Here are several things you can do to get a credit card in Singapore even if you have no credit score.
Bad credit scores are a problem in Singapore, but so is having no credit score. There are ways Singaporeans can get around this and apply for a credit card successfully.
Once you’ve owned and used a basic card for a while, getting a credit card with better rewards becomes a lot easier later on.Here’s how to get started:
How to Build a Credit Score in Singapore
You will need proof of income to get your first loan or credit card. Without using these facilities, it’s much harder to build up a credit score. The banks can’t tell how responsible you are, if there is no record of you borrowing or making repayments.
Here’s how to “break the egg” and get your first credit card:
1. Post Collateral for Your First Credit Card
Many banks have a deposit option, for those who want a credit card but have poor or no credit score. This involves putting down a fixed deposit, usually with a minimum of $10,000. This deposit earns no interest, but is used as collateral for your credit card (if you cannot pay the credit card debt, the money will be taken from this account).
After getting your first credit card, do not use this method anymore. Use and pay back the credit card responsibly, so that you can qualify for other credit card options in the future.
Your $10,000 deposit is stagnating because you earn no interest on it, and you should not make this a prolonged deal.
2. Apply For S$500 Credit Cards
Most financial institutions do not require a credit check, when the loan amount is $500 or below (note that we say most, not all). This means the $500 student credit cards may be available to you, even if you have no credit score.
Note, however, that you can get a bad credit score by failing to make repayment – even if the amount is just $500. So always be responsible.
3. Be Diligent in Declaring Your Income
Not only is it illegal to hide your income, your tax forms can be used as proof of income to secure a credit card. This is especially true for freelancers or other self-employed persons. If you do not have or receive your tax form for any reason (you should), contact the Inland Revenue Authority of Singapore (IRAS).
4. Have a Guarantor
If for some reason you absolutely cannot get credit, you can consider using a guarantor. This is when someone else promises to pay your debts, in the event that you default. Most of the time, a guarantor must be someone who earns at least $3,000 per month, and is not also a guarantor for another loan of yours. For example, if your sibling is the guarantor for your education loan, it may not be possible for her to also be guarantor for your credit line or card.
Most of the time, a guarantor must be someone who earns at least $3,000 per month, and is not also a guarantor for another loan of yours. For example, if your sibling is the guarantor for your education loan, it may not be possible for her to also be guarantor for your credit line or card.
You can check your credit score via Credit Bureau Singapore for a small fee of S$6.50. But from today until 31 December 2016, SingSaver.com.sg is giving you free access to your credit report! Click on to check your credit health and claim your report.
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By Ryan Ong
Ryan has been writing about finance for the last 10 years. He also has his fingers in a lot of other pies, having written for publications such as Men’s Health, Her World, Esquire, and Yahoo! Finance.