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Tips To Ensure A Small Business Loan Doesn’t Wreck Your Credit

Let’s say you have been considering starting your boutique or bakery for quite a while now. You have gone ahead and saved up some money for your down payment. However, you do require a microloan to help fund your business project. You could be planning to stock or even manufacture a seasonal product. It could also be that you have to replace some of your business old equipment. All these business plans do require funding which you may currently not have.

Under such circumstance, taking out small business loans would be your best choice. You simply request for one from a licensed moneylender and are certain of repaying the instalments promptly. If you plan or have taken out a small business loan, ensure that you follow the below-given tips to help you keep your individual credit rating from crashing.

Think About The Effect Of Failing To Repay Your Loans

The guaranteed loans issued for SMEs do affect your personal credit rating. When things work out as planned, you are bound to see a positive effect on it. However, these business loans can disrupt your credit score, especially if you take out any additional debt, default on repayment or even fail to pay your instalments on time. In Singapore the banking institutions are will more probable to report your business loan to agencies compiling the credit histories than the licensed moneylenders. The records are not those restricted to your business financing.

When you hold business credit cards that have a personal guarantee, the credit card company issuing them will report any default and late payments. The late payment and non-payment get reflected in the annual accounts statements. If you are in the habit of making use of your personal credit card to extend cash advances or purchases for the start-up or new business, then you need to be cautious. This habit can have negative or positive effects on your personal credit rating depending on the manner in which you handle this credit line.

So How Do You Ensure That It Doesn’t Have An Effect On Your Credit Score

To ensure your small business loan does not affect your credit rating, you need to carefully look at how you have structured the small business status. You could also do what the other entrepreneurs have been doing and by all means possible avoid mixing business and personal accounts. Keeping your personal and business finances separate is a wise move. This is because your personal credit rating affects your whole life and it is a determining factor in a lot of other things such as owning property. You may consider making use of the following suggestions to help you reduce the negative effect a business loan may have on your personal credit score.

Make Your Business Its Own Legal Unit

In making your business an entity on its own, you will have completely separated your business from your personal finances. And this will also mean you won’t be liable for debt incurred by your business. But when you are the sole owner, it will be hard for you to keep your business and personal credit separated. As a sole proprietor, it means you have an unlimited liability, and it’s possible for you to get sued on a personal capacity for all your business debts.

Being a sole owner your potential creditors will most likely have to check both your personal and business credit history as well before lending you any money. Therefore, Instead of sole ownership, you may consider launching your company as a private limited business.

Get A Business Credit Card For Your Company

Take time to research on acquiring a business card that will not consistently give out your information to the credit reporting agencies. You can request for a business card (or even a personal credit card when you don’t qualify for a business card) and make sure you solely use it for all your business expenses.

When you use your personal card for some of your business expenditures, make sure you pay off the bills as well as cash withdrawals promptly. Failure to do so will only result in you getting a negative credit report. You can, however, protect your personal assets by taking out only small loans and paying them off on time at all times.

Think About Other Funding Alternatives

The good thing here is that times have changed and ways of funding a business have become more creative. Without relying on personal credit cards, offering assets as collateral for a business loan, or mortgaging property, you could tap into other funding sources. Do some research to find out whether you can use some of your investments, retirement savings plan, or the term deposits get a business loan. The good thing is that these loans possibly will not reflect on your credit report, therefore, will not ruin your general score.

The other funding source you want to consider include social lending and angel investors. Social lending you get a loan issued by a big number of people who have pooled their funds together. While angel investors are people who are interested in investing in small businesses as well as upcoming startups.

Most of these investors are former entrepreneurs thus they can offer very valuable business advice in addition to offering you funding. Even then ensure you have a solid business plan before approaching lenders for a loan.

Check With Authorized Moneylenders

When you decide on taking a business loan from a money lending company, make certain you know and understand the terms and conditions of the loan. Also read the loan contract carefully and ask for clarification when conditions are not clear to you. At the same time before you take the small business loan, ask the licensed moneylender what their policies on reporting business loans are. Be sure to work with a lender who does not report loans to credit score companies when they note the first signs of payment difficulties. Always take out loans from trustworthy moneylenders who don’t forward your information until all ways of loan payment recovery have been exhausted.

