1 00:00:02,869 --> 00:00:05,170 Speaker 1: You're listening to AC N A podcast. 2 00:00:07,300 --> 00:00:09,799 Speaker 1: Hey, there, this is Andrea and you're listening to the 3 00:00:09,810 --> 00:00:13,840 Speaker 1: Money Talks podcast. Now, before we dive into today's episode, 4 00:00:13,930 --> 00:00:16,819 Speaker 1: it's a good time for us to address some feedback 5 00:00:16,829 --> 00:00:21,549 Speaker 1: that we've gotten from you on the legacy planning episode. Now, 6 00:00:21,559 --> 00:00:24,500 Speaker 1: before I do that, we just want to say thank 7 00:00:24,510 --> 00:00:28,329 Speaker 1: you for listening to Money Talks because without you subscribing 8 00:00:28,340 --> 00:00:31,840 Speaker 1: and listening to us, we won't have this interaction and 9 00:00:31,850 --> 00:00:35,240 Speaker 1: this means a lot to us. So thank you once again. 10 00:00:35,819 --> 00:00:39,040 Speaker 1: All right. So first point that I wanted to bring 11 00:00:39,049 --> 00:00:43,699 Speaker 1: up and clarify is on how assets are distributed. When 12 00:00:43,709 --> 00:00:47,569 Speaker 1: a minor beneficiary is involved. Let's make it easier with 13 00:00:47,580 --> 00:00:50,689 Speaker 1: a sample scenario. Shall we? Let's imagine we have a 14 00:00:50,700 --> 00:00:54,200 Speaker 1: minor and his name is Ryan. So Ryan's parents have 15 00:00:54,209 --> 00:00:57,720 Speaker 1: passed away and they've left behind a will. Now, the 16 00:00:57,729 --> 00:01:02,319 Speaker 1: will states that Ryan is to inherit everything when he's 17 00:01:02,330 --> 00:01:03,279 Speaker 1: of age. 18 00:01:03,750 --> 00:01:07,449 Speaker 1: Now, the will also mentions three people, a guardian, an 19 00:01:07,459 --> 00:01:11,839 Speaker 1: executor and a trustee. So this is what each of 20 00:01:11,849 --> 00:01:15,379 Speaker 1: them do. Let's start with the guardian. So the guardian 21 00:01:15,389 --> 00:01:19,580 Speaker 1: is someone Ryan's parents have appointed to be responsible for 22 00:01:19,589 --> 00:01:24,089 Speaker 1: him until he comes of legal age. The executor, the 23 00:01:24,099 --> 00:01:29,769 Speaker 1: second person mentioned, manages and distributes the assets as per 24 00:01:29,779 --> 00:01:30,370 Speaker 1: the will. 25 00:01:30,870 --> 00:01:34,000 Speaker 1: The third person is the trustee and that person is 26 00:01:34,010 --> 00:01:38,610 Speaker 1: given the duty of overseeing the assets until Ryan is 27 00:01:38,620 --> 00:01:42,569 Speaker 1: entitled to inherit them. So we went a step further. 28 00:01:42,580 --> 00:01:46,649 Speaker 1: We spoke with Javen Sim, he's from populist law Corporation 29 00:01:46,980 --> 00:01:50,489 Speaker 1: and he says it's possible and actually quite common for 30 00:01:50,500 --> 00:01:54,580 Speaker 1: the same person to wear all three hats, meaning the 31 00:01:54,589 --> 00:01:58,930 Speaker 1: same person can be the guardian, the executor and the trustee. 32 00:01:59,309 --> 00:02:03,139 Speaker 1: But it can also be customized to have two or 33 00:02:03,150 --> 00:02:06,500 Speaker 1: three different people playing these different roles. So it really 34 00:02:06,510 --> 00:02:10,259 Speaker 1: all depends on how Ryan's parents would have wanted it 35 00:02:10,270 --> 00:02:13,619 Speaker 1: or had wanted it in their will. All of this 36 00:02:13,630 --> 00:02:18,579 Speaker 1: is completely separate from how CPF monies are distributed. 