It is strange that most people living in Singapore, one of the world’s largest financial hubs, are often uninformed about credit score and not know the essential things to consider before getting a loan. When it comes to dealing with credit reports, people mostly manage with guesswork. And there are many misconceptions about credit scores. For instance, many people believe that bankruptcy can ruin their credit score once and for all. Here are some common myths surrounding credit score in Singapore.

Myth 1: That credit reports consist of credit score

Contrary to a common misconception, credit reports do not contain credit score. Many consumers believe that getting a free online copy of their credit report will also reveal their credit score. The truth, however, is that to get your FICO credit score, you have to shell out about $20. However, when loan applications are rejected or higher interest rates proposed, licensed moneylenders are required to provide you with a free copy of your score.

Myth 2: Personal details are included in the credit report

This is far from the truth, as only information pertaining to debt is included in the credit report. The report does contain your social security number and date of birth, but not your race, ethnicity, income, investments or criminal record. Also, the lender may not necessarily see whatever is visible to you on your credit report. Soft inquiries visible to you are not shared with creditors and hence credit score remains unaffected.

Myth 3: Your credit history abroad has an impact on credit rating in Singapore

There is no official exchange of credit data across the border. If as a foreigner, you have never borrowed money in Singapore; your credit rating will be CX, even if it was different in your native country. While in Singapore, your credit history and score will be compiled only with your first loan. However, a financial institution or bank can always check for credit reports from your native country.

Myth 4: Your credit score would be high if you have no credit history

No credit history is actually a drawback for your loan application, because the lender finds it difficult to judge your creditworthiness with any previous record. In such cases, they need to lend at their own risk. You will begin from a score of CX and will have a thin credit file. Having no credit history is slightly better than defaulting or being bankrupt but it does not equate to a good credit score. This is best seen in cases of home loans, where consumers with a credit score of CX do not receive full financing.

Myth 5: Checking credit reports frequently could affect your credit score

The truth is that you can safely view your credit reports as many times as you want, and it does not impact your credit score. However, when you allow a moneylender to access your credit reports, the hard enquiries done by them can hurt your credit score. If, however, you have been in talks with different lenders, credit agencies can gauge that and you will not lose your credit score. If your report has been looked up multiple times in a 30-day period, all the inquiries will be consolidated as one hard inquiry.