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    4 Serious Warning Signs Singaporeans Often Choose To Ignore When in Financial Trouble

    In the perfect world where financial difficulty is a thing of the past, you would have all your bills paid promptly and would never need to use loans since money would be there each time you require it. Living in an economic utopia is a reality for some individuals in Singapore, yet for most dealing with obligations and financial needs – loans, bills, family etc- and yet have time for fun is a tough balancing act.

    Every person in Singapore is concerned about money. In such economic tough times, getting into financial difficulties seems to be inevitable. Even then financial trouble does not just happen out of the blues. But by generally having bad financial practices and habits, it can be quite hard for an individual to see the red flag signs that you could be drifting into financial thin ice.

    Although most people would like to repay all their debt, make more money and also adopt healthy financial habits, it could be that they don’t know yet that they are headed for a financial snag. Below are some warning signs that show you could be in deep trouble, financially.

    You Are Dependent On Someone Else To Cope

    If you are having a good time enjoying your life, does not mean it is the same for other individuals in your life. Very many people among us are dependent on others to help them cope with their lifestyles. And this is not in reference to those people who are under the support of their parents, seeing that Singapore is one place in which family wealth remains in the family.

    But when you are constantly borrowing cash from your friends and ignoring their pleas for you to repay it, or you rely on your dates to fund your lifestyle, it may be a time you did some serious soul-searching. Because once people have wised up and begin to stay away from you, it will be a rude awakening for you and picking up the pieces by yourself after everyone has left won’t be a walk in the park.

    You also need to look at a way that you can be able to handle your bill with minimal assistance from anyone. You may consider taking a second job to supplement your pay if need be.

    You Frequently Make Use Of Personal Loans And Payday Loans

    Payday loans and personal loans have their uses and time when they are needed. However, when you find yourself constantly taking out these loan types way too often, it can only mean your financial situation seems grim. Personal loans are among the most expensive methods of borrowing money, they are also an indication that your salary is too low to cover all your monthly expenses.

    You can overlook having taken any of these loans once or twice for an emergency and a one-time expense, but when your moneylender starts greeting you like you were an old friend each time you appear, it may be the time you took some drastic measures and did an analysis on your financial standing. You need to look at option that will help you turn around your finances. And this you can do by knowing what your financial status is like and areas that need some of your attention.

    You Hold A Revolving Outstanding Credit On Your Cards

    Wise spenders do not use their credit cards for the reason that they don’t have the money to pay up. They make use credit cards for purchases of things they know they are able to afford but only do so for them to build up their credit score and acquire rebates, air points, and rewards. This simply means that having a revolving credit balance on a credit card, regardless of how small, may not be smart.

    You need to be paying off all your credit card expenses in full for every month. When you are holding a revolving balance on your card make a point to repay it immediately. You need to consider the high interests it attracts, and the high possibility of the debt accumulating that it will be hard for you to manage. This will affect your credit rating as well as get into to the endless pit of debt. When you are not able to pay it off, your debt will simply spiral out of your control.

    You Are Failing To Pay Your Loans

    When you already have an existing loan for a home loan or even a car loan yet you are finding it difficult to pay your monthly instalments, then you clearly are in a serious financial emergency. In such a situation you risk losing your property and even being declared bankrupt. If you have found yourself having to take out a loan amount to help you pay off a personal loan you owe, it may be the right time to consider very carefully on whether it would be the right move for you to sell your property or car, and more so if you still a lot of years left to pay on your home loan.

    Failing to pay on your personal loans or even your credit card bills is very serious. These are some of the issues that get people to end up being bankrupt. Since you have diligently avoided picking the call from your money lender is not a guarantee that you have successfully escaped the debt collectors. This is because the next thing you will realize is someone knocking on the door on the authority of the law.


    Having bad financial practices and habits can make it quite hard for an individual to see the red flags to show that you could be drifting into a financial snag. Many people are dependent on others to help them cope with their lifestyles. This is a major red flag because you aren’t able to handle any of your bills.

    Constant taking out of loan can only mean your financial situation seems grim. And holding revolving credit balance on a credit card, regardless of how small, does not make the situation any better. It is important that you take time to evaluate your finances to help you come up with a working solution.

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      Credit Card Suspended? Here’s Where To Find Money

      The Singaporean Monetary Authority (MAS) brought changes to the regulation of unsecured loans. The changes species the amount of money an individual can now borrow. This new uncollateralized loan limit put in place by the Singaporean Monetary Authority does not favour many individuals.

