8 Reasons Why You Have Low Credit Score In Singapore (2023)

Looking to purchase a home, car, or paying for that dream wedding? High costs of living in Singapore can make that hard to achieve. In fact, taking on personal loans to make those dreams a reality is not uncommon. Before applying for a loan, you should look at a few key considerations banks and financial institutions observe, one of them being your credit score in Singapore.

What Is A Credit Score And How Does It Affect You?

While ‘credit score’ may be a financial jargon many would avoid discussing, it’s probably one that you should get familiar with.

Essentially, credit scores in Singapore are grades given to you based on different aspects of your financial history. Lenders use this score to determine your financial obligations. It can also affect how much loan you will receive, or if you will receive a loan at all.

Read more about how you can improve your credit score at the Credit Bureau Singapore (CBS) here.

Below are some points that may influence your credit scores. In general, credit bureaus do not reveal the exact algorithms they use for the calculation. Thus, the following table is based on the FICO credit score system, which may be subject to differences with the Singapore system.

Payment History35%
Amounts Owed30%
Length of Credit History15%
Types of Credit10%
New Credit10%

A bad credit score may result in banks rejecting your loan application. But, there are licensed moneylenders you can reach out to in times of need.

When it comes to assessing your loan application, licensed moneylenders evaluate based on your income, credit history, and outstanding loans, and not so much on your credit score.

But, what could be the reason for your low credit score in Singapore—are you doing something wrong?

(Video) How To Fix A BAD Credit Score ASAP

Here Are 8 Reasons That Could Have Caused A Dip In Your Credit Score

8 Reasons Why You Have Low Credit Score In Singapore (1)

1. You’re Consistently Late On Your Payments

As a credit cardholder, you may think that there are no qualms by making a late payment.

However, did you know that a late payment will reflect in your credit report and last for at least 7 years? Hence, it is important to make payment punctually.

Credit cards and lines of credit require a minimum repayment of about S$50 or 5% of the owed amount before the end of the billing cycle, while other loans may have fixed repayments.

Frequently delaying payment of more than 30 days can decrease your credit score in Singapore.

To ensure that you pay your bills on time, you can create a checklist of the payment dates and set them as a reminder on your phone. This way, you can avoid incurring additional fees from late payment and interest.

2. You Have Multiple Credit Card Applications

8 Reasons Why You Have Low Credit Score In Singapore (2)

Credit cards are a convenient and seamless way to make payments. Different cards offer different attractive rewards. As Singapore moves to a cashless society by 2025, that does not mean you should be applying for too many credit cards in one go!

If you think having multiple credit cards will let you get away with spending more, you’re in for a big surprise.

Applying for multiple credit cards in a short span of time can signify that you’re having some financial difficulty. It also shows to the lenders that you’re trying to take on more debt and thus, increases your credit exposure.

(Video) 3 Ways to Get a Loan with BAD CREDIT

If you have been rejected for a credit card application, consider waiting a month before reapplying, and take the time to reevaluate if you really need that credit card.

3. You Have Been Defaulting On Loans

Now that you know all it takes is one late payment to affect your credit score in Singapore, defaulting on your payments will only make it worse.

In a nutshell, loan default happens when you have failed to pay your loans over weeks or months. When this happens, the lender will write off your debt.

But fortunately, lenders usually have a grace period before penalising you. In this grace period, also known as the delinquency period, it is best to make up for your missed payments or contact your lender to have your debt restructured. Although this will still affect your credit score in Singapore, it is better than defaulting on a loan.

Defaulting your loan payments will affect your credit report indefinitely and may result in you not being able to take any loans in the future.

Thinking of restructuring your debt? Find out how you can do so with a personal loan.

4. You Have Been Applying For Several Loans One After Another

Did you know that about 10% of your credit score comes from your number of loan applications?

Applying for several loans one after another can reflect that you’re in a bad financial situation and are desperate for credit.

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Thus, applying for too many loan applications in a short span of time can hurt your credit score in Singapore.

5. You Have Multiple Credit Accounts Open

Having multiple credit cards can harm your credit score if what you owe exceeds 30% of your credit limit.

