When it comes to financial literacy, education is key. You don’t have to be bankrupt or in debt to seek financial help; in fact, with the rising costs of living, now is a good time to educate yourself on how to make informed decisions for your future. 

One way to do so is through credit counselling. 

Credit counselling can be done by a professional counsellor or an agency that specialises in debt settlement. Between the two, the latter usually has more experience and can provide better solutions especially for individuals in debt. 

Enter Credit Counselling Singapore, a non-profit organisation in Singapore that helps individuals struggling with debt problems.

In this guide, we’ll explain what services Credit Counselling Singapore actually offer, signs that you may require credit counselling, and if credit counselling has any impact on your credit score.  

What Does a Credit Counsellor Do?

Credit counselling is not about whether you should borrow money but about the best way to manage your debt and stay on top of your finances. It is a form of debt management that helps people with debt and ultimately build their financial health. 

In that vein, a credit counsellor’s role is to: 

• Identify your current financial situation, including the amount of debt you have
• Educate and provide assistance on how to settle unpaid debts 
• Provide information about your credit report and how it affects your ability to get loans, sign for insurance or rent an apartment in Singapore 
• Advise you on how to improve your score so you can qualify for better loan terms, insurance policies or rentals
• Develop solutions that work for you, including debt consolidation loans, loan modification plans or bankruptcy relief programs 
• Improve your credit rating and avoid future problems with lenders
• Negotiate with creditors for a lower payment amount or a longer repayment period

All in all, a credit counselor aims to help you make educated decisions to achieve good financial health. 

What Is the Role of Credit Counselling Singapore (CCS)?

Credit Counselling Singapore (CCS) helps you understand how your credit situation affects your life, make informed decisions about borrowing money and managing your debts, and help build a stronger credit history. 

You will meet with a certified credit counselor to discuss your situation and determine if you qualify for CCS Singapore’s services, including their Debt Management Programme (DMP) and recently-introduced Bankruptcy Rehabilitation Programme (BRP).

CCS charges a one-time fee of $30. 

What Are the Services Offered by Credit Counselling Singapore?

Credit Counselling Singapore (CSS) helps Singaporeans manage their debts effectively through debt management, financial literacy, and credit counseling programmes.

The Credit Counselling Service offers;

• Debt management information to help you understand your debts and options with creditors.
• Counseling services for individuals experiencing problems with their personal and business finances due to debt problems, family breakdown, or other personal issues.
• Technical assistance for people with difficulty repaying their debts or applying for credit cards due to insufficient funds.’
• Debt repayment arrangements for unsecured debt
• Debt advice and counseling for individuals seeking help from banks and other financial institutions on managing their debts effectively.

Assistance With Unsecured Debt Problems 

Financial Counseling 

Financial Education Programmes

Mental Health for Seniors 

What Is the Credit Counselling Process Like?

The credit counseling process by CSS involves;

• Step 1 – Compulsory introductory talk on basics of debt management lasting 1-1.5 hours 
• Step 2 – Client is given a counseling request form.
• Step 3 – The client fills out the counseling request form and attaches supporting documents like Credit Bureau Report, 15 months’ CPF statements, and 3 months’ pay slips. The supporting documents give the CSS a true picture of the client’s financial situation. 
• Step 4 – CCS contacts the client for an appointment date.
• Step 5 – Counselling session lasting 2 or more hours where you will work one-on-one with a credit counselor. Most people only need one session. Some however might require more sessions depending on their financial situation. 
• Step 6 – Development of a feasible debt management plan. The advisor walks you through your finances, including expenses and incomes, and pending debt, and works with you to develop a feasible debt management plan. CSS doesn’t guarantee qualification for a debt management programme. When the situation is too dire, your only option may be bankruptcy.
• Step 7 – Full repayment of all personal and business debt in a flexible time frame. 

Who Should Consider Credit Counselling?

Credit counselling is best for people who fall in the following categories: 

• You have suffered bankruptcy.
• You are struggling to get credit.
• You have excessive and expensive debt.
• You are overwhelmed with your debts and cannot pay them off on time

With that said, credit counselling services can be used by anyone who wants to resolve their financial problems and get back on their feet again. They are not just for people who have suffered from unfortunate situations like bankruptcy.

Credit counselling is also a great option for those who struggle with credit card debt or spending. Your counsellor can help you negotiate with your creditor on how to reduce or even eliminate the interest you pay on your balance. 

With debt counselling Singapore, you can get your debt under control and start rebuilding your financial life. You may have lost track of your finances due to bankruptcy or simply overspending on unnecessary items that didn’t help improve your financial situation, so this might be the best solution for you.

Does Debt Counselling Affect Your Credit Score? 

Debt counselling in Singapore can help you fix your bad credit and improve your credit score if you have a bad credit history with credit bureaus.

The main goal of credit counselling is to make your debt manageable and improve your credit scores. Credit scores help lenders determine whether you are the right person to borrow money from. If you have bad credit, this will hold back your ability to get a loan or credit card and cause problems obtaining other services such as car insurance or renting an apartment.

Get Your Finances in Order Today

Credit counseling is a structured and confidential process that helps you understand your debt situation, plan for your finances and take action to improve your financial situation. 

Here at Money Kinetics, while we believe personal loans can ease your financial burdens, we always have your best interests at heart. If you are struggling to pay off your debts or have a history of bad credit, you may want to consider credit counselling.