Apply personal loan Singapore with bad credit

How to Increase Your Chance of Getting a Personal Loan in Singapore With Bad Credit Score

If you ever needed an emergency financing, you’d wish you had better credit scores. Singaporeans who had messed up their bank loans before can expect themselves to have poor credit scores. While it’s reversible, it takes a great mile of effort to restore your scores. If you’re willing to perform the due diligence the task needs, we’ve listed below everything you need to know about increasing bad credit scores.

It pays to increase your credit scores even if you have other financing channels. In Singapore, everyone knows you can use licensed moneylender personal loans if you have bad credit scores. However, bank financing offers some benefits that licensed moneylenders cannot provide.

What is a Bad Credit Score?

Singaporean banks go through hundreds of thousands of loan applications per day. Therefore, they need a standard allowing them to approve or reject loan applicants. 

With their standards identified, banks established the credit score system, which the Credit Bureau Singapore (CBS) uses. CBS records all the financial activities of borrowers nationwide, which includes historic data, penalties, misgivings, and other remarks by other lenders across the country. Licensed moneylenders are included in the list of credit score evaluators.

Good credit score: A good credit score in Singapore is one that has a figure of 1911 – 2000, which are AA-rank borrowers with a corresponding 0.00-0.27% of defaulting on a loan. 

Low credit score: On the other side of the spectrum, credit scores reaching 1000-1723 are HH-rank borrowers, the lowest in the spectrum with a 3.27-100% chance of defaulting.

You can be sure that anything going below the CC credit score and ranking is highly likely to receive the bank’s increasing scrutiny and caution.

Here’s a credit score reference from CBS for your accurate reference.

Score Range Risk Grade Default  Probability
Minimum Maximum
1911-2000 AA 0.00% 0.27%
1844-1910 BB 0.27% 0.67%
1825-1843 CC 0.67% 0.88%
1813-1824 DD 0.88% 1.03%
1782-1812 EE 1.03% 1.58%
1755-1781 FF 1.58% 2.28%
1724-1754 GG 2.28% 3.46%
1000-1723 HH 3.46% 100%


Factors That Affect Your Credit Score

Truthfully, a single transaction is sufficient enough to affect your credit score. You can think of credit scores as an average reflection of your total credit performance. If you’ve made numerous bad calls, you’re likely to have personal loan Singapore bad credit. 

On the other hand, if you’re sure you paid all your transactions completely but still have a poor score, it might seem suspicious at first. However, because banks and licensed moneylenders performed a “hard” inquiry of your CBS record, your credit score took a hit.

Here are everything that affects your total credit score and grade. Read more about them below.

1. Your Total Pending Payments

Engaging in a single bank loan is the optimal borrower position. However, if you applied and received approval for three more loans, you’re taking on big pending payments. As long as you haven’t paid back your total pending payments, your credit score will remain poor.

Then again, you have all the financing you will need, and to take on additional financing is irrational. Unless you’re earning 3-5 times the minimum monthly income requirement of a loan, it’s counterproductive to take on two more additional financing.

2. Total Number of Revolving Credit

Like pending payments, your revolving credit lines affect your scores the same way, too. Any new credit card or line of credit a bank or licensed moneylender grants to you will negatively impact your credit score. You can think of credit lines as an open-ended personal loan in Singapore. Even if you keep paying them in full, you still have two or more credit lines negatively affecting your credit history.

Once again, the argument of having enough borrowing channels can justify your credit scores because your credit history’s purpose is for the lender to evaluate you using a fast-tracked risk assessment method.

3. The Number of Hard Inquiries You’ve Received

We’ve mentioned this earlier: any time a bank or licensed moneylender pulls a hard inquiry about your bank activities, it will negatively affect your score. Most banks and financial institutions deem credit inquiries as irresponsible if you’re already dealing with two or more financings. A first-time borrower’s credit scores are likely to have less negative impact because they have no other financial products to finish paying.

All your financial activities — including inquiries — have records in the CBS. Therefore, all hard inquiries make up your total credit history using this argument. Remember: your bank or licensed moneylender will inform you that they’re about to make a hard inquiry that can negatively affect your score once you submit your loan application.

4. Any Late Payments You’ve Made/ Continue to Do

If you’re not applying for any financing but you’re making up for penalties and late payments, you’ll highly likely have a bad credit score and virtually zero chances to get a personal loan. Anyone paying for more than two personal loans in Singapore will have bad credit rating automatically because of their increased risk factor.

