Tips and tricks to improve your credit score

Having a good score is no guarantee of immediate credit approval. Companies have their own analysis criteria. And they may not consult the consumer’s credit score when offering credit to him. But the fact is: a good score can help you get that much-desired funding more easily.

Below are tips and tricks that would help improve your credit.

•       Pay your bills on time. If you can, include all accounts in the direct debit. Just ask the electricity, telephone and gas companies. Today, most companies already offer this facility. So, you don’t run the risk of forgetting an account and having your name denied because of this carelessness.
•       Clear your name. To increase the score, cleaning the name is essential. If you are in arrears, negotiate with creditors and pay them all off. That should be your priority. As you have had your debts settled recently, now keep punctuality in the coming months. You need to show that your behavior has changed and that your punctuality is permanent. The longer you maintain this new behavior of paying your bills on time, the better. So, in the coming months, lenders will be able to reassess the risk of extending credit to you.
•       If you already have a credit card, use the limit less and make fewer installments. If you use up your entire limit every month, it can seem like you don’t manage your finances well and always need credit to make ends meet. So, if you already have a credit card, do your best not to use the maximum limit — even better if you can only use 30% of it.
•       Keep a good payment history. Be strict with the bills on your CPF and pay them all on time. You don’t need to pay in advance, just pay on the due date and settle the pending issues on time. If you don’t already have a payment history, create your own. This tip is especially valid if you are starting your “financial life” now, you are in your first job and you still don’t have many records that you are a good payer.
•       Preserve good financial habits. Another important tip is not to commit more than 30% of your income to debt. As all your financial information is linked to your CPF, the credit bureaus are able to cross-reference the data and identify your income and the amounts of your debts. If you need help organizing your budget and starting to build good financial habits, you can use a monthly spending spreadsheet for that.

 

Finally, it is important to remember that the score mainly considers the financial transactions that took place in the last 12 months. So, be patient in the beginning if it takes a while for any significant change to happen in your score.