Singaporeans knew the significance of loans in their daily lives. Sad to say, only a few knew the importance of a good credit rating.
A credit score can make or break your future plans. A low credit score is very critical in your financial standing.
See the grave impact if you have a low score. Wake up! Realize how low credit score affects your life.
Influences of a Low Credit Score
Banks and money lending institutions determine your default tendencies through your credit score.
Employment status and annual salary affect your new credit line application. The same goes for your credit score.
There is great damage in your life if you have a low credit score.
See how it affects your life and future plans.
Higher Loan Interest Rates
Your credit score is an indicating factor if you’re a potential default borrower or not. Therefore, lenders and creditors tend to charge a higher interest rate. It serves as their safety net.
Most lenders treat the interest as a risk payment, especially if you have a low credit score. Licensed moneylenders, on the other hand, give reasonable interest rates for low credit score borrowers.
If you want to save yourself from paying more interest, monitor your score regularly.
Failure to Secure a Home
Property owners check home buyer’s credit scores before purchase. Why? They need assurance that you can continue mortgage payment in the long run.
Kinda think of it, who wants to sell a property without a guarantee?
Having a low credit score hinders your home purchase. A home loan is usually denied. Sometimes, you might end up paying a bigger down payment than the usual.
Do yourself a favour. Start building a good credit score as early as now.
Lose a Good Car Deal
The same thing goes when you buy a car. An auto loan is typically rejected for low credit score borrowers. If granted, a smaller loan amount is only approved.
Whether it is a good car promo or not, your credit record is always checked.
Be mindful of it. Always pay your dues on time. For sure, you will recover from your low credit score.
Rejected Mobile Phone Contract
One of the requirements of telecommunication companies is your credit score.
As they run through your score, they can assess how diligent you are in paying your monthly bills. An affirmation if you can handle additional payment is necessary.
Don’t expect approval, if you have a low credit score. Try out their other option. Choose between a monthly contract or a prepaid phone.
Having a low credit score is devastating, even your mobile plan is affected.
Delayed Business Start-Up
Business starters take out a business loan for funding.
There’s a slim chance of approval when borrower’s have a low credit score. Licensed moneylenders in Singapore may still approve your loan. But, the amount of quick cash lend is limited only.
Stay confident with your business endeavour. Create a healthy credit score. Take out small loans and repay on time. True enough, your low credit score will be better.
Avoid all these possible problems. Check your credit score right now. If you have a low credit score, find ways to improve it. It’s never too late to build a strong and healthy score.
Top 3 Factors that lead to a Low Credit Score
A low credit score restricts the window of opportunities. You might miss financial possibilities knocking at your doorsteps.
There are several factors that greatly affect your score.
Get to know the top three factors that drag down your credit score.
Late Payments
Payment history is a contributing factor in the credit score.
Consistent late repayments seriously hurt your credit score. This decreases the chance of approval to your credit card and loan applications.
Keep in mind that delayed payments are better than not paying at all. Ignoring your credit card and loan bills completely is a turnoff. Financial institutions see it as a red flag.
Do your best in making on-time payments. That’s the least you can do for your low credit score.
Maxed Out Credit Cards
The total amount of debts is the second most important factor. It evaluates your financial credibility.
Too much use of credit cards damages your credit score. It affects your overall creditworthiness. Financial institutions interpret it that you can not handle your finances wisely. You’ll find it hard to open a new credit card account or secure new loans.
For the safety of your score, spend only with what you only need.
Home Foreclosure
Home foreclosure starts when you get behind with your payments and default on your mortgage. It is recorded in your credit report.
Banks and money lending facilities might doubt your repayment capability. Thus, declining your home loan application.
No worries. You can still rectify it. Talk to your trusted licensed moneylenders. Get the best advice in reviving your low credit score.
With this information, you can avoid dragging your score down. Take full responsibility for every financial decision you make. This way you can dodge having a low credit score.
Understanding your credit score is basic. Learn how to manage it. Build a good score as early as you can. Don’t waste time. Realize ahead of time how low credit score affects your life.
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