On the other hand, once you clear up all your debt and repayments, your credit rating will turn to neutral. If you perform well on your next financing, your credit rating is highly likely to improve. 

Increasing Your Credit Score Despite Having Bad Credit

Poor credit history is a dead end for loan applications. However, you can push through your scores by showing banks and financial institutions that you’re financially responsible. Unfortunately, they cannot observe you make budgets and establish your work stability and income. But, the manner that you handle all available financing can remove your bad credit and elevate you to a better (or even best) selection of loans.

Additionally, it doesn’t take much to increase your scores. The first step is to apply for any loan — even unsecured ones — available for your credit rating and proceed with the following steps.

1. Go For a Smaller Loan Amount or Use a Collateral

If you have bad credit, you just have lower financial product selections. Banks and financial institutions do not lock you out of their service (because that will be against Singapore’s laws). Aside from lower loan amounts, you’ll have high interest rates too. However, if you accomplish your financing despite the odds, your lender will positively affect your scores after your loan term.

Truthfully, small loan amounts with a high interest rate are problematic, but banks and financial institutions are willing to evaluate anything valuable that you can use as collateral.

2. Always Pay Your Complete Amount Regularly

Avoid payment penalties by always paying your complete repayment amount. Furthermore, paying on time ensures you’re on schedule. Always remember that the further your loan term extends, the higher your yearly interest rates become. Failing to pay your repayments regularly and extending your loan term can throw off your loan payment calculations and drive you to deep debt.

3. Settle Your First Debt Before Going for Others

It goes without saying that the less payments you have to make, the faster you can accomplish your financing. If you have zero debt, it’s easier for banks to approve your loan application.

Use Debt Consolidation or Counseling Services

Truthfully, debt can be an enormous burden, especially if a medical emergency or sudden unemployment made it impossible to pay on time. Debt consolidation services allows you to put a cap on your existing interest rates, allowing you to start over with a low-interest rate and a repayment term that works for your current income level.

The Differences Between Bank and Licensed Moneylender Borrowing


Traditional financial institutions have higher loan amounts. Consequently, you’ll deal with a higher interest rate and will need a nominal to high credit score to get the best deals.

Licensed Moneylenders

Non-institutional microlenders that the Ministry of Law and Registry of Moneylenders regulate can offer you a wide variety of financial products. You won’t need to have high credit scores using a licensed moneylender’s services.

Can You Apply For Loans With Low Credit Scores?

Yes you can, but you’ll need to jump over a few obstacles, such as the following.

Heavy Collateral Offers

Banks are willing to lower your interest rate or increase your loan amount if you have substantial collateral.

Ensure You Have Stable Income and Employment

Banks and licensed moneylenders will ask for your current income and employment. If you can guarantee you have stable employment and income (which a 3-month payslip — a usual requirement — can prove), you can access a wider range of financial services.

Focus Only On One Licensed Moneylender

Avoid diving deeper into bad credit by submitting your loan application to just one licensed moneylender. Don’t submit your loan applications simultaneously to avoid triggering multiple “hard” inquiries that drill you deeper into bad credit.

However, you can easily make loan inquiries and loan package comparisons through loan comparison sites like Instant Loan.

Everything You Need to Apply For a Moneylender Personal Loan

For licensed moneylenders, you’ll need to submit the following documents. Truthfully, these are the same documents banks and financial institutions will often ask of you.

Required Documents:

Your licensed moneylender will likely ask you for the following:

  • NRIC
  • Billing statements and other proof of residence
  • Employment certificate 
  • Latest 3 months payslip
  • Singpass
  • Work permit/S-Pass/E-Pass (for foreign borrowers)
  • Passport (for foreigners)
  • Bank account statement (for foreigners)


You need to fulfill the following to gain eligibility to use money lender services:

  • Minimum salary of S $1,500 (S $2,000 for foreigners)
  • Above 18 years of age
  • Employed or self-employed

Licensed Moneylenders Give Everyone a Fair Chance at Borrowing Money

If you have bad credit, don’t feel like it’s the end of the road for you. Licensed moneylenders have full regulation and monitoring by the Registry of Moneylenders and the Ministry of Law, giving you recourse for any financial issues.

It’s easy to compare loans from multiple licensed moneylenders by using Instant Loan’s advanced search and quotation algorithms. Visit our website today to learn more about our services.

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