Do you want to boost your credit score? More importantly, are you prepared to work for it?

If your answer to the first question is “yes”, you should seriously consider your response to the second question. Fixing your credit score is nothing like taking coffee from a dispensing machine. It involves hard work and adaptation of your current spending habits.

To improve your credit score, you must show sound financial behaviour on a consistent basis. Here are some tips for bringing up your credit rating.

Tip #1 – Watch the credit card balances

The amount of credit you are using versus the total credit available to you affects your credit score significantly. The higher the percentage, the worse it is as far as your credit score is concerned.

Optimal percentage is 30 per cent or less.

Tip #2 – Secured vs. unsecured debts

You should have a healthy mix of secured and unsecured debts. If you have only unsecured debts or too many unsecured debts, your credit rating will be affected negatively.

Poor credit score, in turn, can make it difficult for you to take loans from banks and reputable financial institutions. While you can still get a loan if your rating is not good, you will have to pay a higher interest rate as legal money lenders Singapore charge higher interest than banks.

Tip #3 – Don’t apply for multiple loans at the same time

Did you know that every time you submit a loan application, your credit scores dip by a little?

That is why it is imperative that you plan your loan applications wisely to ensure you apply for one loan at a time.

Tip #4 – Don’t take off old debt from the report

Many consumers will frantically try to remove debt from the credit report as soon as they have paid it. Experts say this is a mistake. Negative items spell bad news for your credit rating, and they usually are taken off after 7 years. However, good debt spells good news for your credit score, so you should not remove it from your report.

Tip #5 – Pay bills properly

You can present yourself as someone who practices financial discipline by paying off your bills on time, month after month. This method also improves your credit score. While you can get away by paying just the minimum amount (for the time being only, however), it reflects poorly on your credit report.

Tip #6 – Don’t default

The only thing worse than making late payments is defaulting on a loan. There’s no going back once you do that and the road to recovery after that is a long and hard one. Once you default, banks will not give you a loan for many years. That would mean that you would always have to rely on licensed money lenders in case of a need for financial help.

Tip #7 – Don’t obsess

Don’t be obsessed by your credit rating all the time. Just ensure you pay your bills on time and use your credit cards responsibly.