Tuesday, June 7, 2016

Credit Report: GMGH's Chance of Default: 0.08%

This one is not I say one hor, but it is calculated by Credit Bureau Singapore.

For the month of June, they have teamed up with SingSaver to allow people to view their credit reports for free. Just open this link and follow all the steps. Don't worry, this isn't a sponsored post. I wish it was though. I would definitely endorse greater consumer awareness regarding understanding credit (debt).

Also to my understanding, since 1st April, people who apply for credit facilities will also be able to access their report, which would be generated anyway for the financial institution that is checking up on the person. I think that this is a great initiative to remind people to be prudent with the DEBT that they take on, and for them to always closely monitor how well they take on and manage their debts.

Of course, with such a sweet deal (normally it costs $6 + GST for a total of $6.42 to access your credit report), I jumped on the free shit bandwagon and accessed my credit report. I have always been curious to find out my credit rating.


Oh yeah. That's right. Yours truly has an AA risk grade with a PERFECT score of 2000. Based on CBS data, people like me have a 0.08% chance of defaulting.

And that probably explains the weekly affair of people calling me up with super special personal loans offers.

Although I have only been working 3 years, I think it is important to note that I did have a credit card which I opened up back in university days. And because I had opened that credit card, I actually began my credit history earlier than I expected. I doubt that you can just begin a credit facility and jump straight into the AA band if you make full payment in the first month. It would definitely take at least a year (I'm just speculating, I have no idea) or more to build up your credit score and move into the higher grades.

Why is it important to have a good credit history? Well, simply put, you get easier access and cheaper financing if you ever need to take out a loan. Of course to start a credit history, you need some form of credit, and I think credit cards can actually be used to help you save money, instead of being something dirty and naughty (apparently, there are people that view using credit cards with the same disgust as smoking or drinking alcohol. "It's a naughty bad thing to do!"). If you need suggestions on some beginner credit cards, scroll down to the bottom of the post in this link for an example of 2 rather decent credit cards that are not very complicated.

Some people are in the camp that all debts are bad. Personally, I can empathize with the dirty feeling of "owing" someone else something. It is of course mentally more relaxing to know that you have no outstanding debts and in a sense, be free.

However, there can also be a strong case for credit cards and I shall summarize it again:
1) Starting and building up your credit history
2) Free financing between purchase and credit card payment date
3) Saving money (through rebates, promotions, rewards)
4) Optimizing your wallet (some credit cards double up as membership / transport cards)
5) Convenience (no need visit ATMs to draw money so often, paywave/paypass transactions)

Just remember, if you have a credit card, always make sure to pay off your entire balance in full. I strongly suggest GIRO linking your credit card to your principal bank account to ensure that your payments are always paid in full and on time. No need to queue up at an AXS machine every month. No excuses about forgetting. Don't create a sloppy system with loopholes to trap yourself and make you fail. If you are going to do it, do it right, or not at all.

The simple rule of not just credit cards, but also for living with financial prudence, cannot be stressed enough, if you don't have the ability to buy something, do not buy it.

4 comments:

  1. This is a useful post on CBS teaming up with SingSaver to allow people to view their credit reports for free. I have always wanted to access my credit report but didn't think it was worth S$6.42. I was thinking such information should be free to encourage greater consumer awareness on credit. Thanks for providing the link!

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    1. Hi Finance Smith,

      Hahaha yeah the $6.42 kept me from finding out about my credit report for a long time. I'd actually like to know more about how they come up with credit ratings and also see a govt campaign about having good credit worthiness!

      Delete
  2. Thanks for the info GMGH! Was trying to get my credit rating report in the afternoon, but it kept showing site maintenance on Chrome. It was lucky that I chanced upon your post! (:

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    1. Hi xiao pang,

      I was actually having that problem since last Friday, but I managed to access the report today! Share this lobang with your friends!

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