37 00:02:19,059 --> 00:02:22,660 Speaker 1: So CPF is obviously a different vehicle altogether, right? If 38 00:02:22,669 --> 00:02:26,440 Speaker 1: no CPF nomination has been made, this is why it's 39 00:02:26,449 --> 00:02:30,119 Speaker 1: important to make your CPF nomination. By the way, what 40 00:02:30,130 --> 00:02:32,138 Speaker 1: happens to the CPF money as well. It's going to 41 00:02:32,149 --> 00:02:36,559 Speaker 1: be handled by the public trustee who will then distribute 42 00:02:36,570 --> 00:02:42,029 Speaker 1: the money according to the intestacy laws or for Muslims 43 00:02:42,038 --> 00:02:44,679 Speaker 1: inheritance certificate in Singapore. 44 00:02:45,160 --> 00:02:48,600 Speaker 1: Ok. So we also got another comment and this one 45 00:02:48,610 --> 00:02:51,500 Speaker 1: was on the grunt of probate. 46 00:02:52,008 --> 00:02:55,728 Speaker 1: So when a person dies and leaves behind a will, 47 00:02:55,820 --> 00:02:59,869 Speaker 1: the executor that's named in the will, must apply for 48 00:02:59,880 --> 00:03:04,139 Speaker 1: a grant of probate to start distributing the assets. Now, 49 00:03:04,149 --> 00:03:07,910 Speaker 1: the time taken to obtain the grant varies. It may 50 00:03:07,919 --> 00:03:11,699 Speaker 1: be as quick as fewer than three months or it 51 00:03:11,710 --> 00:03:15,199 Speaker 1: can be up to a year or more. It really 52 00:03:15,210 --> 00:03:16,820 Speaker 1: all depends on how complex 53 00:03:17,190 --> 00:03:21,169 Speaker 1: the estate is. There could also be issues like family 54 00:03:21,179 --> 00:03:26,250 Speaker 1: members disputing the grant or issues in uncovering the assets 55 00:03:26,389 --> 00:03:30,029 Speaker 1: or issues with the will itself. It really is on 56 00:03:30,038 --> 00:03:33,089 Speaker 1: a case by case basis. So we hope that that 57 00:03:33,100 --> 00:03:36,699 Speaker 1: clarifies this point on the grant of probate. I want 58 00:03:36,710 --> 00:03:40,690 Speaker 1: to thank Peggy Yee from Py Legal LLC for talking 59 00:03:40,699 --> 00:03:41,690 Speaker 1: to us as well. 60 00:03:42,029 --> 00:03:46,240 Speaker 1: And if you have any more messages for us, feel free. 61 00:03:46,250 --> 00:03:49,759 Speaker 1: We love this exchange and this interaction with you. But 62 00:03:49,770 --> 00:03:52,839 Speaker 1: in the meantime, I want to bring you the next episode. So, 63 00:03:52,850 --> 00:03:55,660 Speaker 1: you know, growing up in Singapore, you always have a 64 00:03:55,669 --> 00:03:59,550 Speaker 1: kind of score to achieve, right? It starts with the 65 00:03:59,559 --> 00:04:04,169 Speaker 1: PSLE and then it ends with right now a grading 66 00:04:04,179 --> 00:04:09,119 Speaker 1: at the workplace during your appraisal and that determines how 67 00:04:09,130 --> 00:04:09,880 Speaker 1: well you 68 00:04:09,985 --> 00:04:13,285 Speaker 1: or not so well you performed in your job right? 