Have a Credit Card? Apply with the Same BankIf you have an existing relationship with a bank, apply with that bank for your personal loan. As an existing customer, the bank will have a better understanding of your credit history. It will have your financial records on file as well. So, if you already have a credit card with this bank, the bank will most likely examine your credit history and grant you an appropriate loan.
Update Your Credit LimitWhen was the last time you checked the credit limit on the credit card you’ve had since you started working? Your income has most likely increased, and you are now eligible for a higher credit limit. Keeping your credit limit in line with your current salary may allow you to apply for a larger loan from your credit card company. Remember that the amount of money you can borrow is determined by your income. However, even if you have a credit limit of $50,000, you should not use the entire amount when applying for a personal loan. Limit your loan amount to what you need. Borrowing too much may result in higher interest rates. Also, keep in mind that smaller loan amounts are approved faster.
Looking for a Personal Loan?Now that you know how to improve your credit score in Singapore and get a personal loan approved quickly by:
- Maintaining a good credit habit
- Avoiding mass applications to multiple banks
- Applying at your credit card issuing bank
- and Keeping your credit limit up to date
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