【Improving credit score】 Loans must be repaid?
Are you an honest person who always pay back your loans? To prove yourself to others, you may need a friend as guarantor. However, to prove yourself to a bank, a credit card issuing company or a finance company, you need a favorable credit score!
Credit score can be divided into 10 grades, ranging from A and J—where A to C is considered as good, I to J is considered as poor. There are mainly 5 factors impacting a person’s credit score, including payment history, aggregated balance, length of credit history, types of credit account and newly opened credit account. Among these 5 factors, payment history weighs the heaviest, as it indicates your financial management style.
How important is having a positive credit score? It can lower your annualized percentage rate (APR) when you are applying for credit. For example, the APR for an A-grade customer can be less than 5%, whereas that for a J-grade customer can soar to 45% or above!
Bear in mind the following 3 tips to improve your credit score with ease!
Your payment history reflects your attitude towards financial management directly. So no matter it is a loan or credit card debt, be sure to repay on time. The late record can be kept up to 5 years, even if it is just one day late ! In addition to repaying within the deadline, your credit score can also be affected if you are only making minimum payments. Want to avoid utilizing credit card to repay which will elevate your interest expense and lower your credit score simultaneously? Apply for DBS Debt Consolidation Loan to clear all your debts in one go, and easily improve your credit score: https://go.dbs.com/hk-learn-dc-en
Whenever you apply for a new loan/credit card, the financial institution will enquire your credit report. If many enquiries were made within a short period, it shows you have high demand for credit facilities, i.e, you are financially unstable and it affects your credit score! If frequent demand for loans is anticipated in the near future, you can consider applying for DBS Cashline Revolving Loan! With one successful application, you can make withdrawals and repayments within the approved loan amount at any time. No need to reapply for credit and you can enjoy a flexible cash flow. Your credit limit will be automatically restored every time you make a repayment; this facilitates you to manage your short-term cash demands: https://go.dbs.com/hk-learn-cl-en
“I don’t borrow money and have never used a credit card. I must have an excellent credit score for not owing anybody!” This idea is actually untrue! When you have no credit record at all, financial institutions cannot assess your financial standing by your credit report. Without sufficient information, your credit application might be denied, or result in a higher APR.
DBS offers various loan services to meet your financial needs. Check which suits you best, and follow the 3 tips above to improve your credit score!