Your credit report provides a holistic view of your credit payment habits. It records your credit payment history compiled from all retail banks, credit card issuers and major financial institutions in Singapore. It also contains public information such as bankruptcy. By keeping track of your credit report on a regular basis, you will be better informed of any changes that have been made to your credit file. This in turn helps you manage your credit reputation more effectively as well as stay mindful of what the lenders know about you.
With the information in your credit report, you can make better borrowing decisions for future credit applications. Furthermore, borrowers who are at risk of credit problems can avoid running into deeper debt while those who are over-geared can take steps to reduce their outstanding debt.
From being able to better your chances of getting loans to protecting yourself from identity theft, a credit report can be very beneficial. Here’s how.
1. Prevents Your Identity From Being Stolen
Your credit report is a record of your financial behaviour. It tracks your borrowing and payment history, also known as your credit history.
When you pay attention to your credit history, you can easily spot any incorrect transactions or details that may have mistakenly been included in the report, such as the status of an account or overdue balances.
If you spot any of these, you can dispute the completeness or accuracy of it by consulting your credit bureau and they will post a notice in your credit file that the credit data is being disputed and is under investigation. That way, you can prevent any lenders referring to your credit file from making decisions based on incorrect information.
There is another potential meaning of such incorrect information, and one that is far more grave. If you spot any transactions or payments that you haven’t made yourself, it could mean that you have been a victim of identity theft. So by obtaining your credit report, you can spot and then initiate investigations against the same.
The good news is, credit bureaus can offer protection against such an occurrence. Credit Bureau Singapore (CBS), for instance, provides the option for you to subscribe to the ‘My Credit Monitor’ service.
This service carries out daily checks and notifies you in the event of any key changes being made to your report. This helps you stay ahead of the game and prevents identity theft from occurring in the first place.
2. It Gives You a Chance to Improve Your Credit Score
Your credit score is a number used by banks and financial institutions as an indicator of how you are likely to repay your debts and the probability of going into default. CBS Score is developed jointly with TransUnion using advanced modelling and analytics by an experienced global team of TransUnion analysts. The score utilizes Singapore's full market upload from retail banks on consumers' credit information and local characteristics to ensure its viability and application in the market place.
The credit score uses past credit information to predict future good and bad payment performance. It ranges from 1000 to 2000, where individuals scoring 1000 have the highest likelihood of defaulting on a repayment, whereas those scoring 2000 have the lowest chance of reaching a delinquency status.
By keeping track of your credit score, you can gauge the likelihood of getting a loan for any important expenses you may need to incur. If your credit score is low, your credit report should send alarm bells ringing within you to work towards on-time repayments of loans or credit card bills to help to fix your score over time.
Finally, you should also be aware of what your credit report can’t help you with. Your credit report does not include any information about your deposit accounts, income details, investments, telco bills or your partner’s credit history.
If you have applied for a new credit facility in the last 30 days with any of CBS member banks and financial institutions (view list of CBS members here), you can receive a complimentary copy of your credit report from CBS. Otherwise, you can purchase your report online to understand your credit report better.