69 00:04:13,296 --> 00:04:17,126 Speaker 1: Here's another kind of score. You might not have known 70 00:04:17,135 --> 00:04:21,924 Speaker 1: about your financial score. Now, it's called a credit report 71 00:04:22,015 --> 00:04:25,726 Speaker 1: and it gives a sort of health rating on your finances, 72 00:04:25,895 --> 00:04:30,295 Speaker 1: but I bet most of you have no idea what 73 00:04:30,305 --> 00:04:34,455 Speaker 1: your score is, much less used it or referred to it. 74 00:04:34,635 --> 00:04:37,705 Speaker 1: So it is important though in some aspects, 75 00:04:37,951 --> 00:04:40,671 Speaker 1: credit report. So here in the studio to tell us 76 00:04:40,682 --> 00:04:44,641 Speaker 1: why is Wong Sok Kwan, head of Consumer Services at 77 00:04:44,652 --> 00:04:48,082 Speaker 1: Credit Bureau, Singapore. So Kwan, thank you very much for 78 00:04:48,092 --> 00:04:50,891 Speaker 1: joining me. Thank you, Andrea. Ok. So I want to 79 00:04:50,902 --> 00:04:53,342 Speaker 1: start the conversation by putting you on a spot a 80 00:04:53,351 --> 00:04:55,481 Speaker 1: little bit. Ok, I think I know the answer. But 81 00:04:55,492 --> 00:04:57,571 Speaker 1: is your own credit score healthy? 82 00:04:57,582 --> 00:04:58,332 Speaker 2: Definitely 83 00:04:59,182 --> 00:05:01,861 Speaker 1: because as someone who works at the credit Bureau, I 84 00:05:01,872 --> 00:05:04,332 Speaker 1: imagine that's something you have to keep your tabs on. Ok. 85 00:05:04,342 --> 00:05:05,842 Speaker 1: So I'm curious though, 86 00:05:06,049 --> 00:05:08,859 Speaker 1: with the exception of people like you and me, we 87 00:05:08,869 --> 00:05:12,640 Speaker 1: are familiar with what's happening in the financial world and 88 00:05:12,649 --> 00:05:16,709 Speaker 1: our financial health, most people actually don't really know that 89 00:05:16,720 --> 00:05:19,959 Speaker 1: they can get a credit report. Is this your experience 90 00:05:19,970 --> 00:05:20,089 Speaker 1: as 91 00:05:20,100 --> 00:05:20,399 Speaker 1: well? 92 00:05:20,410 --> 00:05:21,829 Speaker 2: Yeah, not everyone know about this. 93 00:05:22,200 --> 00:05:23,950 Speaker 1: So what do you tell them? 94 00:05:23,959 --> 00:05:24,260 Speaker 2: Yeah, 95 00:05:24,613 --> 00:05:27,015 Speaker 2: we will ask them to visit our website at WW 96 00:05:27,024 --> 00:05:29,904 Speaker 2: dot Credit bureau.com dot SG to obtain a copy of 97 00:05:29,915 --> 00:05:32,345 Speaker 2: their report. So even if they do not want a 98 00:05:32,355 --> 00:05:35,015 Speaker 2: copy of report, we also have sample report attached in 99 00:05:35,024 --> 00:05:37,035 Speaker 2: the website so that you can take a look of 100 00:05:37,045 --> 00:05:38,165 Speaker 2: the interpretation. 101 00:05:38,214 --> 00:05:40,214 Speaker 1: So it doesn't, it doesn't have to be if you're 102 00:05:40,225 --> 00:05:42,565 Speaker 1: too afraid for example, to look at your report, 103 00:05:42,859 --> 00:05:44,679 Speaker 1: you can look at the sample one. Ok. So you 104 00:05:44,690 --> 00:05:48,010 Speaker 1: can pay $8 I believe and then get a report. 105 00:05:48,149 --> 00:05:51,488 Speaker 1: I've seen my credit report and I'm still confused. Walk 106 00:05:51,500 --> 00:05:52,839 Speaker 1: me through the grading system, 107 00:05:52,850 --> 00:05:56,100 Speaker 2: there is a numeric score and also there is a 108 00:05:56,109 --> 00:06:00,089 Speaker 2: alphabetical score. It will be from a A to hh 109 00:06:00,140 --> 00:06:02,239 Speaker 2: so a A will be of course the best score, 110 00:06:02,250 --> 00:06:04,599 Speaker 2: of course. Yeah hh will be the higher chance of 111 00:06:04,609 --> 00:06:07,500 Speaker 2: a person will be falling into delinquency. The score will 112 00:06:07,510 --> 00:06:10,519 Speaker 2: be ranging from 1000 to 2000 with 2000 being the 113 00:06:10,529 --> 00:06:11,928 Speaker 2: best score which is the highest credit 114 00:06:12,019 --> 00:06:16,079 Speaker 2: worthiness and also for 1000 being the lowest credit worthiness. Ok, 115 00:06:16,088 --> 00:06:18,019 Speaker 2: so of course it will be good to have a 116 00:06:18,028 --> 00:06:19,308 Speaker 2: a score. Ok, 117 00:06:19,319 --> 00:06:22,419 Speaker 1: a a so that is accompanied by the numerical score. 