It is something amazing if for the past several years, you have stayed debt free. But every one of us sooner or later will need to borrow some money to either tide us over or to cover cost of some unexpected expense. If you haven’t had the chance of borrowing money from a licensed money lender singapore review, let me educate you on the basics of applying for a loan. Even in applying for a credit card, there are basic protocols that lending institutions follow before giving you one. The first thing you need know is lenders take very high importance on the credit rating of a borrower. If you’re a first time borrower, you will need to build a credit history in order to get a loan.
What is a Credit Rating?
Credit ratings show whether a borrower is a good or a bad credit risk. Your credit rating tells the lender whether to approve your loan or not; the amount of money he can loan you and the interest rate that he the loan amount can incur. Credit score is generally based on the borrower’s past credit dealings. Credit history will show how well you’ve managed your debt and how many times you have taken credit. If you’re a first time borrower you will have no credit history to speak and there will be no way the lender can decide whether to give you a loan or not. Therefore, in order to borrow money, you need to start building a credit history.
Start Building Your Credit History
The first thing you need to do to create credit history is to open and manage a current account with any banking institution. Put a modest amount on the current account to make sure that the checking account is fully covered. This initial step will be proof of a good relationship between you and the bank. Next, open a debit card account and use this to pay your utility bills and all other expenses. Using debit card will help boost your credit rating especially if you don’t incur late or missed payment on any of your expenses.