Have you been turned down by banks or any top financial institution in Singapore when you knock at their doors to borrow money? Do they tell you there is no loan for your profile due to your credit score?

Well, it is because of poor scores on the credit report or lower incomes due to overburdening debt payments. Lenders deny you any loans if you have a bad credit background. You might be making mistakes unknowingly that are causing a bad credit score.

While you can get a bad credit loan in Singapore, you should try to maintain a good credit score to manage your financial challenges.

In this blog, we have listed the mistakes that can lower your credit score. Read them and take action to not make those mistakes.

What is a Bad Credit Score in Singapore?

A credit score is a four-digit number calculated for you based on past payment history on your loan accounts and credit cards.

In Singapore, a credit rating from 1,000 to 1,723 on a scale of 1000 to 2000 is considered bad. If it falls below 1723, it indicates issues with your finances, and you need to fix them immediately.

The higher the credit score, the better are your chances of getting approved for a loan or credit card.

Credit score range


Risk gradeProbability of default
1000 to 1723HH3.46% to 100.0%
1724 to 1754GG2.28% to 3.46%
1755 to 1781FF1.58% to 2.28%
1782 to 1812EE1.03% to 1.58%
1813 to 1824DD0.88% to 1.03%
1825 to 1843CC0.67% to 0.88%
1844 to 1910BB0.27% to 0.67%
1911 to 2000AA0.00% to 0.27%

Source- Credit bureau

Top 3 Reasons Why Your Credit Score is Low

1.    Late Bill Payments

Delinquent payments and failure to pay your bills on time are major factors that affect your credit score. The late payment shows that you failed to meet your obligations when they were due. It is not a good sign for lenders because it suggests that you might also do so in the future.

Late payments can be due to various reasons, such as losing track of time or being unable to pay on time because of an emergency (e.g., car breakdown). If you cannot avoid missing payments, ensure that you make up for them as soon as possible.

2.    Credit Card and Loan Default

Default on any payment obligations, such as mortgage loans or car loans, adversely affects your overall financial situation. Hence, it affects your ability to get further loans or open new accounts with banks and other financial institutions.

3.    Poor Budgeting Skills

This one is very common. Having poor budgeting skills means that you’re spending more than what you earn every month. It is detrimental to both personal finance and your credit rating.

It is the most common cause of bad scores, especially among young people who don’t yet have much experience managing their finances. They tend to spend money on things that aren’t essential, like clothes, electronics, and partying. And when you’re older, it’s easy to fall into debt if you’ve been spending more than you make for years.

4.    Multiple Credit Accounts

Having multiple credit accounts is a reason for a bad credit score in Singapore. Too many lines of credit with different lenders can harm your credit score as it shows that you may not be able to pay back your debts. In addition, having several active lines of credit may indicate that you are trying to borrow money excessively, which could also result in an unfavourable rating from the lender. It is particularly true if you have recently applied for several loans or opened new accounts within a short period.

5.    Unpaid Tax Bills/Arrears

An outstanding debt owed by a company from taxes or other government-related fees will affect its business reputation and its ability to get new contracts or loans from banks or other financial institutions in the future.

6.    Frequent changes in Address or Employment Status

Changing addresses or employment status often shows lenders that you might be moving out frequently and thus unable to pay off your debts effectively. Furthermore, frequent job changes often result in fluctuating income levels which could also affect your ability to pay back.

7.    High Debt-to-Income Ratio (DTI)

Your DTI refers to the amount of monthly debt compared to your monthly income. If this ratio is too high, it can mean that you are unable to pay off all of your bills each month without incurring any additional debt.

For example, if you earn $4,000 per month but owe $800 per month on your credit cards and other loans, your DTI is 25%. A high DTI means that there is a risk that you might miss payments or default on payments due to overspending and lack of liquidity.

8.    Having No Credit Card or Loan History

Having no credit card is a reason for bad credit scores in Singapore. A credit card is a great way to build your credit history, as it shows financial responsibility and a good payment record.

If you have never used a credit card, it means you have no record of your monthly payments to any creditor. You have never taken out any loan and have no record of paying back your debts. It means that when banks or lenders check your credit history, they will find nothing to make them confident about your payback, and they immediately reject your application for a new line of credit.

So, you need to apply for loans and pay them off on time to have a good credit history.

Ensure that you do not make the above-mentioned mistakes to maintain a good credit score.

If you are facing a problem getting a loan due to a bad credit score, do not worry. You can still apply for bad credit loans with OT Credit! Visit our website to learn more about our lending services.

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TTMedia - a digital agency in Singapore that designed the creative website for OT Credit - a money lender in Singapore that offers the best loan services.