Once in our life, we all face financial circumstances!!

The reasons could be anything-either we have to pay for education, buy the first home, or to clear the debts!!

And to get relief from these situations, we prefer to take a personal loan.

But, it is not prevalent that every loan application gets approved!!

So, if you are one of those who have applied for personal loan Singapore, then, and you have faced rejection, then your credit score might be the reason behind this.

The licensed moneylenders go through your credit score and then decide whether to approve your personal loan or not. This implies that if you have a bad credit score history then the chances of getting personal loan lessens.

The reasons for having a bad credit score are not known to all. And, they remain clueless of what to do with the bad credit score. What is worse-many does not know what credit score is.

What is a Credit Score?

The credit score is a statistical value assigned to borrowers, showing their likelihood of repaying debts. This is given by a rating company, which individually and accurately assesses the creditworthiness of the borrower. It is also considered by the lenders to know the risk of the credit applicant. This is dependent on the areas, like, loans or payment history. The licensed money lenders Singapore offers two credit rating systems, namely, DP Credit rating and Credit Bureau Singapore (CBS).

So, if you want to have your credit report, then, you can address either of these rating systems. The finance companies and banks received the customer’s credit report from Credit Bureau Singapore whereas the private loan lenders Singapore receives that from the MLCB. Know below what DP Credit rating and Credit Bureau Singapore (CBS) are. 

The CBS Credit Score is the system which is generally used by the financial institutions. When the users apply for the personal loans from the Singapore money lenders or banks, then, the banks demand the records from Credit Bureau Singapore.

The range of the CBS credit score will be in the range of 1000 to 2000 with 1000 as the worst and 2000 as the best score. The users are presented with the grade according to the score range that slows the chances of loan default.

Score RangeRisk GradeProbability of Default
MinimumMaximum
1911-2000AA0.00%0.27%
1844-1910BB0.27%0.67%
1825-1843CC0.67%0.88%
1813-1824DD0.88%1.03%
1782-1812EE1.03%1.58%
1755-1781FF1.58%2.28%
1724-1754GG2.28%3.46%
1000-1723HH3.46%100.00%

The DP Credit Rating is applicable to the business loan only. Essentially, it is a financial risk model that evaluates the default probability of the business. The business is charged the Probability Default (PD) score according to the scoring for the factors like profitability and growth. The PD score then matches the estimated DP credit rating.

As of now, you know the fundamentals of the credit ratings in Singapore, then, let’s find out how to get the approval of the personal loan with bad credit.

Different Ways to Get your Personal Loan Approved with Bad Credit Score

Collect Personal Information

Before delving into personal loan applications and potential rejections, you need to understand your position from the perspective of a potential lender.

Know the credit reports and credit score

Knowing your credit report and score shows you what the potential moneylender will notice when evaluating your loan application. To find out what your credit score is, you can visit Credit.com.  Do not bother- examining the credit score is not going to affect the credit.  Generally, the credit report cards show the areas that are influencing the credit negatively.

Always remember that the credit score is dependent on the model that you are checking. The moneylenders basically consider the better credit score in the range of 700 and 850.  The general score lies between the range of 620 and 679. And, the bad credit score is typically under 580. Additionally, the lender also needs details on the debt-to-income ratio and annual income. Collect the information on the expenses, employment history and the monthly income.  Checking out these documents assist you to have an idea of what you can afford and accordingly, the process accelerates when you are willing to apply.

Restructure and Consolidate the Current Loans and Debts 

In case you have many debts, like, credit card, small loans from the varied banks and loans from the private loan lenders Singapore and you are in arrears, then consolidate them as soon as possible. The debt consolidation provides you with the opportunity to manage the debt and recover the credit score.  

The best lenders assist you to accomplish the consolidation and restructure by providing the loans according to the capacity to pay. They consolidate the debts in one account and find the minimum monthly payment that you can manage without losing the basic requirements, such as utilities, rent and food. 

Prefer the Smaller Loans


It is tough to get an approval of the larger personal loan in Singapore with the bad credit score. What is best here is that you can choose to apply for the smaller personal loans.

Even though, do not forget to pay off these personal loans at the right time and the exact time. Executing these depicts that you are able to pay off these loans, hence, your credit score improves. In future, you will have more chances of getting approval of the larger personal loan.

