There’s nothing that really screams “welcome to the adult world” like receiving your credit report for the first time.
But the first thing that’ll hit you probably isn’t your credit score, it’s likely the moment that you realise you have no idea how the heck to read the credit report.
Unlike a report card in school which typically, and simply, grades your performance from A to F, you’d find that the credit report is a little more complex than that. There are scales and codes for various things, and it is now your job as the credit holder to understand what all that means.
Lucky for you, we’re here to take you through it, step by step.
A Beginner’s Guide To Understanding Your Credit Report In Singapore 2023
What is a credit report?
Where can I get my credit report?
How much does it cost to get my credit report?
What is a credit score? Specifically, what is a CBS credit score?
A step-by-step guide to reading a credit report
Is credit score important in Singapore?
How is my credit score determined? What causes a bad credit score?
Why do some banks reject while others approve the same applicant with the same credit score?
How can I improve my credit score in Singapore, and how long does it take?
Is there anything in my credit report that cannot be remedied?
1. What is a credit report?
Your credit report is a record of your credit payment history compiled from different credit providers. So, if you’re a good-two-shoes who always pays your bills on time, it’ll show. And if you’ve been naughty once or twice, paying late or defaulting on loans, it’ll also show.
Credit reports in Singapore are produced by Credit Bureau Singapore— Singapore’s most comprehensive consumer credit bureau that features full-industry uploads from all retail banks and major financial institutions.
While the credit report is a tool for you to check up on how you’re doing financially, it actually has a real impact for credit providers. Most lenders will check your credit file to assess your credit worthiness prior to deciding if you deserve receiving credit from them, e.g. a personal loan. Think of it as the sorting hat of the financial world.
2. Where can I get my credit report?
It’s actually really straightforward. You can request a copy of your credit file from any of the following places:
Note that the service is not available during these hours:
Month end: 12- 7am
Just regular maintenance things.
Any SingPost branch
There are 57 SingPost branches islandwide; find a branch near you.
Upon receiving the application form from the SingPost branch, CBS will process and send the credit report to you via the method(s) of delivery opted for within 1 business day from the date of receipt of the application form and all necessary supporting documents from SingPost.
Credit Bureau office
Address: 2 Shenton Way, #20-02, SGX Centre 1, Singapore 068804
Opening hours: Mon – Fri 9am – 6pm
Hotline: 6565 6363
Upon successful verification and completion of form, CBS will process your request and provide you with a copy of your credit report.
You can collect your report on the spot if you opt for hardcopy and/or softcopy. If you opt for registered mail, CBS will send out the credit report to your mailing address within the same day.
3. How much does it cost to get my credit report?
Getting a credit report will set you back S$8.00, with prevailing GST. Requests for multiple modes of delivery for your report comes with an additional fee of S$2.02.
Consumers who applied for the CBS Credit Report at any SingPost Branches can opt for an express service which is chargeable at S$19.44. The soft copy report will be sent to your provided email address within 2 hours from the time of application at the SingPost Branch.
CBS accepts cash, eNets, Visa and Mastercard for payments made at their office, and eNets, Visa and Mastercard for payments made online.
Alternatively, you could obtain a free credit report if you have recently applied for a new credit facility with any of CBS members. In the notification letter informing you of the credit application approval or rejection status, it should also indicate redemption channels to obtain your free credit report within 30 calendar days from the date of the letter.
4. What is a credit score? Specifically, what is a CBS credit score?
A CBS Credit Score is a four-digit number based on your past payment history on your loan accounts. It is calculated from an algorithm based on information in your current available credit data and is a fluid number which may change from time to time in tandem with changes in your credit information. This information is provided by and collated from various sources.
If your score is nearer to 2000, you’re in the pink of financial health, with a low risk of default.
If your credit score is closer to 1000, it means that you have a higher risk of defaulting on a payment.
Together with the score, the risk grade and risk grade description are provided.
5. A step-by-step guide to reading a credit report
Looking through the credit report can be confusing as it’s laden with jargon. Here are some key things to look out for in the report and how to interpret them:
a. Account Status History
Possibly the most technical section, the Account Status History shows the product types a consumer holds, whether singly or jointly. These product types refer to credit facilities such as (un)secured credit cards, personal loans, mortgage loans, car loans, etc. held with CBS member banks and financial institutions.
Within this section, you can see your payment patterns over the last 12 months, whether a cash advance was taken up and if full payment was made. Yep, you can’t hide anything here. The payment codes in the report explain how prompt the consumer is in paying the monthly instalments. Poor payment patterns and overdue balances can affect the consumer’s credit score.
b. Previous Enquiries
This section maintains records of a consumer’s credit facility application over the past 2 years.
An enquiry can be for a new credit facility application, CBS member banks’ review of the consumer’s credit facilities held with them or for a guarantor review.
When too many new applications are made within a short span of time, this can affect a consumer’s credit score as this is interpreted as credit hunger—an urgent need for funds. That said, it’s not possible to define exactly how many applications is considered too many and how short a period is too short. Calculating a credit score is a black box and many factors are at play.
The number of times a consumer retrieves their own credit report is also recorded here. However, this will not affect one’s score as it is encouraged for a consumer to retrieve their own credit report and better understand their credit standing.
c. Default Records
From the last 12 cycles of payment patterns under the Account Status History, readers of the credit report will be able to observe whether the consumer is facing financial distress. Typically, when a consumer struggles to make payments, the payment codes will begin to deteriorate and eventually lead to a default.
