First-time borrowers are often young adults who are just starting out in their careers.
They tend to have no credit history, which makes it difficult for lenders to assess their financial health and lend to them. However, if people can't borrow, they will not have a chance to build a credit history. So, first-time borrowers often find themselves in a tricky situation.
This situation usually resolves itself when young adults start working because they then have a steady income. This is often viewed positively by lenders when they make lending decisions. A steady income reassures a lender that the borrower can meet his repayments.
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Credit History |
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A credit history is a record of an individual’s past borrowing and repayments,
including information about late payments and bankruptcy.
Having a credit history is important for future borrowing requirements, such as taking on a mortgage or an auto loan. The longer and more established a credit history, the better chance the borrower
has of obtaining a loan.
In Singapore, payment performance data is provided by the banking and finance industry to Credit Bureau (Singapore) Pte Ltd. Data relating to your loan payment performance is collated in your credit file and may be used by lenders as part of the assessment process for any new loans you may apply for, or for a review of your existing loans.
Your CBS file is an indication of your financial health. You should therefore know what's on your credit file and periodically check to see what new data has been uploaded. This can be accessed at the CBS website. |
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Some card issuers have special programmes aimed
specifically at first-time borrowers who are trying to build up their credit histories.
For example, Citibank has the Citi Clear Card for students. Often, these programmes involve cards with low spending limits, but enough for a borrower to build a credit history. |
What is Credit?