      No one likes living on credit but at times life situations may require you to come up with some urgent cash. Therefore, you end up needing financial assistance for several months. Your credit line or credit card may have been frozen owing to the newly set limit on unsecured loans. Here is where you can access urgent cash in Singapore.

      The New Limit Of Unsecured Debt 

      As of June 1st, 2017, the Singaporean Monetary Authority has put in place a new limit. This limit defines how much of the unpaid debt you can have as an unsecured loan facility. This set limit applies to every one of the financial institutions (FIs) found in Singapore. The new limit will be imposed on you should your interest earning unsecured loan be more than 18 times your earning for each month. This is when the unsecured loan remains so for 3 following months.

      When this occurs, you stand to lose any right to use credit facilities offered by financial institutions. Some institutions may also disallow you from acquiring new credit cards and credit card unsecured facilities. And also getting increases on the existing charge cards issued by them.

      What An Interest-bearing Unsecured Debt Is

      Interest-bearing unsecured credit is the amount of debt that attracts interest on the balance due. This amount is also not backed using any type of collateral for instance property.

      • What It Includes
        The unsecured interest-bearing debt is one charged on credit lines, credit cards, overdrafts and personal loan issued by the various financial institutions found in Singapore.
      • What It Excludes
        The interest earning debt excludes credit on the unsecured loans extended to you on a needs-basis and purpose. Such unsecured loans include medical, education and business loans.
      • The Financial Institutions (FIs) Involved
        The financial institutions involved include credit card issuer and banks found in Singapore.

      What Will Happen When You Exceed The New Set Limit

      When you go beyond the new set debt limit, you will no longer be able to perform the following transactions:

      • You will not be able to apply for a new credit card.
      • You will not have access to any new unsecured loan facility such as personal loan and credit line.
      • You will not be able to apply for limit increases on your existing credit card.
      • You will be able to apply for an increase in the already existing unsecured loan facility.
      • You will be disallowed from making charges onto the on-hand credit card.
      • You will also not be able to use your on-hand credit card to pay for recurring charges such as your utility bill.
      • It will also not be possible for you to make cash withdrawals and issue cheques using your unsecured line of credit.

      An Example To Help You Understand

      For example, assuming your monthly income is S$3,000. We will also presuppose that this is the same figure the financial institutions have on your income data. Therefore 18x your earnings each month comes to $54,000. (That is to say, each month’s earning S$3,000 x 18). Assuming you hold three credit cards with HSBC, DBS, and Citibank. For the credit cards, you have an outstanding balance due of S$10,000 each. In addition, you hold two unsecured lines of credit with OCBD and UOB. And the credit lines you have a balance due of S$15,000 on each of the cards.

      The interest-bearing of unpaid loan debt for all the 5 banks comes to a total of S$60,000. This amount you owe already goes beyond the set limit of 18x your monthly earnings. Given that the S$60k is not paid for the months of January, February and in March. When April comes to an end, all the five banks will suspend both your credit card and line of credit. This for you will mean you will not be able to do the different transactions. These transactions are outlined under “What Will Happen If You Exceed the New Set Limit”.

      This will remain so until you are able to fulfil the below-listed conditions:

      • You can lower the interest-bearing debt that carries no collateral to an amount below 18 times your monthly earnings.
      • You present your most up to date wages document to the financial institution for a review of your credit.
      • The bank uplifts the suspension on your credit cards and line of credit based on the results they have obtained from the credit review.

      How My Total Interest-bearing Is Determined On The Unsecured Debt

      The Singaporean credit bureaus often gather and maintain all credit information. This information regarding a person’s credit is often presented to the bureau by its members. Members of credit bureaus include credit card issuers, banks, and other financial money lending companies in Singapore. The bureaus then calculate the sum of all your outstanding balance due. This is got from the reports issued by their members. The report often lists all the debt you owe across both the unsecured and secured credit facilities.

      The outstanding uncollateralized credit is further separated further into 2 parts. These 2 parts are non-interest bearing and interest-bearing debt. From this, the financial institutions only consider the interest-bearing unsecured credit. This will then help them establish your borrowing limit. You will then be able to access your credit report. And you can get it from DP Credit Bureau and the Singaporean Credit Bureau (CBS).