Your credit score in Singapore will still be affected even if you do not have much debt, because the number of open credit accounts reflects that you may be over-extending yourself.

You may also happen to lose track of payments and in turn, incur outstanding debt that can affect your score.

If you do have multiple credit cards on hand right now, do not rush to close all these accounts at one go as that can affect your credit score too!

Instead, remove cards that overlap in rewards and keep those that give you the best rewards according to your needs and consolidate your spending on it.

6. You Lack A Credit History

Some prefer not to have any credit cards for fear of incurring too much debt on borrowed money.

But in actuality, it’s advisable to have and use at least 1 credit card. A lack of credit history can make it tough for the bank or financial institution to determine your creditworthiness. If they are unable to assess your financial reliability, you may be seen as a potential risk.

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Have at least 1 credit card and make sure to make prompt payments in full, so that you will not be deemed as a potential risk to banks and financial institutions. By making payments on time, you will also prove to be a reliable applicant and maintain a good credit rating!

7. Your Credit Card Limit Is Constantly Maxed Out

Some credit cards have a credit limit, but you should probably try to avoid using more than 30% of your available limit to prevent it from affecting your credit score.

Maxing out your credit card means that you have used 100% of the available credit for the card. This accounts for one-third of your credit score, thus maxing out your credit card may not be a good idea.

Maxing out your card to take advantage of the rewards does not mean that you’re irresponsible though. You just have to take note to pay the balance off before the statement closes, so that it will not be reflected on your credit report.

8. You’re Facing Bankruptcy Or An Impending Litigation

This is possibly the most common reason for a low credit score in Singapore.

Declaring bankruptcy will leave a permanent mark on your credit report for as long as 10 years. And this can affect all future credit decisions made by banks and financial institutions.

Learn more about what will happen if you file for bankruptcy here.

It is, however, not a lost cause. Subsequently paying full debts on time and taking minimal credit can help to improve your credit rating!

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Ready to apply for a personal loan? Apply now with Crawfort.


What are some reasons for a lower credit score? ›

Credit scores can drop due to a variety of reasons, including late or missed payments, changes to your credit utilization rate, a change in your credit mix, closing older accounts (which may shorten your length of credit history overall), or applying for new credit accounts.

What 3 things can cause a low credit score? ›

Common causes of a bad credit rating include failing to stick to your credit agreement, paying the bare minimum on your credit card each month, and falling victim to identity theft.

Does Singapore have a credit score? ›

Interestingly, the Monetary Authority of Singapore (MAS) has authorised only two credit bureaus to issue credit reports and credit scores. These are the Credit Bureau of Singapore, and DP Credit Bureau. If your score is nearer to 2000, you're in the pink of financial health, with a low risk of default.

What are the 5 factors that affect your credit score? ›

The 5 factors that impact your credit score
  • Payment history.
  • Amounts owed.
  • Length of credit history.
  • New credit.
  • Credit mix.
Dec 30, 2022

What are 2 disadvantages of a poor credit score? ›

These are the biggest disadvantages of having a bad credit score
  • You're too big of a risk for mainstream lenders. ...
  • You pay more for your loan. ...
  • Your insurance premiums may go up. ...
  • You may miss out on career opportunities. ...
  • You'll have a harder time renting an apartment.

Why is my credit score low if I have no credit? ›

With no credit history, there is nothing that can be used to calculate a credit score. Your credit reports record your history of borrowing money and repaying debts, and a credit score is calculated using data recorded in one of your credit reports.

What are 5 things not in your credit score? ›

Race, religion, national origin, sex, and marital status

The Consumer Credit Protection Act prohibits the use of this information by lenders, as well as the receipt of any public assistance, or the exercise of any of your consumer rights.

What are 3 things not good about credit? ›

Three common credit problems are: Lack of enough credit history. Denied credit application. Fraud and identity theft.

What are 4 ways you can hurt your credit score? ›

Even one missed payment, carrying high balances or co-signing a loan are some of the things that can hurt your credit. Erin El Issa writes data-driven studies about personal finance, credit cards, travel, investing, banking and student loans.

Do foreigners have credit scores in Singapore? ›

Any legal resident of Singapore, including foreigners, can apply for a copy of their credit report. Apart from individuals, banks and financial institutions can obtain your credit report for credit assessment purposes.

