As you consider to get a loan from your moneylender, you need to realize that your credit report will have a part to play in the approval process. Your credit report is the detailed record of all your past credit transactions, plus additions and payments.
Credit bureaus issue the reports to their members each time they make an inquiry about the credit record of some individual. Note that it is your right to ask for your own credit reports from the credit bureaus.
With this in mind, why the should you care about your credit report?
The information contained in a credit report include
- A history of all credit scrutiny done on a borrower
- A borrower’s biodata/personal profile – contact addresses and telephone numbers are left out
- History of bankruptcy and it will appear for 5 years after the date of discharge
- The trend of repaying credit card debt for a span of 12 months
- Records of closed/terminated credit accounts and this appear for three years from the closure or termination date
- Default records and they will appear for 7 years starting from the day they were added into the credit report held at the bureau
- Credit limit aggregates
- Existing debt balance aggregates
Why a credit report is needed
The credit report gives you and moneylenders an impression of your ability to make credit settlement. This info will enable moneylender companies, as well as other credit organizations, make profitable decisions on how much and whether or not to offer a loan to a borrower. The report is important in assessing your home loans/mortgages, credit card issues, car and personal loan etc.
For borrowers, maintaining a good credit repayment record will help them as they seek loans. It is important that you keep your credit score as high as possible. Non-payments and late payments are recorded in your card reports and these will impact your score negatively. In addition, any future access to credit facilities will also be affected negatively.
Therefore, you need to get in touch with the credit bureaus and request to be receiving a transcript of all your credit statements either on a bi-annual or quarterly basis. Also, you need to be aware of the information it contains and find out that it really represents your current financial situation.
How to contest wrong report entries
When you observe an error in the credit report or some piece of information that you do not agree with is added to your report. What can you do to have an error corrected? It is best that you write to the credit bureau detailing your contest, with evidence to support your claim. After this, the bureau will then do the following:
- Enquire from their member who provided the data came
- Update the report and file to the credit bureau to show that the transaction posted is being investigated or in dispute
- Advice you on the development and result of your inquiry
- When the result is amended in your credit report, then the credit bureau is obligated to send your revised report copy to all of their members who have made any inquiries about you in the past 3 months.
Who keeps the information about your credit history
Based on the law requirement, only credit bureaus that have been authorized and gazetted by Singapore’s Monetary Authority of Singapore ( MAS ) are allowed to collect individuals’ history info from the different financial institutions. At present, Singapore has only 2 bureaus that enjoy these powers: Credit Bureau PTE Ltd and DP Bureau PTE Ltd.
The information included in your credit report typically comes from the different financial establishments that are members of the bureau. Members of the credit bureau include credit card issuers, finance companies, utility service providers, banks, among others.
In addition, they will all gather information from the public records, for instance, bankruptcy information.
In essence, the credit bureau acts as a depository for all credit information of all borrowers. This helps their members be able to evaluate the risk involved in offering loans to borrowers. This way they are able to make wiser decisions.
Thus the credit bureau in itself does not decline or offer credit rather their members use data the bureau provides to assess a borrower and then their members decide to decline or accept your application.
Who can access your credit report
The only persons who are allowed to access your report are only members of the bureau and the individuals themselves.
Why do bureau members need your report? The former are only given access in order that they can evaluate a borrower’s creditworthiness. The member access is even overseen by a set Code of Conduct, which follows strict privacy regulations and guidelines that govern the bureau members.
Ways to help keep a high score
Write down all the financial obligations you have together with the minimum repayment amounts for each and their due dates. Make sure you make those payments before their due date and in full. Paying less than the set minimum amount can also impact the report negatively.
Limit your credit sources so that they are easy to manage. When you hold several personal loans or card debts, talk to your moneylender offering the lowest interests about taking debt consolidation loan which will offer you fewer payments you can keep track of.
Pay the monthly existing loans and financial obligations punctually and in full, or the much that you can, to help decrease the existing balances to credit limit ratio. The higher the available credit is, the better the chances of obtaining loans at favorable rates.
When you foresee that you will not be able to repay on time, be sure to inform your creditors. Explain to why, and also enquire from them on what you can do so as to avoid a late payment entry to report
You need to realize that your report will impact the approval process for your personal loan. Therefore, after receiving your copy ensure to go through it to confirm the entries are correct.
When you notice an error, write to the bureau and offer evidence to your claim. Then wait they will update you on the progress and update your record/file if needed.