118 00:06:22,428 --> 00:06:26,239 Speaker 1: Is that correct? Yes. Ah ok. What is this score 119 00:06:26,248 --> 00:06:27,837 Speaker 1: based on the 120 00:06:27,848 --> 00:06:31,628 Speaker 2: score is based on the information in the credit report 121 00:06:31,639 --> 00:06:34,039 Speaker 2: such as the monthly installment you will see that the 122 00:06:34,049 --> 00:06:37,568 Speaker 2: 12 cycle in your credit report, whether you pay full 123 00:06:37,579 --> 00:06:39,709 Speaker 2: payment or not in every month it is a 12 124 00:06:39,738 --> 00:06:40,998 Speaker 2: month it's a 12 month cyc 125 00:06:41,558 --> 00:06:43,747 Speaker 2: so whether is it a full payment? Whether is there 126 00:06:43,757 --> 00:06:45,238 Speaker 2: any missing cycle you did not 127 00:06:45,247 --> 00:06:45,638 Speaker 2: pay? 128 00:06:45,648 --> 00:06:47,377 Speaker 1: Ok, so if you don't pay it is going to 129 00:06:47,388 --> 00:06:48,798 Speaker 1: raise a red flag and it's gonna 130 00:06:50,048 --> 00:06:51,118 Speaker 2: adjust the score a little 131 00:06:51,127 --> 00:06:51,417 Speaker 2: bit. 132 00:06:51,428 --> 00:06:54,847 Speaker 1: Ah ok so this is why you have to pay 133 00:06:54,858 --> 00:06:58,756 Speaker 1: your bills. Our credit reports just tells us how well 134 00:06:58,767 --> 00:07:03,087 Speaker 1: or how badly we are scoring. What essentially are credit 135 00:07:03,097 --> 00:07:05,967 Speaker 1: reports used for? I mean who has access to them 136 00:07:05,976 --> 00:07:06,917 Speaker 1: besides us 137 00:07:06,928 --> 00:07:10,238 Speaker 2: consent for example, if your company is 138 00:07:10,337 --> 00:07:12,557 Speaker 2: doing a credit check on you, you will definitely have 139 00:07:12,566 --> 00:07:15,606 Speaker 2: to sign a consent form before CBS can review the 140 00:07:15,617 --> 00:07:16,217 Speaker 2: report to 141 00:07:16,226 --> 00:07:16,516 Speaker 2: them. 142 00:07:16,527 --> 00:07:20,407 Speaker 1: Ok. So how often does this happen where companies request 143 00:07:20,416 --> 00:07:22,277 Speaker 1: for an individual's credit report? 144 00:07:22,286 --> 00:07:25,187 Speaker 2: Yeah, I think it varies for different organizations. I mean, 145 00:07:25,247 --> 00:07:28,286 Speaker 2: some will do annual checks, some will do quite frequent check. 146 00:07:28,296 --> 00:07:30,236 Speaker 2: It depends on the res appetite, 147 00:07:30,247 --> 00:07:33,516 Speaker 1: right? So this is both for existing employees, 148 00:07:33,527 --> 00:07:36,777 Speaker 2: existing employees and those new onboarding candidates, 149 00:07:36,786 --> 00:07:37,316 Speaker 1: right? 150 00:07:37,326 --> 00:07:39,407 Speaker 1: Ok. When a company does a credit 151 00:07:39,496 --> 00:07:42,465 Speaker 1: check on an individual, be it an existing employee or 152 00:07:42,476 --> 00:07:45,776 Speaker 1: a new employee, is there a limit that they cannot breach? 