      Where You Can Get Money If Your Credit Card Is Suspended

      The Singaporean Monetary Authority set limits will end up suspending some individuals credit limits. Before you find yourself in such a predicament, you should talk to a licensed moneylender. A trusted and licensed moneylender will help you with a suitable loan before your debt escalates and snowball into a huge debt. The moneylenders will be able to offer you unsecured loan facility. The unsecured loan facility by a licensed moneylender attracts low-interest rates.

      Don’t let yourself be in debt when there are means and ways to assist you to avoid getting yourself in trouble with money issues.

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        Reality Check Of Over-Spending: The Main Reason Why Singaporeans Get Themselves Into Debt

        Gambling is a sure way to amass debts and stay in debt. You can even take out loans to support your gambling habit in Singapore. This may look strange, but it is true. The gambling options are endless. There is soccer betting, horse racing, dog racing; and then there are the casinos and their games. Everything keeps you hooked, making think that you can always win the next round. You need a lot of money if you are going to be a serious gambler. It is not advised that you get any type of loan, but a personal loan can assist you. You would still be in debt, but it is a much better option than taking a cash advance on your credit card.

        Despite the huge debts that gamblers in Singapore accrue, gambling still isn’t the number cause of debts in Singapore. It isn’t even number two. The major cause of debts for Singaporeans is simple: overspending.

        Businesses have fine-tuned the art of parting consumers with their money. Every day something new comes out, with a tagline that makes you think ‘I just have to have that!’ Apple does it all the time and is a prime example of this. You could buy an iPhone 7 and two weeks later the iPhone 7s will hit the markets, and you will still buy it. The features are practically the same; the main difference is the price. You won’t even know how much you are spending till you see your account balance.

        Well, it isn’t totally your fault that you can’t help yourself. It is your fault that you can’t exercise stronger control, but there you have it. Reasons, why many Singaporeans are in debt due to overspending, are:

        Your Surroundings

        The mall. The store. The supermarket. These environments are designed to tempt you to part with your money. You may go to the mall for a Father’s Day mug. You come out later with a hat (it was on sale!), two pairs of shoes, a bracelet, and some designer socks. You didn’t even buy what took you there in the first place.

        Supermarkets are super-sneaky with the way they get you to overspend. The concept behind placing dairy products deep inside the store illustrates this. Apparently, one in so many people goes to the supermarket every day for dairy. As they pass the many aisles that lead to the dairy section, they can’t help but be tempted by the items on display.

        This is just one-way stores get you to buy extra. They also use music. A scientific observation has it that, during Christmas, festive music is played to get shoppers into a festive shopping mood. This music is also meant to influence your purchase choices and the time you have left until Christmas. In the end, you have been skillfully manipulated to spend more than you planned to.

        Whenever you go shopping, make a list of what to buy. This will keep you track, within your budget, and no overspending.

        Your Company

        The company you keep also determines how you spend. It is normal to want to fit in with your friends or peers, but it is ridiculous to overspend just to please them. You may have friends that earn a higher income than you do, who maintain a certain lifestyle that is bound to put you in debt. Maybe you have friends who love going out but never pay for anything. This kind of company guarantees you going over-budget.

        There are two ways to solve this problem if you want to stick to a budget. You can change your friends, or you can explain to them that you can’t spend as much money with them. If they value your friendship, they will respect your wishes and change tactics, to your benefit.

        Your Credit Cards

        The burgeoning cashless society is a huge convenience to everyone. You don’t have to carry cash around. You just need a credit card and you have access to all your money, and then some. Not having cold cash means you can actually save more and spend less. Right? Wrong!

        Singaporeans spend even more when using their credit cards. Even research has proven this to be true. There is a higher chance of you paying for an item or service with your credit card than you buying the same item with cash.

        Falling into credit card debt is so easy when you overspend, and getting out of it needs a lot of time discipline. If you are the type who uses up your credit availability and struggles to pay back, stop using your credit cards. Stick to cash. Knowing that you need cash to make purchases should still your spending hand a bit.

        Now That You Know That Your Debts Are Largely Due To Overspending, How Do You Quit The Debt Habit?

        Falling in Debt –How to Quit

        First, and most importantly, you need to budget wisely. If you are the type who prioritizes spending as opposed to saving, you are in trouble. When you get your salary, make a budget that includes savings and expenditure. Save something before you spend. That expenditure needs to be in detail and budgeted to the last cent. Whatever is left after the spending, add it to your savings.

