Money Talks Podcast: How your credit score makes a difference when applying for loans
Not having any credit at all can affect your loan options as financial institutions won’t be able to gauge how you manage your finances.
Yes, we all have a credit score and that number provides a snapshot of your financial health. How do you find your score and make sense of it?
In this episode of Money Talks, Wong Sok Quan from Credit Bureau Singapore gives a breakdown of how to read your credit score, and how it can affect your loan options and even job opportunities.
Here's an excerpt from the podcast:
Wong Sok Quan:
So I have a credit report here with me ... The first page is just your personal data (and) details. We'll focus more on this account status history. For the first row, we'll show the type of credit facilities (that) you have, such as bank loans, credit cards and unsecured credit. Any mortgage loans will also appear in this section.
Andrea Heng:
I see HDB loan there as well. So obviously, each month that you pay your loans, your credit cards - that number is going to change every month, right? So what else am I seeing on this credit report?
Sok Quan:
You will see that there is this section under previous inquiry. You will see that okay, the bank is reviewing ... you on your existing credit facility, or if there is any new application. So for this new application, we have to take note that we should refrain from applying for too many new credit facilities at a short period of time.
Andrea:
How short is short?
Sok Quan:
It depends on the (bank's risk appetite). So if a person applies for 10 credit facilities within one month, it shows that this person requires a lot of credit within a short period of time. So it will more or less affect the credit score if you have too many new applications in this section.
Andrea:
So don't apply for too many credit facilities in a short period of time.
