How To Clear A Bad Credit Rating In Singapore (And Why You Should)

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Do you have a bad credit rating that you want to fix? You came to the right place. In this article, we will provide you with a few tips on how to clear bad credit history Singapore. However, before we discuss the many ways of clearing a bad credit rating, let’s go through the difficulties you might have if you didn’t improve your credit score.

1. Increases the chance of having your loans and credit lines rejected

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Not improving your bad credit score will lead to a harder time getting your mortgages, credit cards, personal loans, and other credit approved.

2. Harder time getting a new apartment

Any landlord worth their salt will check the credit score of their prospective tenant as part of their evaluation process before signing any lease contract. As such, you will have difficulties getting good apartments if you have a bad credit score.

3. Utilities will require security deposits

Utility service providers like telephone, internet, electricity, water, etc. may impose a security deposit in case you apply for their service. This can be problematic if you are moving to a place that doesn’t have existing utilities.

4. Difficulties in obtaining a new mobile phone plan

A lot of phone providers do background checks that include credit score inquiries prior to signing any deals. However, you will be only affected here if you are going for a postpaid plan since there are plenty of phone carriers that provides prepaid plans that do not need a credit assessment.

5. Issues when applying for work

Potential employers have the ability to look at a limited variant of your credit history within the background assessment procedure. They employers want to check their applicant’s ability to manage money, especially if the job they are hiring for entails handling funds. Even if the job description does not include money management, the employers will still choose someone who is responsible compared to someone who has a lot of unpaid debts. Even though potential employers won’t be able to view the entirety of your credit history, they will see activities such as skipped payments, unpaid debts, and other details that will make your impression look bad.

6. Increased insurance charges

This may not be applicable to all insurance providers, however some insurance companies impose higher insurance premiums for people who have a low credit score. Insurance companies may perceive your debts as being a higher risk, leading to them increasing your premium to compensate.

Now that you are aware of the problems you can potentially encounter with a low credit score, the importance of fixing it is apparent. In the next section, we will discuss how to do that.

Common ways of improving your credit score

1. Get a copy of your credit report

Before you went out of your way to fix your credit score, it is a good idea to get a copy of your credit report first. This is important since it can provide you with crucial information regarding the issues that are affecting your credit score. It might be your unpaid debts, late bills payments, or excessive loan applications. Once you know what is affecting your credit score, you will be able to precisely work on them. Trying to fix your credit score without knowing what exactly caused it to be low is a hard thing to do.

2. Lay low on your loan applications

If you are working to increase your credit score, it is recommended that you avoid sending out applications for new loans, whether it is an online application or at the loan company’s office. This is because when you apply for a loan, the lender will check your credit score as a form of evaluation. This will result in a note in your credit score, which may affect your credit score negatively. You might be wondering why your credit score is being affected when you are just applying and not actually getting the loan? The answer for this is simple: loan companies will perceive you having a higher credit risk if you are trying to get loans from many loan providers.

If you must absolutely apply for a loan, do soft inquiries instead. They will not have a big effect on your credit score. However, you must do them all at the same time period, so that even if they did affect your credit score, they will not have much of an impact.

3. Pay off your debts

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Paying your credit balances is the most effective way of improving your credit score. True, this is easier said than done. However, there are certain things you can do to try and pay off your debts. You can consolidate all your smaller debts into a single large debt. You can also use your savings to pay off your existing debts. Even if you are not able to completely pay off all of your balances, it is important that you at least strike some of them off the record.

4. Work with a credit score repair firm

If all else fails, you still have one more option – hire a professional credit score repair company. There are companies out there who specialize in helping people get out of bad credit score for a fee. Before you get the services of a credit repair firm, be sure to check out reviews about them first. You can usually tell if they are good and effective if they have satisfied customers. Also, they should be transparent about their methods to ensure that they are doing legitimate credit score repair methods.

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