One of the biggest factors that affect your credit score is your debt. How you manage your debt has a direct effect on your credit score and consequently, on your ability to borrow money. It also has an effect on your ability to get a low insurance rate.

If you are interested in seeing your credit score, then you may inquire at the Credit Bureau at Singapore.

Take note that your income is not a factor in your credit score. Do not be too surprised if you still find it difficult to get approved for new loans or credit cards even if you have a low debt-to-income ratio. Even if you have a decent income but you are not able to manage your debt properly, then your credit score may be too low.

Know the difference between Good Debt and Bad Debt.

Unsecured Debts

Unsecured debts refer to debts that are not secured by collateral properties. These include your credit cards and personal loans. Having a lot of unpaid debts, especially high credit card debts, can pull down your credit score. The calculation of your credit score takes into consideration your credit utilisation. This refers to the ratio between your credit card balance and your credit limit, which financial institutions report to the credit bureau.

The higher your credit card balance relative to your credit limit is, the lower your credit score gets. This means that it will be best to avoid maxing out your credit balances. Going over the limit is the worst that you can do.

The calculation of your credit score also takes into consideration your on-time payment percentage. Financial institutions report both your on-time payments and late payments to the credit bureau. Even just one late payment can negatively affect your credit health for months or even years. Aside from on-time payments, financial institutions will also report any increase or decrease in your personal loan balance.

If you default on your unsecured debt, the financial institution reports the account as past due. If the account remains delinquent for over 150 days, then it will be reported as charged-off. This means that the financial institution has already considered the debt as a loss. Delinquencies such as charge-offs have a serious effect on your credit score.

Secured Debts

Secured debts, as the name suggests, are debts secured by collateral properties. These include mortgage with your home as the collateral, and car loans with the car as the collateral.

If you default on your secured debt, the financial institution will seize your property, and report it to the credit bureau. Just like a charge-off for unsecured debts, the seizure can greatly pull down your credit score.

Fortunately, it is still possible to improve your credit score even after it dips too low. One way is too promptly meet your monthly repayment sums over a 12-month period. Another way is to get expert advice and support from a credit counsellor in Singapore.

Here’s how you can Take Account of Your Debts.

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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


  1. […] It’s not bad to own a credit card. It’s very useful and it will help you purchase things that are too expensive to pay one-time-big-time. However, using a credit card comes with great responsibility. Make sure that you don’t swipe and feel that you got something for free. You will have to pay with cash when your bill comes and you have to make sure that you pay everything on time so that you won’t get a bad credit score. […]


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