        While you are still young, you need to be thinking about retirement. Overspending now will rob you of a peaceful retirement in the future. Start accounting for savings and spending even before you get paid, and remain firm in the financial boundaries you have set for yourself.

        Once you have settled that, you should create a debt repayment strategy. You have to clear your accrued debt before your savings can look respectable. Basically, a good repayment strategy requires you to pay back as much as possible in the shortest possible time.

        Therefore, you can set the amounts you want to repay, with time intervals. Like the minimum every week. Before you know it, you will be out of debt. Plus, overspending will be gone.

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          Loan Application Rejected? Here Are Ways To Get Your Act Together

          There are many reasons why you would want to apply for a loan. Face it: you live in Singapore. You need money to do a host of things. You need to make payments for your pet’s registration, after which you will have to budget its monthly feeding and grooming. You need to schedule trips to Disneyland in the US with your best friend (whom you plan to propose to at the place in question). The latest smart house on the market is a must have. Your tuition fees are coming up, and there are books you need to buy. And there is only so much that your monthly or annual income can take care of. Well, time to get a loan.

          You go to the bank and fill out an application form. The bank gets back to you, saying that you are not eligible for a loan. What, why? How?

          Banks and other lending institutions look at your work history, annual/monthly income, credit score, and TDSR –Total Debt Servicing Ratio– before approving your loan application. When your application is rejected, quickly check to see which of these is the culprit. Most likely, it is your credit score.

          The Credit Bureau Singapore (CBS) is the place to go to get your credit report, which will tell you just how much trouble you are in. CBS doesn’t just provide your report to banks and other lending organizations: it also keeps a blacklist. Defaulting on loans or getting debt management, or undergoing bankruptcy proceedings, will get you on that list. No bank is letting you get near them if you get on the CBS blacklist.

          What do you do now? There is still hope for you. If you can’t get a loan due to intermittent employment or a bad credit score, you can redeem yourself by doing a couple of things. Read on to learn how you can get your act together to qualify for a loan.

          1. Get A Job

          Not just any kind of job: a secure job. Stable employment is what you are after here. Also, you should have held this job down for at least a year before the banks will take a second look at your loan application. In general, banks prefer to offer loans to Singaporeans with high annual incomes. Self-employed applicants go through a rigorous process before their applications are approved. Even at that, you have to be earning a certain amount annually.

          Without steady employment, even loan sharks will baulk at lending you money.

          And don’t think that you will hustle a side job and stay there long enough to get the loan and call it quits. That will not work. Things might even make things worse for you and your report.

          2. Settle All Pending Payments

          Late repayments on loans or credit card bills affect your credit score. Neglecting to clear all the balances due also affects your credit score. Refusing to pay up to the monthly minimum amount on your loans also affects your credit score. These are the major things that give you a low rating on your credit report. It doesn’t matter what all else you do: ignoring your loan repayments guarantees are poor credit score.

          Before you apply for that car loan, make sure that you clear all existing loans and bills first. No matter how long it takes, do it. Settling your debts gives you a better credit report and a healthier TDSR standing: banks like it when they see that less than half your salary goes to paying credit card bills.

          Every debt you owe must be repaid, including that library fine for late returns of those books you borrowed.

          3. Go And Borrow Some Money – Then Pay It Back With Haste

          This is a smart way to continue boosting that credit score after you have cleared all your debts. Get a very small loan –make it a personal loan or a payday loan- and promptly pay it back. This will give your credit score a healthier sheen, and impress the banks.

          Do note that this loan has to be a small one, payable in the next month or at least three months. A payday loan is perfect: repay it on your next payday. Over and done with. If you take a loan big enough to make down payment on a house in Brooks Signature, then you must be sure of what you are doing.

          4. Use Your Credit Card

          Though a slower way of improving your credit, it is worth a shot. Use your credit card, or cards, to buy stuff and even pay your utilities. The goal here is to make tiny expenditures, like paying for groceries. Using up a large portion of credit negatively impacts your credit score, so maintain a large proportion while spending just a little.

          5. No New Credit Card Activity

          This means that you should neither cancel credit cards nor apply for new ones. While it is advisable to cancel credit cards that you aren’t using, now is not the time. Your credit score is affected by either action, so hold off on them for now.