But, always remember that you have to carry this out many times to improve the credit score adequately before the moneylender approves you of the larger personal loan Singapore.

Search More Options

You can also search for more options, like, you can find the licensed moneylender to get the best options of getting the personal loan. It is not necessary every time that you have to choose banks to take the personal loan. There are many alternatives, such as licensed moneylenders to have the personal loan Singapore. 

These types of moneylenders offer the flexible bad credit loan Singapore options. In addition, the lenders also provide quick approval to an hour to a day.  Precisely, the moneylenders are the best choice particularly when you require the loan on an immediate basis and you get rejected by the banks for the poor credit score. 

Note: Remember that there are age and income requirements. Generally, the user has to be younger than 60 years old and must earn at least S$30,000 annually. 

Add a Guarantor or Apply for a Joint Loan

The other way of getting your personal loan approved, you can choose the joint loan. In this type of loan, you can collaborate with someone (any family member or spouse) with a better credit score.  It improves the chances of getting the loan approved as the other members behave as a co-applicant with the borrower with less credit score.

The one with the low credit score can consider the guarantor or the co-applicant to get the loan approval.  Including the guarantor or the co-applicant with better credit score and best credit profits lessens the chances of the credit risk for the lenders as the guarantor or the co-applicant to be liable for the loan repayment when default by the primary borrower.

Improve the credit score

If you now know the credit score and what the credit union or banks consider essential for the personal loan, you can have a better idea of where you stand.

It is not essential to have an 850 credit score to acquire a loan, though your score will affect your eligible terms and conditions, like, interest rate and loan amount. Like, the bad credit loans may carry higher interest rates and might be issued at fewer amounts.

If your credit score is not good, you may need to fix it before demanding a loan. There are many ways to improve the bad credit score with paying off debts on time, checking your credit report for errors, questioning any errors you encounter, and checking the number of hard credit queries in the credit history till the score improves.

Every loan application you submit will trigger your credit inquiries, and a series of difficult inquiries will reduce your score. When you choose to begin applying for a loan, carry out the research and do not apply for every loan you encounter.

It takes time to improve your credit score. There is no solution to the problem of bad credit scores. Do your best to begin improving, however, if you are eager to seek a loan, you might not have time to wait for your work to be reflected in your score.

Assure that You Can Payback

The moneylender needs to be assured that you can repay the extended amount in full, including accrued interest. Also, you have to assure that a loan meets your budget. Therefore, the amount they provide usually depends on your capacity to repay. Understanding that you are capable of repaying the loan can give you both the faith to continue your loan application.

Having a co-signer or providing proof of income can make a difference in rejection or approval, according to the lender’s consent rules. The principal is the person who guarantees that the debt will be repaid.

If the borrower defaults to pay, then the creditor asks the cosigner to collect the arrears. Co-signers must have good credit scores and historical records. If you want to get the approval of a loan from co-signers, they may also be required to give creditors with income proof.

Beware of Scams

Several online moneylenders there provide personal loans with the credit check to the users with the bad credit. Even though this option seems ideal, but, you need to be ideal. These types of websites might not be more than the advance free loan scams. As per the Federal Trade Commission, the moneylender does not show any interest in the credit history is a signal of red flag and indicating the fraudulent website.

When you go through these websites, it is better to contact the state’s Department of Banking or Department of Financial Regulation to know if the moneylender has registered to have a business in the state itself. The Better Business Bureau then notifies you that if some customers have filed any sort of complaint about that lender or not.

One of the biggest outcomes of poor reputation is greater vulnerability to scams and other fraudulent acts. Do not forget that each licensed lender needs some proof that you will be able to repay the loan.

The other red flag is whether the lender requires advance payment before you can get the loan. Be cautious and do not provide any delicate information, such as bank account information or social security number, before obtaining the legal documents for the personal loan.

Concluding Remarks

Have you ever researched before applying for the personal loan when you have bad credit. As the personal loan assists you to control all the finances; hence it is essential to know that the loan is not the solution to all financial issues.  With an improvement of your credit score and settlement of the long-term financial goals, you can get the future financial freedom and health.

So, if you need the personal loan Singapore urgently and have a bad credit score, then it is better to approach the licensed moneylender. Give us the chance to help you with all your personal loan needs.

Hopefully, you liked this article.  If there are some queries or suggestions then, let us know in the comment section below.

Thanks for reading!!