Build Better Credit Habits as a Budding Borrower

Start early, and engage in healthy financial practices while you are still young. How you manage your money in your 20s can make or break the rest of your financial life.

Habits are easier to form than to break, so the good financial habits that you establish early on will tend to stay with you well into your retirement years. Here are 6 smart credit habits that young adults should cultivate from the very start.

  1. Take the initiative to learn about personal finance.

Simply looking up financial articles on the internet is already a step towards financial independence. In this age of convenient technology, it has become quite easy to learn about good financial practices. Get yourself educated on the very basics of personal finance including how to read your credit report and how to improve your credit score.

  1. Keep an eye on your credit.

Constantly monitoring your credit report is an effective way to learn how different factors affect your credit. For example, you can observe how your credit moves after each of your credit-related actions, including getting a loan and paying your outstanding balances.

Aside from getting good firsthand experience, you may also be able to quickly catch errors or even fraudulent activity on your report. To see your credit score, you may inquire at the consumer credit bureaus in Singapore: Credit Bureau and DP Credit Bureau.

  1. Set up a budget and live below your means.

To live below your means, you have to spend less than what you earn. The very first step to this is to assess your financial situation. This will help you see the whole picture a lot easier. Determine how much you have, how much you earn, how much you spend and how much you owe. Take note of all your assets and debts, and have a clear record of the important information. Always remember to include a timeline showing the important points such as the dates you opened your accounts and the repayment terms of the loans. A sample format of your record might look like this or this.

Once you have a clear understanding of your financial situation you can work out a budget. Your allocations for each spending category will depend on how much your income is, and how much you wish to save. Once you have a financial plan, strictly limit your spending to stay within your budget.

If you find out that your expenses are greater than your income, quickly look for ways to cut down your expenditure. Cancel unnecessary outlays such as magazine subscriptions, expensive fashion pieces, luxury items and the like. Try to eat at home more often instead of going out to expensive restaurants. Skip the happy hours during Friday nights and the weekends. Limit your shopping sprees and impulsive purchases. Save your money for basic needs such as healthy food and versatile clothing as well as tuition fees and housing repayments.

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  1. Set up an emergency fund.

According to a survey conducted by, “most Singaporeans aged 20-35 years old are just one missed payment away from financial disaster”. The survey revealed that 4 out of 5 respondents have no savings to fall back on in case of an emergency.

Aside from setting aside money for your spending categories in your budget, you also have to set aside money for an emergency fund. Allocate a fixed percentage of your paycheck to the emergency fund and put it into an account that should only be used for that figurative rainy day.

  1. Make timely payments

Non-payments as well as late payments on your bills and loans may lead to bad credit records. One of the highest weighted factors used to compute your credit score is your on-time payment ratio. To consistently make timely payments, keep track of all the due dates for your credit cards and loans, and set up a calendar alarm before the payment is due. If your bank allows it, you may also automate your payments.

  1. Pay more than the minimum.

Break the habit of paying only the smallest amount required every month. Of course, this can be quite challenging, especially if you already have a large number of monthly bills and loan instalments to pay. You may have to carefully examine your budget and cut down on some expenses.

By paying more than the minimum, you can clear any debt such as student loans and credit card debts while you are still young. By the time you have greater financial obligations due to your own family when you’re in your 30s, you won’t have to worry about those old debts anymore. Moreover, the extra dollars that you put into your monthly instalments can help you save hundreds or even thousands of dollars in interest.

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Founder @ The New Savvy
Anna Haotanto is the Advisor (former CEO) of The New Savvy. She is currently the COO of ABZD Capital and the CMO of Gourmet Food Holdings, an investment firm focusing on opportunities in the global F&B industry. She is part of the founding committee of the Singapore FinTech Association and heads the Women In FinTech and Partnership Committee. Anna is the President of the Singapore Management University Women Alumni. Anna invests and sits on the board of a few startups. Anna is also part of the Singapore Chinese Chamber of Commerce & Industry Career Women’s Group executive committee. Anna’s story is featured on Millionaire Minds on Channel NewsAsia. She hosts TV shows and events, namely for Channel NewsAsia’s “The Millennial Investor” and “Challenge Tomorrow”, a FinTech documentary. Anna was awarded “Her Times Youth Award” at the Rising50 Women Empowerment Gala, organised by the Indonesian Embassy of Singapore. The award was presented by His Excellency Ngurah Swajaya. She was also awarded Founder of the Year for ASEAN Rice Bowl Startup Awards. She was also awarded the Women Empowerment Award by the Asian Business & Social Forum. Anna has been awarded LinkedIn Power Profiles for founders (2018, 2017), Tatler Gen T, The Peak’s Trailblazers under 40 and a nominee for the Women of The Future award by Aviva



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