153 00:07:45,786 --> 00:07:49,985 Speaker 1: For example, someone who scores above an age? But you're 154 00:07:49,996 --> 00:07:53,196 Speaker 1: not an A a either perhaps like ad or an 155 00:07:53,205 --> 00:07:56,715 Speaker 1: F is that something that raises red flags for companies? 156 00:07:56,726 --> 00:08:00,835 Speaker 2: Different banks of different organizations have different risk appetite. So 157 00:08:00,846 --> 00:08:02,545 Speaker 2: it depends on what they are looking 158 00:08:02,555 --> 00:08:02,846 Speaker 2: at. 159 00:08:03,135 --> 00:08:05,536 Speaker 1: Ok. What do they pay attention to normally 160 00:08:05,545 --> 00:08:08,385 Speaker 2: usually is account status history, any aggregated 161 00:08:08,654 --> 00:08:13,274 Speaker 2: outstanding balances and the amount of credit facility that you have. 162 00:08:13,304 --> 00:08:16,135 Speaker 2: Of course, the more credit facility you have there is 163 00:08:16,144 --> 00:08:19,125 Speaker 2: a chance for you to miss payment or forget your payment, 164 00:08:19,174 --> 00:08:22,755 Speaker 2: which would eventually affect your credit behavior. 165 00:08:22,765 --> 00:08:27,375 Speaker 1: Ok. Aside from companies, banks are also able to access 166 00:08:27,385 --> 00:08:30,295 Speaker 1: our credit reports. Is that correct? They still need your 167 00:08:30,304 --> 00:08:31,195 Speaker 1: permission to do that. 168 00:08:31,295 --> 00:08:31,695 Speaker 2: Just 169 00:08:31,704 --> 00:08:33,275 Speaker 2: like when you apply for a credit card, you do 170 00:08:33,284 --> 00:08:36,414 Speaker 2: sign authorization for them to pull your credit report. So 171 00:08:36,424 --> 00:08:37,715 Speaker 2: without any authorization, 172 00:08:37,814 --> 00:08:38,783 Speaker 2: the bank is unable to do 173 00:08:38,794 --> 00:08:39,213 Speaker 2: so. 174 00:08:39,283 --> 00:08:42,583 Speaker 1: Ok. So I've seen my credit report before as I 175 00:08:42,593 --> 00:08:45,364 Speaker 1: mentioned earlier and it's a really technical sheet, right? A 176 00:08:45,374 --> 00:08:47,984 Speaker 1: piece of paper with a lot of courses, a lot 177 00:08:47,994 --> 00:08:51,013 Speaker 1: of digits. So let's talk about how to read a 178 00:08:51,023 --> 00:08:56,083 Speaker 1: credit report. First and foremost, what's the most important data 179 00:08:56,093 --> 00:08:57,794 Speaker 1: point to zoom in on? 180 00:08:57,903 --> 00:08:59,943 Speaker 2: Yeah, so I have a credit report here with me 181 00:08:59,953 --> 00:09:00,414 Speaker 2: right now. 182 00:09:00,653 --> 00:09:02,783 Speaker 1: Ok, a sample, right? So of 183 00:09:02,794 --> 00:09:03,523 Speaker 2: course it's a 184 00:09:03,854 --> 00:09:04,754 Speaker 1: lot of words. Yeah, 185 00:09:04,763 --> 00:09:06,854 Speaker 2: so the first page is just your person 186 00:09:07,083 --> 00:09:11,311 Speaker 2: data personal details. We will focus more on this account 187 00:09:11,322 --> 00:09:13,732 Speaker 2: status history, right? So for the first year, we will 188 00:09:13,742 --> 00:09:16,432 Speaker 2: show the type of credit facility you have such as 189 00:09:16,442 --> 00:09:20,272 Speaker 2: bank loans, credit cards, and unsecured credit. So any mortgages 190 00:09:20,283 --> 00:09:21,913 Speaker 2: loan will also appear in this 191 00:09:21,922 --> 00:09:22,333 Speaker 2: section. 