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Building Your Credit Score Early Is Important For Young Working Adults: Here’s How To Maintain A Good Credit Score

Good credit score can help you with your future mortgage loan and maybe even job applications.

This article is contributed by Credit Bureau Singapore.

Credit cards often have negative association with bad credit card debts. However, as a young working adult, having no past credit history or active credit facilities might not necessarily be to your advantage. Obtaining your first credit card will prove useful in building your credit history and maintaining your financial health as your credit worthiness is assessed based on past and current credit activities. Using your credit card responsibly and paying in full every month will help you to build a strong credit history which could put you in good stead when applying for essential credit such as a future car loan or home mortgage.

Your Credit Score Can Affect Your Credit And Job Applications

Having a good credit reputation may affect us in more ways than affecting our ability to apply for future car loans and home mortgage. It could also possibly affect your job applications.

Companies are generally more inclined to hire those who come across as responsible and your credit report is a clear reflection of whether a person has been responsible and diligent in his or her repayment. A low credit score may be correlated with irresponsibility and bad financial management which poses as a red flag to future employers.  Companies are increasingly conducting employment checks on prospective hires to minimise any potential cases of theft and embezzlement.
Unfortunately, not many job seekers are aware that a below average score grade may affect their future job prospects.

Actions You Can Take To Maintain A Good Credit Score (And Common Mistakes That You Should Avoid)

A bad credit score is usually due to consumers not repaying their debts on time, which results in your credit score dropping significantly. Here are some actions you can take to maintain a good credit score.

Pay your bills on time and in full

Always try to pay in full as any outstanding balances will be charged at 24% per annum basis. You may consider repayment via GIRO to ensure payments are not late. Do take note that default records stay on your credit report for 3 years even after full settlement while bankruptcy data is retained for 5 years upon discharge.

Limit the number of credit cards you own

Do cancel unused cards! It is more manageable to keep track of 2 credit cards than 5. And also, do not apply for a few credit facilities in a short span of time – this sends an indication to creditors that you are desperate for credit and are a risky borrower.

Pay down your debts and consider charging less

Creditors prefer to see more breathing room between the amount of debt reported on your credit cards and your total credit limits. The more debt you pay off, the wider that gap, the better your credit score. Also, try not to be tempted by interest-free installment plans as they may accumulate to multiple plans!

Key Factors that will Affect Your Credit Score

Key Contributing Factor Description
Immature Credit History Immature credit history will generally contribute to the credit risk uncertainty
Credit Exposure The level of credit exposure will generally contribute to higher credit risk
Delinquency Presence The presence of the delinquency is generally indicative of higher credit risk
Not Enough Clean History Lack of clean credit history will generally contribute to higher credit risk
Adverse Credit History Adverse credit history is generally indicative of the higher credit risk
Too Many Enquiries The frequency of credit applications may impact the credit risk assessment


In a nutshell, having good credit habits and prudent behaviour far outweighs the negative consequences of having to build or resolve a bad credit rating. Always remember to only spend within your means, track your monthly expenses regularly and apply for loans with the careful consideration that you will be able to repay your debts on time and in full.

It is worthwhile to keep up to date on the details that go into your credit report to monitor your credit health, along with reviewing your report for inaccurate information. You can obtain your personal credit report directly from Credit Bureau Singapore.