Everything you need to know about Credit Report

[Dennis Ng]

Since year 2002 with the Set up of Credit Bureau, all your past credit records with banks are now centralised for review by banks whenever you apply for a Loan (including Housing Loans, Car Loans, Personal Loans) and credit cards.

Below are everything you need to know about Credit Report provided by Credit Bureau Singapore.

Cheers!

Dennis Ng, http://www.HousingLoanSG.com

Q What is a credit report?

A It is your credit payment history, and is released to banks or other credit providers when they inquire about you. It includes personal profile details and records how promptly you made payments over the previous 12 months. The data is provided to Credit Bureau Singapore (CBS) by all retail banks that are members of The Association of Banks in Singapore (ABS).

Q What goes into the report?

A It can include the following:
- Basic individual profile, including IC number, date of birth, address, occupation and marital status;
- Records of all credit checks made; and
- Monthly records of how prompt repayments were in relation to the due dates.

Q Who can access my report?

A Only CBS and institutions participating in CBS that are approved by the Monetary Authority of Singapore (MAS) can access your credit report.
Access by unauthorised personnel, such as direct marketing companies, is prohibited. All access to the CBS database is tracked.

Q How does having a credit bureau benefit me?

A Over time, banks can use the data to differentiate between creditworthy and credit-risky customers. This helps cut processing time for loans.
If your credit history is good, you stand a better chance of having mortgage packages, personal loans, car loans or credit cards approved.

Q How can I obtain my report?
A You can use your SingPass to access your credit file online at the CBS website at www.creditbureau.com.sg You can get your credit report instantly online.

You can also go to the CBS office at #17-02 SGX Centre 2 or a SingPost office. Bring your photo ID or passport.

Collect the file after five working days at the bureau or SingPost branch. It can also be sent to you by normal or registered post.
Getting your file costs $5 plus GST.

Q What should I do if I disagree with the information in my report?

A Ask CBS to investigate and rectify any errors.

Q How do I avoid having any negative data about me in my report?
A Exercise good money management and make repayments on time.

Q If I am a first-time borrower, will I be at a disadvantage as there will be no information about me?

A For new borrowers, a new file is created, so there is a disadvantage.

Q Why do you get a credit score in numerical form in reports in Britain and the United States, but not here?

A A credit score is a numerical representation of an individual's creditworthiness. The higher it is, the more cre- ditworthy you are deemed to be.

Different institutions employ different assessment criteria, so no one system is necessarily 'better'. CBS says it is developing a scoring system that is being assessed by some banks.

Q Do banks receive the same reports that consumers do?

A Banks and consumers have access to the same credit payment performance data shown in the credit report.

But banks can also request a search for litigation information, such as whether a writ of summons has been issued. CBS says litigation data does not form a direct part of the report, and it searches the litigation writ database only if a bank asks for it.

Q If my report shows many 'C' and 'D' codes, will I still get my loan?

A A credit report is just one factor in the bank's decision. It will also look at a client's debt-to-income ratio, or his income level and occupation.
'If there is any delinquency on the file, the banks will take notice, but that's not to say that a bank will not supply (credit) because of some delinquency,' said CBS general manager Mark Rowley. 'The more delinquent the loan repayment history, the higher the risk for a bank to go ahead with the loan, but...each bank employs different risk policies.'

How bad credit affects you
Q How long are my credit 'black marks' recorded for?

A Records of bad debts are kept for six years from the date they were uploaded to CBS. Bankruptcy records are kept for six years from the date of discharge.

Payment defaults reported by financial institutions (for mortgages, credit cards, unsecured loans and car loans) are kept for six years from the date they were loaded.

Credit accounts are displayed for three years from when the account was reported as closed or terminated.

Q Apart from my credit history, what factors do banks weigh when looking at a loan application?

A Occupation and salary. A high salary is a plus but doesn't always guarantee success in an application. Banks also consider your debt burden: whether loans make up a comfortable 30 per cent of your income or 80 per cent.

Q Does the bank view payment defaults on secured loans more seriously than those on unsecured loans?

A No difference. Whether you're applying for a secured loan (say, a car loan) or an unsecured one (say, a personal credit line), banks will be uneasy about granting you the money if you are perpetually late in paying or always giving excuses for defaulting.

Q Do CBS or banks have 'blacklists'?

A CBS doesn't have such a list, but banks do keep a 'negative list' with names of clients whose debts were written off. For instance, if you default on a $5,000 loan, that will go into your history, though the sum is too small to justify the bank suing you.

Q If my credit application fails, will this fact appear in my record?

A No. Lenders do not provide this information to CBS.

Q If one bank denies me credit, will others also reject me?

A Not necessarily. A different lender might look at the information differently, or weigh other factors. If you have been denied credit, you can review your credit report at CBS free of charge.

Q When is an account classified as a 'default'?

A Typically, an account is at least 90 days overdue before it is tagged as being in default. It is a commercial decision made by the banks, not CBS.
Q If I'm late in paying the minimum sum on my credit card but the bank waives the fees, is the late payment still recorded in my report?
A Yes. Even if the bank waives your fees, it has already been auto-recorded that you paid late.

[Dennis Ng]

Thanks Dennis for this wonderful article
I have a question in my mind if you can answer
What if a credit report I receive on an applicant has negative information, and I choose not to rent to him or her?
Is it still worth it considering the application?

Hi master01,
thanks for your question.

do you mean that you are renting your property to a tenant, and you decide not to rent to him becos of adverse information on his credit report?

And what application are you referring to in your question?