192 00:09:22,343 --> 00:09:25,333 Speaker 1: Yeah, I see H DB loan there as well. Yes. 193 00:09:25,343 --> 00:09:28,913 Speaker 1: So obviously each month that you pay your loans, your 194 00:09:28,922 --> 00:09:31,463 Speaker 1: credit cards, that number is going to change every month, right? 195 00:09:31,473 --> 00:09:33,903 Speaker 1: So what else am I seeing on this credit 196 00:09:33,913 --> 00:09:34,353 Speaker 1: report? 197 00:09:34,362 --> 00:09:36,043 Speaker 2: Yeah, you will see that there is this section 198 00:09:36,142 --> 00:09:39,591 Speaker 2: under previous inquiry, you will see that. Ok. The bank 199 00:09:39,601 --> 00:09:42,851 Speaker 2: is reviewing on you on your existing credit facility or 200 00:09:42,861 --> 00:09:46,322 Speaker 2: if there is any new application. So for this new application, 201 00:09:46,331 --> 00:09:49,080 Speaker 2: we have to take note that we should refrain from 202 00:09:49,252 --> 00:09:52,471 Speaker 2: apply too many new credit facility at a short period 203 00:09:52,481 --> 00:09:52,981 Speaker 2: of time? 204 00:09:52,992 --> 00:09:55,142 Speaker 1: Ok. What do you mean by short? How short 205 00:09:55,151 --> 00:09:57,651 Speaker 2: is short, how short it depends on the risk appetite 206 00:09:57,660 --> 00:10:01,231 Speaker 2: from the bank. So if a person applying, for example, 207 00:10:01,242 --> 00:10:04,432 Speaker 2: can credit facility within one month. So it shows that 208 00:10:04,442 --> 00:10:05,062 Speaker 2: this person 209 00:10:05,351 --> 00:10:08,510 Speaker 2: by a lot of credit within a short period of time, right? Yes. 210 00:10:08,520 --> 00:10:11,120 Speaker 2: So it will more or less affect the credit score 211 00:10:11,130 --> 00:10:14,070 Speaker 2: if you have too many new application in this section. 212 00:10:14,080 --> 00:10:18,160 Speaker 1: Ok, so don't apply for too many credit facilities in 213 00:10:18,171 --> 00:10:20,611 Speaker 1: a short period of time. Ok. What else do you 214 00:10:20,620 --> 00:10:23,709 Speaker 1: think is the most important data point here in the 215 00:10:23,721 --> 00:10:24,080 Speaker 1: credit 216 00:10:24,091 --> 00:10:24,640 Speaker 1: report? 217 00:10:24,651 --> 00:10:28,300 Speaker 2: Yeah, actually all the parts plays a little role in 218 00:10:28,309 --> 00:10:31,500 Speaker 2: achieving the credit score. So there is also a section 219 00:10:31,510 --> 00:10:34,320 Speaker 2: showing aggregated outstanding balance and your monthly install. 220 00:10:35,080 --> 00:10:39,289 Speaker 2: Ok. Yes. So these are the aggregated outstanding balance which 221 00:10:39,299 --> 00:10:42,429 Speaker 2: the lenders can tell. Ok, what is the current total 222 00:10:42,440 --> 00:10:45,049 Speaker 2: outstanding that you have with all the banks and fis? 223 00:10:45,059 --> 00:10:45,640 Speaker 2: Why 224 00:10:45,650 --> 00:10:48,950 Speaker 1: is this important to the people who are viewing this report? 225 00:10:48,960 --> 00:10:51,309 Speaker 1: Is it meant to show that I am paying my 226 00:10:51,320 --> 00:10:52,380 Speaker 1: bills regularly? 227 00:10:52,440 --> 00:10:55,299 Speaker 2: Yeah, so to assess the person credit worthiness, whether did 228 00:10:55,309 --> 00:10:57,530 Speaker 2: they pay on time all the time and whether can 229 00:10:57,539 --> 00:10:59,669 Speaker 2: they afford within their credit limits? 