How to Use a Loan to Improve Your Credit Score (Without Digging a Deeper Hole)

To understand how to boost it, you need to understand what it is. To put it as simply as possible, a credit score is a number that shows the lender how likely you are to pay your bills on time. Depending on your credit score, the lender will decide the amount they are willing to give you, the interest rate and other loan terms. Your credit score can be checked on the Singapore Credit Report website. In Singapore, the credit score can range from 1000 to 2000. A good credit score would be considered one between 1900 and 2000. There are several factors that impact your credit score:

• Payment history – This refers to you paying your bills on time. The more often you are late with your payments, the worse it affects your score.
• Length of credit history – How long you’ve had credit accounts. Usually, longer credit histories are considered less risky.
• Credit mix – The variety of accounts that you have. A combination of revolving credit and installment loans can boost your credit.
• New credit – How often do you apply for new credit. Too many recent applications show that you are desperate for a loan, which doesn’t look good for you.
• Amounts owed – How much debt do you currently owe, compared to your credit limit, is also important.

This article by Investopedia goes into a deeper explanation of what a credit score is. You get to learn what it is, how it works, but also how to calculate it! Understanding the credit score concept will allow you to dive into the borrowing waters with more ease.