Undoing years of damage – How to repair your credit in 5 easy steps

Your credit rating is not just a number. It determines whether you are eligible for a personal loan in Singapore, the size of the loans you can receive, the interest rate charged, and even your future access to more credit. A poor credit score today can cost you thousands of extra dollars in interest and fees for years.

Verify your information

Before you can improve your credit score, you should check if it is accurate.

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In Singapore, credit reports are issued by the Credit Bureau of Singapore (CBS). That credit assessment is not static. If you have been responsible with your financial obligations, maintained a good repayment history, and have been gainfully employed, your credit score improves over time.

However, mistakes do occur. Information that improves your score is overlooked, thus jeopardising your access to credit.   If you want a personal loan from a licensed money lender Singapore, always check to see that your report is accurate. 

First, check the personal information section. It contains your full name, NRIC number, nationality, date of birth, marital status, and address. While this information does not affect your credit rating, make sure that it is correct. 

Discrepancies indicate that your information has been mixed with someone else’s. You do not want their poor financial decisions affecting your credit. Contact CBS and ensure that the incorrect information is wiped from your record.

Repair your credit

Once you have ascertained that your credit score is correct, it is time to begin the credit repair process. Use these 5 simple steps.

1. Catch up with payments

The first step to credit repair is ensuring that you are current with all your debts. This includes your mortgage, vehicle loan, credit card debt, and other loans from any licensed money lender Singapore

One of the most effective things that you can do is create a budget. Assess your net income and determine if your current expenses can be justified. Get rid of luxury extras like that superfast broadband line and multiple pay-TV subscriptions.

If you are behind in payments, address that immediately with the money you save. If you are already in the black, talk to your local lender or bank about early repayment. Check if you will be eligible for lower rates and better terms, and ask to renegotiate your loan(s).

2. Maintain your creditworthiness

You are not out of the woods as soon as you have worked out your budget and renegotiated the terms. The harder part is keeping up with payments going forward. The budget that you created in the previous step will help here. 

Remember that your ability to keep paying your monthly recurring debts on time is the single most important factor that affects your credit score.

3. Rearrange your debt

Many borrowers feel trapped in their debt, especially credit card debt. Banks and credit card companies make huge amounts of money through interest and late payments on such debt. Nip it in the bud by reassessing your debt burden.

Transfer credit debt from the company that charges the highest interest to the one that charges the lowest. Then, pay off the largest ones in succession. The best approach is to close that line of credit once you have completely resolved the debt.

Stick with one or two cards with the lowest rates and most benefits.

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4. Don’t seek credit

The first reason is that we tend to spend more when we know we have a huge credit limit. The second is that applying for credit immediately lowers your credit score, regardless of whether that application is successful.

Only ask for credit when you know that you meet the eligibility requirements and that you have the discipline to not overspend.

5. Maintain some debt

This may seem counterproductive to all we said before but it is how credit scores are calculated. A CBS credit assessment considers an individual’s ability to juggle multiple sources of debt at one time. So, a personal loan in Singapore can improve your credit rating even if you already have a mortgage and credit card.


Repairing a damaged credit score is not as difficult as it initially seems. These 5 simple steps will have you on your way to good credit and better loan terms for years to come.