Building Your credit rating Early Is Important For Young Working Adults: Here's How To Maintain A favorable credit record
Credit cards usually have negative association with poor credit card debts. However, like a young working adult, without past credit history or active credit facilities may not necessarily be to your benefit. Obtaining your first charge card will be useful in building your credit report and maintaining your financial health as the credit worthiness is assessed based on past and current credit activities. Making use of your charge card responsibly and paying entirely each month will help you develop a strong credit rating that could put you in good stead when applying for essential credit such as a future car loan or home mortgage.
Your Credit Score Can impact Your Credit And Job Applications
Having a good credit reputation may affect us in more ways than affecting our ability to apply for future auto loans and home mortgage. It might also possibly affect your work applications.
Companies are usually more inclined to employ those who seem responsible as well as your credit report is really a clear reflection of whether a person has been responsible and diligent in his or her repayment. A low credit score may be correlated with irresponsibility and bad financial management which poses as a warning sign to future employers. Companies are increasingly conducting employment checks on prospective hires to minimise any potential cases of theft and embezzlement.
Unfortunately, very few job seekers are aware that a below average score grade may affect their future job prospects.
Actions You Can Decide to try Conserve a Good Credit Score (And customary Mistakes That You Should Avoid)
A bad credit score is usually because of consumers not repaying the money they owe on time, which leads to your credit rating dropping significantly. Here are some actions you can take to maintain a good credit score.
Pay your debts promptly and in full
Always attempt to pay entirely as any outstanding balances is going to be charged at 24% per annum basis. You might consider repayment via GIRO to ensure payments are not late. Do take note that default records remain on your credit score for 3 years even after full settlement while bankruptcy data is retained for five years upon discharge.
Limit the amount of charge cards you own
Do cancel unused cards! It is more manageable to keep tabs on 2 credit cards than 5. And also, don't obtain a few credit facilities inside a short time – this sends an indication to creditors that you're desperate for credit and therefore are a risky borrower.
Pay down your debts and consider charging less
Creditors would rather see more space between the amount of debt reported on your charge cards and your total credit limits. The greater debt you have to pay off, the wider that gap, the better your credit score. Also, try not to be tempted by interest-free installment plans because they may accumulate to multiple plans!
Key Factors that will Affect Your Credit Score
|Key Contributing Factor||Description|
|Immature Credit History||Immature credit rating will normally contribute to the credit risk uncertainty|
|Credit Exposure||The level of credit exposure will generally bring about higher credit risk|
|Delinquency Presence||The existence of the delinquency is generally indicative of higher credit risk|
|Not Enough Clean History||Lack of clean credit rating will normally bring about higher credit risk|
|Adverse Credit History||Adverse credit history is usually suggestive of the higher credit risk|
|Too Many Enquiries||The frequency of credit applications may change up the credit risk assessment|
In a nutshell, having good credit habits and prudent behaviour far outweighs the negative consequences of having to construct or resolve a bad credit rating. Always remember to simply spend within your means, track your monthly expenses regularly and apply for loans using the careful consideration that you will be in a position to repay your debts on time and in full.
It is worth it to keep up to date on the details which go into your credit history to monitor your credit health, along with reviewing your report for inaccurate information. You can obtain your personal credit report directly from Credit agency Singapore.