When you’re looking to apply for a loan, one of the first things that lenders will look at is your credit score. If you plan on borrowing money from a licensed money lender Singapore like QV Credit, it’s important to maintain your credit score so that you can get approved for the loan.
In this blog post, we’ll discuss what a credit score is, why maintaining your credit score is important, and what can happen if you don’t.
What is a Credit Score?
The term credit score is used to describe the likelihood that a borrower will repay their debt. The higher your CS or credit score, the more likely it is that you’ll get approved for a loan and other forms of financial assistance.
Poor or limited credit histories may result in low scores, which can lead to rejection by licensed moneylenders who use these ratings as part of their due diligence process before approving any lending request.
You’re not required to pay a fee to check your own personal score from one of these organizations; just make sure you know what your score is and why it’s important to maintain.
Why Should I Maintain my Credit Score?
Your CS or credit score can affect many aspects of your financial life, so the best thing you can do is always make sure that you are in good shape. For instance, lenders will take into account your history when deciding whether or not to approve a loan application for licensed money lending Singapore or other types of financing options, like personal loans.
If you have bad credit scores from missed payments in the past year or two because you were struggling with finances yourself, then there would be an increased risk that licensed moneylenders may deny such a request and leave applicants unable to get approved for any type of borrowing at all.
Tips for Maintaining your Credit Score
If you’re looking to make sure your credit score is in good shape, here are some tips on what you can do:
- Be diligent with payments.
- Consider a debt consolidation loan or debt management plan.
- Review your credit report and score carefully for errors that could be lowering the number, like incorrect accounts listed as delinquent on unpaid balances.
- Make it a habit to pay more than the minimum due when it comes to licensed money lending Singapore or other types of loans. This tells lenders that you’re capable of repaying and managing debt responsibly. A moneylender will be much less likely to turn down a loan application from someone who’s never missed any payments before because they know this person has already proven themselves responsible enough for financial assistance in the past.
- Pay off old debts as soon as possible, so there aren’t high balances hanging over your head anymore; licensed moneylenders will want applicants who have demonstrated their ability to manage all sorts of obligations responsibly.
- Keep in contact with licensed money lenders and other creditors so they know you are still interested in borrowing and have a history of being an active borrower.
- Try to maintain at least one open credit card account and always make your payments on time, no matter what. Running out of available lines or not paying the minimum due can be a potential red flag for licensed moneylenders because this shows there is less capacity to repay loans going forward.
A licensed money lender can help you with these things by making sure that they’re kept up to date and inform you about what’s important to maintain throughout the process of applying for loans and other types of financing options.
What Can Happen if you have a Bad Credit Score?
If you don’t have a good CS (credit score), licensed moneylenders may take advantage of you. For instance, they could charge very high-interest rates on loans and other forms of financing options like personal loans because the applicant would be at an increased risk for not paying back any type of borrowing requested due to their past history in these areas.
Therefore, it’s important that licensed moneylenders are kept up to date with your current financial situation so they know what sort of risks might come into play when approving lending requests or setting terms.
When applying for a loan or another form of financial assistance, make sure you check out your credit report and scores carefully beforehand. This will aid to ensure that there aren’t any errors listed that could lower this number, such as old accounts that were listed as delinquent on unfixed unpaid balances.
If you are trying to maintain a good credit score, licensed moneylenders will want applicants who have demonstrated their ability to manage all sorts of obligations responsibly in the past before approving lending requests.
When it comes to licensed money lending or other types of loans, make sure you pay off any old debts and keep up with payments, so there aren’t high balances hanging over your head anymore. This will show licensed moneylenders that you’re able to repay and be responsible for debt properly.