230 00:10:59,679 --> 00:11:02,559 Speaker 1: And obviously we know that paying our bills in full 231 00:11:02,570 --> 00:11:03,510 Speaker 1: is a big benefit 232 00:11:03,609 --> 00:11:06,499 Speaker 1: to us if we don't pay in full and we 233 00:11:06,508 --> 00:11:11,669 Speaker 1: roll that credit. But we are regular payers. That's also ok. Right. 234 00:11:11,679 --> 00:11:13,549 Speaker 2: Yeah, that will be ok but 235 00:11:13,559 --> 00:11:14,669 Speaker 1: not advisable, not 236 00:11:14,679 --> 00:11:17,658 Speaker 2: advisable because this will also be reflected in the account 237 00:11:17,669 --> 00:11:21,108 Speaker 2: status history, full payment or not. So if there is, 238 00:11:21,119 --> 00:11:23,518 Speaker 2: and throughout it means that this person has not been 239 00:11:23,528 --> 00:11:25,429 Speaker 2: paying full every time, right? 240 00:11:25,818 --> 00:11:28,388 Speaker 1: Ok. And that's a pretty big warning as well, right? 241 00:11:28,398 --> 00:11:32,669 Speaker 1: For whoever's reviewing the credit. Ok. So if we have 242 00:11:32,768 --> 00:11:37,168 Speaker 1: have a less than sparkly credit report, right, you will 243 00:11:37,177 --> 00:11:40,228 Speaker 1: find that we are unable to apply for a new loan, 244 00:11:40,237 --> 00:11:43,687 Speaker 1: for example, because our credit reports not looking very good. 245 00:11:43,708 --> 00:11:47,867 Speaker 1: How would you recommend we use our credit report to 246 00:11:47,877 --> 00:11:50,436 Speaker 1: review our own financial habits? 247 00:11:50,447 --> 00:11:50,668 Speaker 2: Of 248 00:11:50,677 --> 00:11:52,687 Speaker 2: course, if we are in debt, we need to try 249 00:11:52,697 --> 00:11:55,897 Speaker 2: to prioritize which are the credit facility that we need 250 00:11:55,908 --> 00:11:58,987 Speaker 2: to pay off first. For example, if credit card is 251 00:11:58,997 --> 00:12:01,708 Speaker 2: the one that imposes more interest rate, we should pay 252 00:12:01,927 --> 00:12:04,497 Speaker 2: the credit card first so that the interest will not 253 00:12:04,506 --> 00:12:07,546 Speaker 2: be rolled over to become snowball amount, which we are 254 00:12:07,557 --> 00:12:10,117 Speaker 2: unable to pay. If the amount becomes snowball and we 255 00:12:10,127 --> 00:12:12,586 Speaker 2: are unable to pay. And the bank loaded a default, 256 00:12:12,596 --> 00:12:15,956 Speaker 2: then it will be reflected in this default section. Ah, 257 00:12:15,966 --> 00:12:18,656 Speaker 1: and the default is a bankruptcy as well or is 258 00:12:18,666 --> 00:12:18,767 Speaker 1: that 259 00:12:18,776 --> 00:12:21,317 Speaker 2: different? Is different? It's just that they are unable to 260 00:12:21,327 --> 00:12:25,036 Speaker 2: pay off the credit facility and they will negotiate with 261 00:12:25,046 --> 00:12:27,387 Speaker 2: the bank to come up with a settlement amount. 262 00:12:27,636 --> 00:12:28,136 Speaker 1: Ok. 263 00:12:28,317 --> 00:12:30,827 Speaker 1: The other thing that I discovered is that 264 00:12:31,085 --> 00:12:34,106 Speaker 1: the fact that I have no credit and that can 265 00:12:34,116 --> 00:12:37,944 Speaker 1: actually be a bad thing. So when you don't have 266 00:12:37,955 --> 00:12:41,755 Speaker 1: enough of credit activity and the credit report gives you 267 00:12:41,765 --> 00:12:45,064 Speaker 1: a grade, is that grade an A a or an hh, 268 00:12:45,075 --> 00:12:47,486 Speaker 2: so it wouldn't be fall into this a A to 269 00:12:47,495 --> 00:12:50,135 Speaker 2: hh range. So it will be classified as a non 270 00:12:50,216 --> 00:12:53,616 Speaker 2: score risk grade which the consumer will be awarded with 271 00:12:53,625 --> 00:12:57,175 Speaker 2: AC X score AC X. Ok. So it defines that 272 00:12:57,184 --> 00:13:00,145 Speaker 2: it has an insufficient credit history to enable 273 00:13:00,244 --> 00:13:03,744 Speaker 2: the credit score to compute a score for this individual. 