How To Clear Your Bad Credit History in Singapore

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A Comprehensive Guide on How to Clear Bad Credit History Singapore

Even though you may be making payments on time, there is no guarantee you will always do that. For instance, it is possible to forget the due date, or have an unaccounted emergency expense, hence unable to repay debts. 

A Credit Bureau cannot take into account circumstances that may affect you, neither can your bank do that. Whichever the case, it is imperative to have good knowledge on how to deal with bad credit history. Do you need to recover from a bad credit score? 

We are here to help you. This article discusses the best strategies you can use, not only to recover but also to improve your credit score. Remember your credit score determines your chances of approval.


Without further ado, let’s start:

1. Take out a loan and pay it on time

Two men shaking hands and passing cash

If you have unpaid debts on your credit history, you can improve it by taking out a loan and paying it on time. By doing this, you will be negating the unpaid debts on your record, which matters to a Credit Bureau. Any improvement on your credit score is welcome since it can be the start of its recovery. 

Just be sure to continue keeping up on your other bills and financial obligations. It will do you no good if you take out a loan that you pay well if you are still failing on your existing bills. 

Paying bills when they fall due will help improve your rating. Within 12 months, you would have made substantial progress to improve your credit score.

2. Do not miss repayments on your remaining loans

A banker shows total borrowing amount to customer.

Did you know that payment history is included in your credit report Singapore? After failing to make a payment for the first time, try not to fail again to avoid worsening your credit history. Whether it is a payment for credit cards, loans, utilities, or mortgage, being on time will guarantee your credit score will improve. The best solution to remain updated on your due dates is by taking advantage of a direct debit arrangement.

Establishing a direct debit for your payments is especially useful if you are forgetful when it comes to the due dates of your bill. Just one missed payment and your credit score will be negatively affected. 

Why? Because a credit report is used to compute your credit rating. A credit report with missed payments shows you cannot handle debt. So then, direct debit can help improve your credit report significantly.

3. Try arranging a repayment plan with your loan provider

Contacting your loan provider and asking for a modification in your repayment schedule can be worth it, especially if your loan provider is a reputable company. The lender knows a negative credit report will lessen your chances of being approved for future loans. 

If your lender is sympathetic to your monetary problems, they may be able to do something to rearrange your payment schedule to make it more manageable. If you are a good customer, you will have a higher chance of pulling this off. Even if the company did not provide you with a loan payment schedule readjustment, it is still worth the try. 

Knowing the impact of a credit report, you will be quick to approach your lender once you anticipate an inability to make payments. In case you are overwhelmed with card bills, contact your company.

4. Check for errors on the lender’s part

Man reading documents

Credit rating agencies can make errors in your credit report. If you notice that your credit score went down for no reason, it might be due to an error on the part of your loan company or the Credit Bureau. 

To prevent these problems, it is recommended that you verify the accuracy of your credit report every month at least. The errors that you must watch out for include incorrect payment date, error in your name, and your payment status being erroneously reported. The pro tip here is; check your Credit Bureau report regularly. 

And by the way, it is not tedious to file an inquiry in a Credit Bureau. Why hesitate? Even if it is tedious, still it would be absolutely ridiculous to ignore matters to do with your credit report. Severally, wrong accounts have been reported in my credit report. Be careful enough to correct such mistakes. 

5. Slash your credit balances by making use of your enough cash

Wooden blocks with the word loan rates and arrow down

Credit utilization features in your credit report and it is one of the main rating factors. A Credit Bureau will examine such info when determining your rating. A good way to repair a low credit score is by decreasing the total amount of your debt. 

This may be really obvious, but this is advice that must be mentioned nonetheless. There are a lot of people who retain their saved money when they are struggling to pay off their debts. Doing this is not a great idea if you have a low credit score with a lot of unpaid debts. 

Paying your balances using your savings will allow you to save money on interests on those debts and improve credit scores. Most of the time, the interest that your savings will earn is much lower than the money you will save by cutting on your debts and their corresponding interest rates. While this may not matter to a bureau, you will save.

Even though it may feel good to have savings, it will save you more money, in the long run, to just spend your savings to clear debt fast in Singapore. In case you need more advice on this visit your bank.

6. Think about getting a prepaid card

Credit card bills may be too high if you are not careful enough to regulate them. A prepaid card has less strict requirements compared to a credit card. For instance, there is no need to go through a credit check when applying for a prepaid card. 

A prepaid card, however, needs to have funds in order to be usable, and you can only use the amount that you currently have on your card. Despite that, they will still contribute positively to your credit score as long as your prepaid card carries a monthly fee. 

The increases in your credit score might be minimal with a prepaid card, but it is still a welcomed improvement. Additionally, they will help you recover from a bad credit score since they feature in your credit report.

With a prepaid credit card, a notice of successful monthly repayments will be documented within your credit profile as long as you pay on time. This is similar to our first tip, however, taking out a loan might be problematic since you will have to take out a predetermined amount. 

With a prepaid card, you are free to choose the amount of money that you want to top up to your card. This is important, even though it may not matter to a Credit Bureau in Singapore.


The Bottom Line

Hand holding credit score document

When it comes to financial matters, good credit is critical. A lender will request a report from a Credit Bureau Singapore before approving or declining your application. It would help to know how CBS Singapore works to be successful. Also, take the time to verify your credit report. It’s imperative to build your credit history. 

Why? A lower rating does not necessarily mean poor handling of credit. It might be due to a lack of credit history. Also, avoid applying for loans from several lenders within a short time. This is because a hard inquiry a lender makes may affect credit scores for up to 12 months. 

Additionally, be determined to lower your credit card bills. Remember to take note of your outstanding balance on a loan. In case you anticipate the possibility of not beating the deadline, approach your bank or respective lenders.

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