How to get credit score in Singapore? ›

Credit Bureau Singapore. You can request a copy of your credit file online, at any of the SingPost branches or at the Credit Bureau office. Prices reflected below are accurate and current: A Credit Report is chargeable at $8.00 with prevailing GST.

What is the highest credit score in Singapore? ›

The score range from 1000 to 2000, where individuals scoring 1000 have the highest likelihood of defaulting on a payment, whereas those scoring 2000 have the lowest chance of reaching a delinquency status. Together with the score, the risk grade and risk grade description are provided.

What are the 3 biggest factors impacting your credit score? ›

The primary factors that affect your credit score include payment history, the amount of debt you owe, how long you've been using credit, new or recent credit, and types of credit used.

What are the 6 credit factors? ›

While the exact criteria used by each scoring model varies, here are the most common factors that affect your credit scores.
  • Payment history. ...
  • Amounts owed. ...
  • Credit history length. ...
  • Credit mix. ...
  • New credit.
May 31, 2017

What are 3 things a credit score ignores and why? ›

Your race, color, religion, national origin, sex and marital status. US law prohibits credit scoring from considering these facts, as well as any receipt of public assistance, or the exercise of any consumer right under the Consumer Credit Protection Act. Your age.

What can damage a credit score most? ›

5 Things That May Hurt Your Credit Scores
  • Highlights:
  • Making a late payment.
  • Having a high debt to credit utilization ratio.
  • Applying for a lot of credit at once.
  • Closing a credit card account.
  • Stopping your credit-related activities for an extended period.

What are the 2 biggest impacts of your credit score? ›

Payment history has the biggest impact on your credit score, making up 35% of your FICO score. Credit utilization ratio comes in at a close second, accounting for 30% of your score. The higher your credit score, the more likely you are to qualify for credit – and receive better terms and interest rates.

Can you buy a house with no credit? ›

Although you can get a mortgage with no credit history, it's worth – if it's possible - trying to improve your credit score and overall credit profile. This is especially true if the reason you have no credit history and a low credit score is because you're a first-time buyer.

Can you live without a credit score? ›

Living without a credit score (or with a bad one) is possible, but it will present challenges from time to time even if you never borrow money.

Is my credit score 0 if I don't have one? ›

But your credit score won't start at zero, because there's no such thing as a zero credit score. The lowest score you can have is a 300, but if you make responsible financial decisions from the beginning, your starting credit score is more likely to be between 500 and 700.

What credit score is poor? ›

A credit score of 600 or below is generally considered to be a bad credit score. And if your credit is low, you may qualify for a loan but the terms and rates may not be favorable. Credit scores between 601 and 669 are considered fair credit scores.

Can you be poor with good credit? ›

That said, it's important to remember that your credit score isn't the be-all and end-all of your financial health. It's entirely possible to have a decent score and still struggle with debt—or at the very least, make decisions that aren't necessarily good for your money in the long run.

What are the three C's of credit? ›

Students classify those characteristics based on the three C's of credit (capacity, character, and collateral), assess the riskiness of lending to that individual based on these characteristics, and then decide whether or not to approve or deny the loan request.

What are 7 ways you can improve your credit score? ›

Here are some strategies to quickly improve your credit:
  • Pay credit card balances strategically.
  • Ask for higher credit limits.
  • Become an authorized user.
  • Pay bills on time.
  • Dispute credit report errors.
  • Deal with collections accounts.
  • Use a secured credit card.
  • Get credit for rent and utility payments.
Nov 1, 2022

Why is my credit score bad when I pay everything on time? ›

A short credit history gives less to base a judgment on about how you manage your credit, and can cause your credit score to be lower. A combination of these and other issues can add up to high credit risk and poor credit scores even when all of your payments have been on time.

What are six situations that can cause your credit score to decline? ›

6 Reasons Your Credit Score Went Down
  • Derogatory Remarks on Your Credit Reports. ...
  • Inaccurate Information on Your Credit Reports. ...
  • You Missed a Payment. ...
  • Your Credit Utilization Ratio Has Increased. ...
  • One of Your Credit Limits Decreased. ...
  • You Applied for Multiple Credit Products.
Aug 10, 2021

What countries have no credit score? ›

Japan. In Japan, there's no formal nationwide credit system. A person's creditworthiness is typically determined by each bank, based on its relationship with the consumer. Each financial institution will look at factors like salary, length of employment and current debts to determine their level of risk as a borrower.