          6. Exercise Patience

          Doing all of the things listed above will help you to clear your negative credit report. However, it is still going to take a while. A long while. Like 5 years long, based on what got you on the blacklist in the first place. The least could be two to three years because CBS needs at least 12 months of good behaviour (on your part) to believe that your score has changed for the better. Anything can happen in those two, three, five years. Singapore could be a dystopian, futuristic society by then. At least you have more time to make yourself more loan-friendly.

          For these life hacks to work, you need discipline. You can start practising on curbing and budgeting your expenditure. Keep a savings account. Set up an emergency fund. And live far below your means. A good credit score will get you that loan: a vacation in the Maldives will not.

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            How Long Does It Take Before Your Credit Score Looks Good Again?

            Singapore has a high standard of living. It is not unusual for you to go to some financial institution to get a loan. You may need a loan for several reasons, such as taking a vacation, buying a house or car, or paying for tuition.

            For you to get that loan, from banks or moneylending companies, your credit score has to be sound. Some people don’t pay attention to their credit score till they apply for a loan. Knowing your credit score is important, just as maintaining a good credit score is important.

            Then you get your credit report and your score looks horrible. This is because all your repayments are late, and you never pay off your due balances in full. You need to get a loan, but your credit score says ‘that’s impossible’. You are at your wits’ end, fretting over how you can make your credit score look decent once more. If this is you, read on.

            Credit Score – What Is It?

            A credit score is a group of numbers, or just a number, that financial institutions such as banks use to prove that you can repay a loan, or you are most likely to default on loan repayments. For instance, the Credit Bureau Singapore (CBS) uses four-digit numbers to grade, or score, your loan history. This score, called the CBS Credit Score, goes from 1000 to 2000. If your credit report has a score of 1000, it shows that there is a high probability that you will be late on your loan repayments, or even avoid paying them. If your score 2000, it is certain that you will repay your loan, and on time too.

            You should note that CBS does not make the decision for banks to give you a loan or note. They just provide your credit information upon request. Note too that other factors affect your eligibility for a loan, such as your income, number of credit facilities you have used, length of unemployment or employment, and so on.

            Credit Score – How does it Affect Me?

            Your credit score has an enormous effect on your ability to obtain a loan. If you are aiming to get a new car or buy a piece of property, you will have to apply for a loan. This would be a car loan or a mortgage. Once the banks see your poor credit report, none of them will approve your loan request. There go the house and that sweet car.

            A poor credit report doesn’t affect just car loans and mortgage. Any type of loan, such as a payday loan, and educational loan, or a loan for a new credit card, will be denied you with that bad credit score.

            How Do You Fix A Bad Credit Score?

            If your credit score is bad (which is why you are reading this), do not lose hope. You can redeem your bad credit score, although this may take you some months to accomplish. For instance, Credit Bureau Singapore will consider your credit score clean and healthy once they can provide evidence that you have repaid loans and balances on time for 12 months.

            Therefore, you can wipe out your terrible credit past by changing your repayment attitude. In the past, you were repaying very late, not completing balances due, and constantly paying below the minimum amount. Now, you are making all monthly repayments on your loans and credit cards on time, always paying above the minimum amount. Do this for 12 months, and you will effectively clear your poor credit history.

            There are other things that you can do to keep your credit score in good light, such as:

            Reducing the number of credit cards you apply for. Credit cards can lull you into spending too much: try to use cash more often.

            Stop all activity on credit cards you aren’t using.

            Always make your payments on time. Relating to credit cards, your credit card bills need to be paid on time and in full. Even if you can’t make the minimum payments, the time you pay back every month should stay the same.

            Applying for numerous loans in very brief intervals is a no-no. Avoid this at all costs.

            Credit Score – The Unfixable

            Unfortunately, there are issues on your credit report that can’t be fixed. These problems go past the stage of late loan repayment and advance into the areas of bankruptcy and payment defaults. Irrespective of how healthy your credit report looks, once you have entered those stages, they will always appear on your report. Regardless of how much time has passed since then.

            While your redeemed repayments and what-not are reflected in a section called ‘Account Status History’, the issues of bankruptcy and defaulted payments are shown in a section titled ‘Summary’, which is at the top of the report. Specifics of the current state of those problems, such if they are in progress or discharged or outstanding, can be seen as you go on reading the report.

            What Else Do Banks Don’t Want To See?

            When you pay off your loans or bills, there are certain codes that you get. You can visit the website of the Credit Bureau to get more, in-depth knowledge of what the codes mean. The codes are denoted by letters, each with a different meaning.

