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Rebuild Credit After Bad Debts

Contributed by Credit Bureau Singapore

What leads to bad debts?

Bad debts are incurred when a person loses the financial capability to repay back an outstanding bill or unpaid credit lending over a period of time. This commonly can be seen among people who have poor financial management and often find themselves relying heavily on credit terms to make ends meet.

Does your Credit Report reflect bad debts?

A Credit Report is a reflection of your current financial standing of all your personal credit facilities contributed by members of Credit Bureau Singapore (CBS), including bad debts repayment records and overdue outstanding balances.

Lenders in Singapore use your Credit Report to assess your credit worthiness and determine your future loans repayment behaviour. Such powerful information is crucial and may affect your life, which is why having a good credit score is highly treasured. Let us dive in deeper on how having a good or poor credit report may potentially affect you.

Default records

Default records are severely delinquent payments that arises from unpaid arrears. These are written off outstanding loans that were recorded by the members of CBS in your Credit Report. Default records with the status of Negotiated Settlement or Full Settlement will be displayed for 3 years from status date. For default records with the status of Outstanding, Partial Payment and Sold Off, the records will be displayed indefinitely on the report. The definition of Negotiated Settlement, Full Settlement, Outstanding, Partial Payment and Sold Off statuses are subjected to individual financial institutions’ classification.

Rebuild your credit reputation

If you are still struggling to pay off your outstanding arrears, seek for external help such as debt counselling programs or repayment assistance scheme that will help you to manage your financial obligations better.

However if you have already settled all your outstanding loans and wish to get your credit reputation back on track, here are some steps that you can take below:

1. Spend within your own means

The most important step to repair your credit score is to prevent yourself from falling back into bad debt again, which means to only spend what you can afford. You can broadly categorise your budget into 3 portions – needs, wants and savings. Always be realistic to your financial surroundings and curb overspending on unnecessary items for example: taking public transport rather than owning a car.

2. Wean off on paying on credit terms

The first step to getting out of the debt cycle is to reduce your reliance on using credit facilities to pay for your expenses. You can still use certain credit products example: Credit Cards to earn attractive cash back or points but you should always have sufficient cash to pay off your bills on time and in full.

3. Maintain a good repayment status

Keeping a good and consistent credit repayment record will also help you to gradually build up your credit score. If you are still able to apply for an Unsecured Credit Card or keep your previous credit cards, you can start off by making small payments and pay back your bills promptly and in full. Otherwise, you can consider applying for a Secured Credit Card which usually requires you to pledge a fixed deposit account.

4. Check your Credit Report

It is highly encouraged to review your report from time to time so you are aware of any inaccurate or outdated data that is loaded onto your credit report. Alternatively, you can also subscribe to My Credit Monitor (MCM). MCM is a credit monitoring tool that helps you to keep an eye on your credit report on your behalf so you can have an ease of mind wherever you are. MCM comes with a choice of 6 months or 12 months subscription service and complimentary credit reports. The subscriber will be able to receive notification alerts for any predetermined activities on your credit report, providing the earliest possible indicator via SMS or emails. Hence, you will always be notified should there be any new information loaded onto your credit report.

Lastly, where can I get a copy of my credit report?

To check your credit score, you can purchase a copy of your credit report at You can also view a sample credit report with detailed explanation over at:

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