How to improve your credit score

Here, we look at: 

What is a credit score?

How to check your credit score in Singapore

Why your credit score is so important

Steps to improve your credit score 

Data is taken from your credit report to calculate a 4-digit credit risk score. This can range from 1,000 (the lowest end) to 2,000. 

As well as a credit score, Credit Bureau Singapore (CBS) will assign you a risk grade, from AA to HH. Every time CBS gets new data from your credit activity, your score will be refreshed.

Some of the factors that affect your credit score include:

You can get a copy of your credit report online or at a CBS office in person for a small fee. You can also request a copy at any SingPost branch. If you're overseas and can't access the CBS website, you may have to email them a copy of your ID. For more information on how to get a credit report, visit the Credit Bureau Singapore website.

Your credit score and grade will show whether you're a reliable borrower – that is, how likely you are to pay your debts and make those payments on time. 

A lower credit score can:

A higher credit score shows you're less likely to miss a loan payment. Conversely, the lower your score, the higher the likelihood of you defaulting on debt.

A low credit score can hold you back. That's why it's advantageous to start building your credit history early on. 

Taking a small amount of credit can help you borrow larger amounts in the future – as long as you manage it well. An arranged overdraft or credit building credit card with a low limit could be an option for you. Prove yourself to be a responsible borrower and you'll find it easier to qualify when you need credit. 

Lenders want to know they can rely on you to make regular repayments. A missed payment is likely to negatively impact your credit score. 

Your payment history in the last 12 months will be most important to lenders. If you've missed payments in the past, but have since become more reliable, your credit score might not be affected as much as you think.

Ideally, you want to have a low credit utilisation rate. This is how much of your available credit limit you're using. If your credit limit is SGD10,000, for example, try and keep your balance below SDG3,000 for a credit utilisation ratio of 30%.

Spending near, or over, your credit limit every month is going to give the impression you're struggling to manage your finances. 

Merging multiple debts together into one loan, such as the HSBC Debt Consolidation Plan, can improve the health of your credit score, provided you make your repayments in time. Enjoy promotional interest rates based on your personal credit profile, a complimentary HSBC Visa Platinum credit card, and the ease of a single repayment to manage your debt.  

Check your credit report to make sure there are no mistakes, and that any amounts showing as owed on your accounts are correct. Keeping an eye on your credit report can also help you spot suspicious activity, like someone using your identity to apply for credit. 

Inform the bureau of any mistakes and they can follow up your dispute. 

When you apply for joint credit with someone, such as an overdraft, joint loan or mortgage – your credit history will be linked to theirs. 

If you’re looking to improve your score, you may want to ask your partner, for example, to try to do the same, especially if they have a poor credit report.