            However, some of those codes can damage your credit score. These include:

            • H –This shows that your account had to be closed (involuntary closure), and it was done so while there was an outstanding balance
            • R/S – either one of these codes means that your bank has closed your credit facility or your account. Also, it shows that there has been a restructured outstanding on that account
            • W – This code stays on your credit report for life. It shows that you have defaulted on your payments, and it is the most damaging code for your loan application.

            While it may take you at least 12 months to clean your credit history, there are problems like defaults that can still affect your credit score. Nevertheless, there are some moneylending companies that can give you a loan, once there is proof that you are good for it.






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              How To Get Out Of Credit Card Debt Quickly

              Taking out loans in Singapore is not an odd occurrence. The standard of living in Singapore is high, and there seems to be a lot of payments to make on cars, houses, and pets, and all of these payments are mandatory because it is the law. There is also education to think about, paying for tuition and books, and accommodation, amongst others. It is no wonder that loans have to be taken out, and credit card debts seem to be escalating every year.

              Because of all these loans, personal debt has become an increasingly difficult problem for Singaporeans. While it may be necessary for you to take out personal loans on your credit card for car payments or for house payments, having an outstanding debt of S$30,000 on your credit card is something to worry about. The interest on the loans can increase with every default on your part, adding up to thousands of dollars (on interest alone), and paying off your credit card debt will just keep getting harder. Also, there is a big chance that, with outstanding credit card debts, you may not be able to take out another crucial loan when you need to. As such, you need to find ways to get out of debt and fast.


              Calculate Balances, Annual Fees And Interest Rates

              You have decided that it is time to pay off your credit card debt, and the time to do that is now. Before you create a strategy for paying back those loans, you need to carry out a little math to know where you stand. Calculate balances and check annual fees. Check the minimum that is due and finds out the exact amount of credit card interest rates are charged on the credit cards you own, especially if your accumulated balances are in the range of four to five figures.

              Pen these figures down, and you will know what your next step should be. If you have been paying annual fees on your credit card, you have found one way out of debt: ask the bank to stop your annual fees, and use the money you have saved on those fees to pay your outstanding debt.

              Plan Out Your Weekly And Monthly Budget In Advance

              Budgeting is imperative to get out of debt and into a healthy financial existence. It is necessary to plan out how much you spend every week and every month, and how much you are going to save. How do you plan out this savings and expenditure budget? Figure out the difference between what you need and what you want. Place your needs and wants side by side, and compare them to how much you can afford to spend. Your expenditure should never exceed your income because that would mean that you are in an unhealthy financial situation.

              When making your budget, ensure to budget for what you need, and make sure you save something at the end of every week, and at the end of every month. What you save at the end of the month is what you will use to repay the loan on your credit card.

              Debt Consolidation Loans Into One Single Loan

              If you have a big loan that you need to pay off, you can take out a debt consolidation loan to pay it off. Debt consolidation loans are cash loans that you can take to pay off credit card debts and other personal debt, and these loans are cheaper than traditional, personal loans. You can take a debt consolidation loan from the bank, or you can go to a licensed moneylender and get a cash loan from them.

              While getting loans from moneylenders is much quicker than, say, getting a loan from the bank, you need to understand that there are two types of loans you can take from money lenders: secured and unsecured loans.

              Secured loans require some form of collateral, such as a house or a car, before you can be given the loan: unsecured loans require a good credit score and loan repayment history before you can be given the loan. With a secured loan, you can get any amount you want; with an unsecured loan, the amount you can borrow depends on your salary. The interest rate on loans from moneylenders is a flat 4% rate, even if you are late on your payments; the 4% will be charged to the delayed payment.

              Moneylenders also charge certain fees to the loan, such as 10% of the principal loan amount, and S$60 charged to every payment you default on.

              Choose Repayment Strategy

              There are two repayment strategies you can choose from to settle your credit card debt: pay highest-interest cards first, or pay those cards with the lowest balance first.

              • When paying the highest-interest cards, arrange the cards from those with high interest to those with low-interest rates, and start paying them off in that order.
              • When paying off the debts on the cards with the lowest balance, you rank the cards from lowest balance to highest balance and pay off the cards with the lowest balance one at a time. While you are doing this, you are still paying the minimum balance on all of your cards.

              minimum balance on all of your cards

              Avoid Using Credit Cards

              While you are trying to repay your credit card debts, avoid making any financial transactions with your credit card. Using your credit cards will simply add to your debt: so, it would be advisable to use cash to make purchases and settle bills. Also, using cash is a good way to curb your expenses: you will only buy if you absolutely need to.


