At first glance, a credit report may seem like just one of many financial documents that come with paying bills. However, what many may not know is that a credit report is crucial and can heavily impact how finance companies view your ability to take out loans. It contains a list of all your credit transactions which includes payments and other details. They are produced by credit bureaus to their members when the credit history of someone is inquired. You can also obtain your own credit report from the credit bureaus. In general, the report comprises of information such as your personal profile and biodata, records of any credit scrutiny made, the trend of credit card debt repayment for the past year, records of bankruptcy as well as terminated or closed credit accounts, among other things. It is key that you review your credit report every now and then, especially if you are thinking of taking out a loan in the near future. If this is the first time you are hearing about credit reports or you want to find out more about its importance, read on to gain more insight and information.
Who Has Information about Your Credit History?
In Singapore, your credit reports are strictly confidential and is only accessible from two bureaus, the DP Credit Bureau Pte Ltd. and Credit Bureau (Singapore) PTE Ltd. This is because Singapore’s laws forbids any institution that is not approved by the Monetary Authority of Singapore (MAS) from collating and releasing people’s credit history information from financial institutions. Not only is your credit report protected but it is also not easily obtained by the public; only you and members in the credit bureau can access your report. Members in the credit bureau are allowed access to your report for the sole purpose of judging your creditworthiness. Even as they assess and analyze your report, they are supervised by the Code of Conduct to ensure that they abide by the privacy rules and regulations which protects all your personal information.
When it comes to the minute details in your credit report, they come from a myriad of sources. Mainly, they come from financial institutions like finance companies, credit card issuers, banks, and other companies who are members of the bureau. Besides obtaining information from their members, the bureau also procures information like bankruptcy data from public records. The chief purpose of the bureau is to issue and present your credit report to their members; this is so that members can judge the likelihood of you paying back borrowed credit. It is worthy to note that the bureau itself does not have the power to reject or give credit; it is based on members’ evaluation of the given data.
Importance of a Credit Report
A credit report is entirely transparent in stating all of your financial transactions but most importantly, it reflects your capability to settle credit. This is one of the main things that financing companies and licensed lenders scrutinize and evaluate when deciding if they should extend a loan to you as well as the amount to lend you. At the end of the day, their focus is on making a profit and a greater ability to pay back will entice more institutions to give you a loan. This is especially important if you are thinking about taking a loan for a house, car or other personal reasons. The likelihood of procuring a loan and having more financial institutions with varying interest rates to choose from will heavily depend on your credit report. One way to make sure that you have a good credit score is to pay your credit card bills on time. Anytime a late payment or nonpayment happens, it is automatically started on your report which will directly affect your score and give you less access to credit institutions.
As such, it is imperative that you keep yourself up to date and aware of your credit statement. We recommend checking it once every three to six months. This is so that you will know what is stated in your report and can get a better idea of your finances. Waiting until you need a loan to check your report might be detrimental if you find out that you have a low credit score and do not have much time to improve it. Besides gaining knowledge about your finances, you can also look out for wrong credit report entries. This can come in the form of a mistake in your report, or things that you do not ascertain to be true. If that’s the case, contact the credit bureau and provide a detailed complaint as well as evidence to back up your claim. After that, the bureau will do a thorough analysis by checking with the member who inputted the data and update your file to indicate that the particular transaction is being investigated. If it was really a mistake on their part, the details on your report will be changed and the updated version will be distributed to all members who have requested a copy of your report in the last three months.
How to Keep a High Credit Score
Now that you know the importance of checking your credit report regularly, the next step is learning how to maintain a high credit score. There are a total of four tips that will greatly help you. Firstly, be aware of all your current loans and payments; this means knowing when payment is due and paying the full amount on time. Late and incomplete payments will be reflected on your report and decrease your score. Secondly, reduce the amount of credits you have so that it won’t be a hassle to manage and they won’t accidentally slip your mind. You can do so by consulting your credit provider about obtaining a debt consolidation loan. Thirdly, if you have monthly instalments to pay, definitely pay them on time. Lastly, let your creditors know in advance if you predict that you might miss a repayment deadline. This is so that you can prevent a late payment entry from appearing on your credit report.
Keeping up with your finances is no easy feat and paying bills and loans can be confusing and troublesome at times. Despite so, it is important to track your finances and outstanding credit amounts so that you can avoid having a bad credit score. Checking your credit report regularly may seem like a hassle but it will definitely be better than not knowing about your financial report at all.