Due to a recent late payment and several outstanding loans, your credit record has become rather dented. To top it, you have drawn-out yourself. Yet you are speculative as to when your score will be healthy again.

Although your score is not currently as significant, there is something you can do to help get it back to health. It does take some effort and discipline on your end to boost up your credit score but push onwards to find success.

Below are some tips to help grow your credit score but first a look at the difference between credit rating and score.

Credit Rating vs. Credit Score

To help you understand the difference between credit score and rating.

Credit Rating
By analyzing your credit history. It is possible for moneylenders to determine your rating. A moneylender or bank loan officer can calculate this for you. From this, the loan officer will determine your creditworthy. To determine this, a loan officer has to look at several factors. These may include your repayment records and job stability. Onto these, other factors are also taken into account by the loan officer.

Credit Score
Your credit score is worked out from all the past credit histories. This includes your applications for personal loans in the past. This also shows the records of the past repayments. It also clearly shows if you diligently repaid the personal loans.

Credit Bureau
It is Singapore’s credit organization. This is an Association between Infocredit Holdings and Singaporean Banks. Singapore’s CBS collects all credit-related information among its members. Also, the Bureau uses a proprietary algorithm for its calculations. They monitor how borrowers utilize their lines of credits.

As mentioned above, your score is calculated using past credit records. This means, a borrower with a risk grade of BB or CC. It shows that they normally repaying their personal loans late. With DD grade or lower, it means you have payment defaults. So you have not paid off your loans.

Although improving your score may take time. There are some ways that can help you improve it. This process may take you 1 – 2 years to achieve this. Also in this time, a borrower may be preparing to get a big loan. Therefore this period will give you enough time to organize your finances.

Remember: A trustworthy moneylender will not allow you to get a loan that you cannot pay off.

How To Remedy Bad Credit Scores

Fortunately, you are able to get remedy your credit report. This is because reports held at the Bureau show your records on timely payments. This is usually for a period of over the past 12-months.

Meaning that you can ‘erase’ the bad credit record. This is often noticeable by late repayments. Other include not fulfilling the minimum repayment amount.

When you make it a priority to settle your monthly loan instalments and credit card on time. That is for a period of the next 12 months. It will help clean up that section of the credit report identified as the ‘Account Status History’. You will also be improving your score. Thus increasing your chances of getting approved for a loan.

More tips to build up your score are

  • Cancelling credit cards that you do not use;
  • Do not apply for multiple credit cards;
  • Do not apply for very many loans within short periods of time
  • Repay your credit card bills punctually and in full;

What You Cannot Remedy

When your credit record problems go beyond late repayments. It might involve situations such as defaulting, debt management programs and bankruptcy proceedings. All these will, at all times be indicated in the credit history. This is regardless of the years that have passed after you got financially fit.

This information is plainly stated as a statistic. It normally shows at the top right segment of your credit record. This is under ‘Summary’ segment. Details showing if the default is unpaid, or if debt management plans are on-going. Or if you have a bankruptcy discharge are indicated further down the credit report.

Details on the particular codes that have been given to you. That is when you meet payments for the credit bills are to be found at Singapore’s Bureau site. However, these here are some of the codes you should avoid having in your report:

“H” code
For any involuntary closure of your account with the unpaid balance.

“R” or the “S” codes
This is coded because the lender has closed off your account and credit facility. This also means that a restructuring or settlement of the existing balance has occurred.

“W” code
This is coded as Member default. This is, in essence, the worst code for a borrower to have on their record. This code will scar your score since it cannot get reset.

How Your Credit Score Affects You

This question is especially important when you are thinking of making a big purchase. This could be buying property or even a car. At the same time for you to do this, you need to get a car loan or mortgage. This could be a major let down.

More so if you end up passing up on that property you have been eyeing. The reason being your credit record looks bad. Therefore, no bank is willing to offer you a mortgage.

Another moment when your score is important is if you are considering taking out loans or credit. This could be requesting new credit cards that have good rebate deal. It can also be taking out a loan to renovate your new home. Or even when you are considering the education loan type for your child.

What Money Lenders See When You Apply For Loans or Credit

When you are curious to see the status of your credit report. Or you want to find out what your score. You can purchase it online from the Credit Bureau for only $6.42. It is advisable that you find out your credit score. Also, make sure that you confirm the details of the report. This will help with the accuracy of the info.