              Settling credit card debt in Singapore is something that a vast number of the population has to deal with because borrowing and taking out loans is necessary to be able to live comfortably in Singapore. However, when these debts skyrocket and become too much to handle, you seriously need to pay them off and fast. Make a budget, get a debt consolidation loan, avoid using credit cards… either of one of these will go a long way in helping you reduce your credit card debt in the long run.

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                Credit and Credit Card Rating

                The best way to Improve Your Credit Rating

                As a prospective and consumer borrower in Singapore, there is no dearth of options in regards to lenders and loans. However there’s one factor that could limit your loan options: rating or your credit score.

                Your credit score shows your capacity and history as a borrower. An excellent score means you might have the ability to cover debt and also the discipline to pay them on time. Excellent score also speaks well of your financial status. A good credit rating gives you better interest rates on your loans, mostly because your credit history suggests that you have no financial and investment risk for your lender.

                A poor credit rating can mean a lot of things. It may mean you have had a number of loan payments that are late and defaults, for instance. Poor rating leads to rates of interest that are equally awful, since the investment risk is being compensated by your lender by charging you higher interest rates. While there are credit and loan choices for individuals with not so impressive rating, it is perfect for you as a borrower to work in your rating so that you can get better interest rates.

                Credit report evaluation

                Every borrower that is interested should assess their credit reports prior to taking out a loan. This is to ensure that the reports provide accurate financial information. Your report could contain late payment updates, fraudulent applications, and discrepancies. You’ll be able to employ a credit repair service if your credit rating does not correctly represent your credit history.

                Your financial advice will be assessed by a credit repair service via your credit reports, and check for discrepancies. The repair supplier will forward your corrected information to the Credit Bureau of Singapore if there are inconsistencies. It’ll automatically update your credit rating, once the corrections were approved by the agency.

                Consider whether you really want credit repair before getting this service. Credit repair does not automatically mean your credit score is likely to be enhanced. Evaluate your reports for any discrepancies that are possible. Only in the event that you believe there’s a discrepancy then only you get credit repair service.

                Be cautious of credit

                Your rating is not completely dependent on your credit history and your financial capacity. Most of the time, your number of credit that is open can impact your credit score and credit capacity.

                Banks, lenders, and sometimes even credit bureaus typically evaluate how many available credit lines you have. This implies that the amount of bank cards and charge cards you’ve will be assessed. If you got many credit cards even if you have been paying your accounts on time, banks and lenders could deny your loan application as well. This might just slightly impact your credit rating, but nevertheless, it’s going to substantially affect your capacity to borrow or get credit and loans.

                The truth is, when trying to enhance your credit rating, you should avoid using credit cards at all cost. This goes for charges cards too, which are inherently worse than credit cards.

                But credit bureaus not only assess credit payments and your loan. All your debts and unpaid balances are taken into account when institutions and financing agencies compute your credit score. This includes other similar contracts along with mobile phone contracts.

                Develop your credit

                The most effective method to enhance your credit score is to construct it. This works both for those with no credit history and for individuals with credit ratings that are extremely bad.

                With a higher interest rate, although despite having a bad credit rating, you can probably still get financing. Proving that you’re capable of handling financial obligations is a good way to up your credit history. This is very important because payments that are late can negatively make an impact on your credit history.

                Inform your lender or your bank immediately in case you believe you will be late in making payments. Lenders and banks will probably be more than willing to renegotiate your loan terms. They would rather change your loan terms so that you can avoid default. Many borrowers believe lenders and banks favor defaults, especially with guaranteed loans. But cash would be preferred by lending institutions as an alternative to non-financial, non-liquid assets. Lending institutions are somewhat more inclined in the event that they are informed by you of your potential financial difficulty beforehand to renegotiate your loan terms.

                Take the time to make yourself appear financially stable. When in the procedure for fixing credit rating or establishing credit rating, do not apply for loans frequently. You’ll not desire a financial institution or lender to understand which you happen to be denied a loan 10 times in the past 12 months. This provides the impression that you are in grave need of money, making you appear financial unstable and also desperate. Check your credit rating at least one time each year to see developments, any changes and, hopefully.

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