Credit Reports

Before you’re granted a loan or a credit facility, banks often look at your credit history to assess whether to accept or deny your request. What is a credit report and who handles the information on it?

The Credit Bureaus

The agency that manages info about your credit history is called a credit bureau. They’re tasked to collect and store information on your loans, credit applications, debts, and repayment records. They get their data from credit companies, banks, and public records.

In Singapore, there are only two recognized credit bureaus allowed to obtain data from banks and financial institutions: the Credit Bureau Singapore (CBS) and the DP Credit Bureau.

Licensed moneylenders from, on the other hand, have the Moneylenders Credit Bureau (MLCB). The MLCB is the agency responsible for allowing moneylenders to conduct credit checks and assist those who show risks of over-borrowing.

The Credit Report

The credit report is a document containing all info on your credit history, regardless of the lender you’re in business with. Lenders look for this document before they approve any loan application. You can also request a copy of this document for your perusal.

Credit reports will contain the following information:

–    Personal profile excluding your telephone number and contact address.

–    All records of previous credit checks can be found in it.

–    Repayment trend for the last 12 months.

–    Default records.

–    Bankruptcy records which are retained for five years after the borrower has been discharged.

–    Terminated and closed credit account which are retained on record for three years after they were closed or terminated.

–    Aggregated credit limits and outstanding balances.

Your credit score defines how likely you will be able to repay your debts. Using this score, banks can determine whether to approve your loan or credit card application. They can also use this to identify the interest rates and repayment terms suitable to your financial capabilities. Having a good credit history will make it easier for you to apply for a loan in the future.

If you need to check your credit history, you can contact either the DP Credit Bureau or the CBS.

Factors that Affect Credit Reports

Here are the various factors that affect your credit rating:

•    Credit history

An established credit history affirms trustworthiness as a debtor. This is why many people start their line of credit as early as they can.

•    Current credit accounts

This refers to the number of active credit accounts you have. However, if you opened multiple credit facilities within a short period, this is a possible red flag to creditors. They may think you’re overextending your funds and looking for a way to pay other debts.

•    Enquiry frequency

Applying too many times to open a credit facility might mean you’re looking into taking more debt than you can handle. Apply only when you need it.

Disagreements With Your Report

If you see an error or a disputable entry in your report, you can contact the bureau about it. They’ll investigate it and inform you of the outcome of their examination. If any corrections are made, they’ll send the revised reports to involved banks.

Keeping a Good Score

To maintain a healthy credit score, always pay your outstanding balance regularly and in full amount. Always track your due dates, so you don’t miss them. It’s better if you settle your balance ahead of time.

Don’t open too many credit lines at once. As much as possible, keep your active credit facilities to a minimum for better management and lesser monthly dues to think about.

Comments Off on Credit Reports