Which country has the best credit score? ›

Germany, Australia, and Canada have consistently received the highest credit rating from Standard & Poor's.
Credit rating of countries with programs in 2021.
CountryCredit rating, forecast
SwitzerlandААА, stable
AustriaAA+, stable
UKAA, stable
SpainА, negative
6 more rows
May 13, 2021

Does your credit score follow you to other countries? ›

A credit score accrued in the United States has no bearing overseas; it will neither harm nor help you in overseas financial dealings. The technology doesn't yet exist for the possibility of international credit scores; additionally, laws prohibit the sharing of credit information overseas.

How does credit limit Work Singapore? ›

Per MAS regulations, your credit limit is determined by your income. For most credit card users in Singapore, the maximum credit limit is 4X your monthly income. But credit card providers may offer you less, depending on your credit history and circumstances.

Does debit card affect credit score Singapore? ›

Credit cards affect your credit score, debit cards don't

On the other hand, if you're not religious about paying your bills on time or you get stuck with a balance you have difficulty paying off, you'll do the opposite. Debit cards have no effect on your credit score.

What is Chinese credit score? ›

The social credit system is an extension of the risk assessment credit rating systems that were introduced in China in the 1980s. Proponents argue that it will help eliminate problems such as food safety issues, intellectual property theft, violation of labor law, financial infidelity and counterfeit goods.

Do most places in Singapore take credit cards? ›

The local currency is the Singapore Dollar, but there is a reciprocal arrangement with Brunei to accept their local currency. Major credit cards are accepted in most hotels, restaurants and department stores. Some shops and services no longer accept coins and notes.

Does credit card affect credit score Singapore? ›

Your credit score can be lowered if you have multiple lines of credit and credit cards. The number of your credit applications and banks' inquiries into your credit score– Every time you apply for a new loan or a credit card, the financial institution involved will inquire into your credit score with CBS.

What credit cards are accepted in Singapore? ›

Singapore: Supported payment methods
BanksSupported cards
CIMBMastercard Credit
Citibank Singapore LimitedMost Citi credit cards issued by Citibank Singapore
DBS BankAll consumer cards
HSBC Bank (Singapore) LimitedAll Visa and Mastercard consumer credit cards issued in Singapore
13 more rows

What are the 4 C's of credit? ›

Standards may differ from lender to lender, but there are four core components — the four C's — that lender will evaluate in determining whether they will make a loan: capacity, capital, collateral and credit.

What are the effects of poor credit? ›

A poor credit history can have wider-ranging consequences than you might think. Not only will a spotty credit report lead to higher interest rates and fewer loan options; it can also make it harder to find housing and acquire certain services. In some cases it can count against you in a job hunt.

What are 5 ways to improve your credit score? ›

  • Learn the legal steps you must take to improve your credit report.
  • Beware of credit-repair scams.
  • Get copies of your credit report —then make sure the information is correct.
  • Pay your bills on time.
  • Understand how your credit score is determined.

What are the 7 C's of credit? ›

The 7Cs credit appraisal model: character, capacity, collateral, contribution, control, condition and common sense has elements that comprehensively cover the entire areas that affect risk assessment and credit evaluation.

What bills affect your credit score? ›

Only those monthly payments that are reported to the three national credit bureaus (Equifax, Experian and TransUnion) can do that. Typically, your car, mortgage and credit card payments count toward your credit score, while bills that charge you for a service or utility typically don't.

Why did my credit score go down when nothing changed? ›

Why did your credit score go down when nothing changed? If you didn't change the amount you owe, perhaps your credit card company has increased or decreased your total credit limit. If your spending habits remain the same, a decrease in your credit limit would increase your credit utilization ratio and harm your score.

Why is my credit score going down if I pay everything on time? ›

Similarly, if you pay off a credit card debt and close the account entirely, your scores could drop. This is because your total available credit is lowered when you close a line of credit, which could result in a higher credit utilization ratio.

