Forum: Other factors key to having good credit score

We thank Mr Tan Jia Hao for his letter “Make it easier for people to get credit assessment” (Aug 26).

A credit score indicates how likely a consumer will repay his debts and the probability of the consumer going into default. It is an independent assessment of the individual’s risk as a credit applicant.

Although the credit score is a factor of a consumer’s creditworthiness, other factors like annual salary, employment period, and bankruptcy and litigation information are also considered.

Mr Tan raised a point on the effect on the credit score when a consumer makes multiple loan applications with Credit Bureau Singapore (CBS) members, who in turn make inquiries with CBS on the consumer’s creditworthiness.

Increased loan application activities have a direct correlation to credit risk and indicate that the consumer’s debt exposure is likely to increase. While this is one of the contributory factors, paying bills on time and reducing unnecessary exposures are the important keys to a good credit score.

Being late on any bill, for any length of time, is considered a possible indication of future non-payment of debt and has more adverse impact on the credit score.

Though the number of inquiries is a factor, its impact is relatively low and favourable factors as mentioned will have a more significant and positive effect on the score.

We would like to assure the public that when a consumer simply inquires about terms of a loan with financial institutions, there is no impact on the credit score until new application inquiries are made on his credit report by CBS members.

Likewise, review inquiries conducted by CBS members, under ongoing monitoring checks on their customers with existing loan facilities, and consumers retrieving their own credit reports have no impact on the credit score.

Consumers can obtain a complimentary credit report from CBS within 30 calendar days after their credit application has been approved or rejected by the CBS member.

Consumers who disagree with any data or discover facilities that they never applied for may approach CBS and its members to investigate and rectify erroneous records.

Mr Tan may contact us on 6565- 6363 or at consumer_services@creditbureau.com.sg for further inquiries.

Lily Tay
Business Development Director
Credit Bureau Singapore

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