Your credit report is essentially a statement that a credit bureau prepares. It records your credit activity, such as your borrowing as well as payment history from all retail banks, credit card issuers and accredited financial institutions in Singapore. It can also contain publicly available information such as bankruptcy.
From being able to better your chances of getting loans to protecting yourself from identity theft, a credit report can be very beneficial. Here’s how.
Your credit report is a record of your financial behaviour. It tracks your borrowing and payment history, also known as your credit history.
When you pay attention to your credit history, you can easily spot any incorrect transactions or details that may have mistakenly been included in the report, such as the status of an account or overdue balances.
If you spot any of these, you can dispute the completeness or accuracy of it by consulting your credit bureau and they will post a notice in your credit file that the credit data is being disputed and is under investigation. That way, you can prevent any lenders referring to your credit file from making decisions based on incorrect information.
There is another potential meaning of such incorrect information, and one that is far more grave. If you spot any transactions or payments that you haven’t made yourself, it could mean that you have been a victim of identity theft. So by obtaining your credit report, you can spot and then initiate investigations against the same.
The good news is, credit bureaus can offer protection against such an occurrence. Credit Bureau Singapore (CBS), for instance, provides the option for you to subscribe to the ‘My Credit Monitor’ service.
This service carries out daily checks and notifies you in the event of any key changes being made to your report. This helps you stay ahead of the game and prevents identity theft from occurring in the first place.
Your credit score is a number used by banks and financial institutions as an indicator of how likely you are to repay your debts. In Singapore, CBS develops its score jointly with TransUnion using advanced modelling and analytics. The score takes into account Singapore’s full market data from retail banks about consumers’ credit information.
This score ranges from 1,000 to 2,000; the higher the score, the better the credit rating. Individuals scoring 1,000 are most likely to miss payments, whereas those scoring 2,000 have the lowest chance of doing so.
Thus, lenders would prefer to extend credit to those with a higher score rather than a lower one. In some scenarios where loans are granted despite a low credit score, a higher interest may be charged.
By keeping track of your credit score, you can gauge the likelihood of getting a loan for any important expenses you may need to incur. If your credit score is low, your credit report should send alarm bells ringing within you to work towards on-time repayments of loans or credit card bills to help to fix your score over time.
Finally, you should also be aware of what your credit report can’t help you with. Your credit report does not include any information about your deposit accounts, income details, investments, telco bills or your partner’s credit history.
If you have applied for a new credit facility in the last 30 days with any of the CBS member banks and financial institutions, you can receive a complimentary copy of your credit report from CBS. Otherwise, you can purchase your report online to understand your credit report better.