A default record section will then open to reflect details of the default which will be retained for 3 years. This section shows the types of products and to which CBS member bank it belongs to.
The status of the default will also be uploaded, showing the method of settlement between the consumer and the CBS member bank. It can be an outstanding default, or partial, full or negotiated settlement reached. For negotiated settlements, the amount written off by CBS member banks will be indicated.
When a bankruptcy record is present, the consumer will be given a non-scored grade: HX. A consumer with bankruptcy records will take years to rebuild the credit score and can expect to face face difficulties in loan approvals.
Bankruptcy records are retained in the credit report for 5 years from the date of discharge from bankruptcy.
6. Is credit score important in Singapore?
Yes! Your credit score will be used by banks to assess how likely you are to repay your debts. So if you are planning to borrow from a bank—like when you take out a home loan for a property purchase—you need to ensure that your credit score looks good.
The same goes for applying for an HDB loan. If you’re not a full-time employee with regular CPF contributions, HDB will want to take a look at your Credit Bureau Singapore credit report. They’ll need to assess how likely you will be able to service your loan before they issue you with the HDB loan eligibility letter (HLE).
Your credit score is also important if you are planning to take up any forms of credit or loans, be it applying for a new credit card, taking up a renovation loan for your new place, or applying for an education loan.
Some employers conduct pre-hire employment checks with CBS, especially those complying to MAS’ Fit and Proper Guidelines. Thus, your credit reputation might influence the hirer’s decision to employ you.
In Singapore, banks and financial institutions screen their employees diligently and your credit score is one of the many possible employment screening tests they can run prior to hiring you. The risk appetite of the employers depends on the role you are applying for.
Having said that, it does not mean that you can mismanage your credit after landing yourself a job in the Banking and Finance industry. This is because employers can still run annual screening on their existing employees to ensure they are financially sound. This is important especially in times of a recession.
7. How is my credit score determined? What causes a bad credit score?
CBS calculates your credit score by applying an algorithm to your current available credit data. Your credit score is by no means a static number. It may change from time to time to account for any new credit activity.
These are the key contributing factors that will affect your score negatively. Note that there is no fixed weightage to each factor and how much impact it has on the score.
Immature credit history: You do not have enough credit history to establish a good credit score
Credit exposure: The more you borrow, the higher your credit risk
Delinquency presence: Any criminal or delinquent activity will worsen your credit score
Not enough clean history: Lack of positive loan history (repaying in full and on time)
Adverse credit history: Presence of negative loan history (late or incomplete repayments)
Too many enquiries: The frequency and recency of your loan applications also play a part
To find out which factors apply in your case, you can refer to the key contributing factors section on your credit report to understand what has caused your credit score to drop.
8. Why do some banks reject while others approve the same applicant with the same credit score?
Your credit score is assessed every time you apply to borrow from any bank or financial institution that is a CBS member.
But different lenders consider different factors and have different risk appetites in assessing an individual’s credit worthiness. Therefore, there is no universal standard on acceptable credit score among the lenders.
In addition, each financial institution has its own internal credit score and risk profile for each applicant based on your financial and demographic information.
So, the CBS credit score is only one of multiple pieces of information used in the bank’s assessment process, and it is ultimately up to each bank’s risk appetite to approve or reject the application.
Also, it’s worth noting that CBS doesn’t “blacklist” nor play a part in the lending or hiring approval decision. It only provides specific factual credit-related information about consumers who have credit or loan facilities to the lenders.
9. How can I improve my credit score in Singapore, and how long does it take?
If you have over-extended yourself and your credit history has been dented by recent late repayments, you might be wondering when your credit score will look good again.
The good news is that it is within your ability to clean up your credit history! Here are 3 golden rules, folks.
Pay your bills on time, all the time
Keep at least one credit card active
Avoid applying for too many credit cards or loan facilities within a short period of time
If you do not have an active credit facility, you should apply for a credit card to start building your credit score. Make sure to make prompt payments and you’ll be on track to improving your credit score.
There is no fixed period during which your credit score will definitely improve — the score is calculated by a black box algorithm.
But it typically takes a few months of responsible prompt repayments to start seeing an improvement in your credit score.
If applying for new credit facilities has become challenging because of your deteriorated credit score, you might want to try out an unsecured credit card with a low credit limit or take up a secured credit card so that you can start rebuilding your credit reputation.
10. Is there anything in my credit report that cannot be remedied?
Alas, if your credit history problems go deeper than late repayments — such as default, bankruptcy or debt management programmes — these will also be reflected in your credit report. Default records will be retained for 3 years while Bankruptcy records will be retained for 5 years. This means even after you are discharged from bankruptcy, you can still face difficulties taking up loans for the next few years.
The credit report should states whether the default is outstanding, whether debt management programs are in progress or whether you have been discharged from bankruptcy as well.
Generally, these are the codes you (or your banker) definitely do not want to see:
W code: This refers to loan default, which is basically the worst code you could see. This does not get reset and will scar your credit score.
R or S codes: This means the bank has closed off your account/credit facility, and you have settled or restructured your outstanding debt.
H code: Involuntary closure of your account with outstanding balance.
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