Credit Repair – How to remove black marks from your credit report

Find out how credit repair works and whether enlisting a credit repair company will work for you.

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Bad credit is a common concern for many people, especially when applying for credit. Lenders look at your credit report to assess your ability to repay a new loan, so any black marks on it could reduce your chances of getting approved.

If you do have bad credit, there are ways to improve your credit position through credit repair. You can do this yourself or through a credit repair company. Find out what you need to know in this guide.

How to repair your credit report in 3 steps

  • Step 1. Order a copy of your credit report

The first thing to do is to see what is actually on your credit report. You can check your credit report and credit score by purchasing a copy from Credit Bureau Singapore (CBS). A credit report is priced at $6.42 inclusive of GST.

You are also entitled to a free credit report whenever you apply for a credit facility with any CBS members. You can view more details about claiming your free copy here.

  • Step 2. Identify the black marks and defaults

Once you’ve received a copy of your credit report, you can start looking through your history to identify any black marks or defaults.

These “black marks” refers to any information on your credit report that may indicate you have had issues repaying any credit including:

  • Missed payments. Your credit report retains repayment history information from the past two years. This means that any missed payments on your mortgage, personal loans, or credit card accounts during the last two years will show up your credit report, lowering your credit score and hurting your chances of obtaining new credit.
  • Overdue accounts or payment defaults. Overdue amounts of S$200 and above are recorded once they are 29 days overdue and graded according to the promptness of repayment. Defaults (overdue amount more than 90 days) can be extremely damaging to your credit reputation as they indicate that you are unlikely to repay your debts on time and may default on payments altogether. These listings remain on file for three years.
  • Clearouts or serious credit infringements. These are overdue accounts or payment defaults where the credit provider has not been able to contact you. These types of listings indicate that you may default on payment and skip town after that. Clearouts and serious credit infringements stay on your report for five years if they remain unpaid. If paid, these listings only remain on your report for five years and are defined as “payment defaults”.
  • Writs and summons. These listings relate to instances where you have been summoned to court to settle a debt. They stay on record for three years.
  • Court judgments. Court judgements including bankruptcies, personal insolvencies or debt agreements can stay on file for five years or longer, depending on when the case is officially resolved. For instance, bankruptcy goes off record two years from your date of discharge or five years from your date of bankruptcy, whichever is later.
  • Credit enquiries. Applications for any form of credit (including personal loans, mortgages and even utilities) can remain on your credit report for up to five years, regardless of whether they are approved. That’s why it’s important to only apply for credit you have a high chance of being approved for, and to space out your applications over time.
  • Step 3. Remove the black marks and defaults

Credit repair is the process of removing incorrect black marks from your credit file. It applies to black marks that may not belong on your credit history (i.e. errors), as well as listings that have outstayed their rightful duration.

Since the law surrounding credit reporting is complex and, in practice, not stringently enforced, lenders sometimes list defaults or missed payments without proper legal adherence. The first step in all cases is to request that a listing be removed from the credit bureau or credit provider directly. If this fails, you also have the option of enlisting the help of a credit report agency.

Credit repair agencies are experts at spotting these errors and may be more effective at repairing your report than you might be. But these companies can be costly to use, so the following steps will help if you decide to attempt DIY repairs on your credit file.

Important points to consider before calling a credit repair specialist

  • Expenses. Weigh up the costs of enlisting the help of a credit repair agency against the possible value of it. For example, work out how much credit repair will cost and if it’s worth paying that or if you should just wait for the listing to be removed from your report.
  • No guarantees. The agency will investigate your listings but cannot offer any certainty of removing them.
  • Time factor. When looking at your negative listings, also take note of when they will come off your report. Most black marks disappear from your credit report after five years, so in some cases it may be worth waiting it out. If a payment default was listed on your report more than three years ago, it may disappear soon. If you can hold off your loan application for a few more months, you can do away with the whole credit repair hassle.

You can call a credit repair company for a consultation at any time, but remember that credit repair can only remove incorrect or illegitimate listings. There’s no guarantee that credit repair will work for you, and you may ultimately still have to wait for some black marks to naturally expire. But now that you understand how credit history and credit repairs work, you can make an informed decision about these options based on your individual circumstances and goals.

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