How can I avoid lowering my credit score? ›

Never pay late.

Lenders look for patterns of missed or late payments, and being even one day late on a payment could lower your credit score. The best policy is to pay on time and in full. At a minimum, pay at least the minimum due on or before the due date.

How do you fix Low credit? ›

7 ways to improve your credit score
  1. Check your credit reports for errors. ...
  2. Pay down any credit card debt you have. ...
  3. Get a credit card if you don't have one. ...
  4. Consider signing up for Experian Boost. ...
  5. Wait for negative items to fall off your credit reports. ...
  6. Apply for new credit sparingly. ...
  7. Pay your bills on time, every time.
Apr 18, 2022

Why did my credit score drop 100 points after paying off my car? ›

Paying off something like your car loan can actually cause your credit score to fall because it means having one less credit account in your name. Having a mix of credit makes up 10% of your FICO credit score because it's important to show that you can manage different types of debt.

What raises credit score? ›

Factors that contribute to a higher credit score include a history of on-time payments, low balances on your credit cards, a mix of different credit card and loan accounts, older credit accounts, and minimal inquiries for new credit.

Can your credit score drop 75 points for no reason? ›

Can a credit score drop for no reason? No, but it can feel that way. Scores are determined by formulas, and things like paying off a loan, having your credit limit reduced or closing an account can result in a lower score, as can a credit card balance that is higher than normal for you.

What is the fastest way to boost credit score? ›

4 tips to boost your credit score fast
  1. Pay down your revolving credit balances. If you have the funds to pay more than your minimum payment each month, you should do so. ...
  2. Increase your credit limit. ...
  3. Check your credit report for errors. ...
  4. Ask to have negative entries that are paid off removed from your credit report.

How fast can I add 100 points to my credit score? ›

In fact, some consumers may even see their credit scores rise as much as 100 points in 30 days. Learn more: Lower your credit utilization rate.

How can I raise my credit score 200 points in 30 days? ›

How to Raise your Credit Score by 200 Points in 30 Days?
  1. Be a Responsible Payer. ...
  2. Limit your Loan and Credit Card Applications. ...
  3. Lower your Credit Utilisation Rate. ...
  4. Raise Dispute for Inaccuracies in your Credit Report. ...
  5. Do not Close Old Accounts.
Aug 1, 2022

How can I raise my credit score 40 points fast? ›

Here are six ways to quickly raise your credit score by 40 points:
  1. Check for errors on your credit report. ...
  2. Remove a late payment. ...
  3. Reduce your credit card debt. ...
  4. Become an authorized user on someone else's account. ...
  5. Pay twice a month. ...
  6. Build credit with a credit card.
Oct 19, 2022

Why did my credit score drop with no missed payments? ›

This is because your credit history is shortened, and roughly 10% of your score is based on how old your accounts are. If you've paid off a loan in the past few months, you may just now be seeing your score go down. Your score could be negatively impacted by a closed credit card, too.

How long does it take for credit score to go up? ›

How long it takes to raise your score
EventAverage credit score recovery time
Missed/defaulted payment18 months
Late mortgage payment (30 to 90 days)9 months
Closing credit card account3 months
Maxed credit card account3 months
3 more rows
Apr 7, 2022

What is the average US credit score? ›

Credit scores are three-digit numbers that show an important piece of your financial history. Credit scores help lenders decide whether to grant you credit. The average credit score in the United States is 698, based on VantageScore® data from February 2021. It's a myth that you only have one credit score.

Can you recover from low credit score? ›

Rebuilding your credit doesn't happen overnight. It takes time to re-establish a good payment history, pay down the debts you may have and let negative information cycle off your credit report. It may help to know how long negative information appears on credit reports.

How do I get rid of bad credit history? ›

To help on your way to better credit, here are some strategies to get negative credit report information removed from your credit report.
  1. Submit a Dispute to the Credit Bureau.
  2. Dispute With the Business That Reported to the Credit Bureau.
  3. Send a Pay for Delete Offer to Your Creditor.
  4. Make a Goodwill Request for Deletion.
May 18, 2022


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