274 00:13:04,184 --> 00:13:08,784 Speaker 1: Ok. So is this CX grade good or bad? 275 00:13:08,794 --> 00:13:09,044 Speaker 2: It 276 00:13:09,054 --> 00:13:12,265 Speaker 2: depends on the lenders, what they are looking at it 277 00:13:12,275 --> 00:13:15,224 Speaker 2: basically tell the lenders that this person does not have 278 00:13:15,234 --> 00:13:18,164 Speaker 2: a credit profile at all. Yeah, probably a fresh 279 00:13:18,174 --> 00:13:18,574 Speaker 2: grad. 280 00:13:18,585 --> 00:13:21,505 Speaker 1: Ah I see or someone like me who took long 281 00:13:21,515 --> 00:13:23,834 Speaker 1: to pay off a debt and then just didn't have 282 00:13:23,844 --> 00:13:25,164 Speaker 1: any more credit cards after that. 283 00:13:25,174 --> 00:13:29,103 Speaker 2: Right? Bear in mind that if you just rebuild your credit, 284 00:13:29,114 --> 00:13:29,294 Speaker 2: that's 285 00:13:29,403 --> 00:13:31,863 Speaker 2: fast track to it because it takes time to rebuild 286 00:13:31,874 --> 00:13:34,273 Speaker 2: your credit in the credit report. It shows the past 287 00:13:34,283 --> 00:13:36,184 Speaker 2: 12 cycle at a point of time when you retrieve 288 00:13:36,193 --> 00:13:39,054 Speaker 2: a report. So we have to slowly build up the 289 00:13:39,064 --> 00:13:42,443 Speaker 2: credit score and it depends on individual because the credit 290 00:13:42,453 --> 00:13:45,314 Speaker 2: score will look into all parts of the reports, not 291 00:13:45,323 --> 00:13:48,093 Speaker 2: just only on the account status history. It will look 292 00:13:48,104 --> 00:13:49,382 Speaker 2: in the profile as a whole. 293 00:13:49,393 --> 00:13:52,783 Speaker 1: The credit report shows a 12 month cycle. Correct. How 294 00:13:52,794 --> 00:13:56,343 Speaker 1: often does the grade change see if certain time a 295 00:13:56,354 --> 00:13:58,283 Speaker 1: certain duration of time has 296 00:13:58,692 --> 00:13:59,463 Speaker 1: and you've not paid? 297 00:13:59,473 --> 00:14:02,372 Speaker 2: Ok. The score will be only generated if you put 298 00:14:02,381 --> 00:14:04,403 Speaker 2: out your own report at a point of time. When 299 00:14:04,413 --> 00:14:06,023 Speaker 2: you did not put out your report, the bank will 300 00:14:06,033 --> 00:14:08,893 Speaker 2: continue to load the payment cycle and there wouldn't be 301 00:14:08,903 --> 00:14:09,622 Speaker 2: any score, 302 00:14:09,631 --> 00:14:12,703 Speaker 1: right? So if I buy my report in January, it 303 00:14:12,713 --> 00:14:16,043 Speaker 1: gives me that score for that period. It just reflects 304 00:14:16,052 --> 00:14:19,422 Speaker 1: the live score and then later on if and then 305 00:14:19,432 --> 00:14:21,622 Speaker 1: I don't pay by my bills for about two months. 306 00:14:21,632 --> 00:14:25,062 Speaker 1: So by the time April comes around and I download 307 00:14:25,072 --> 00:14:27,622 Speaker 1: my April credit report, then it will 308 00:14:27,721 --> 00:14:28,611 Speaker 1: show a different 309 00:14:28,622 --> 00:14:29,021 Speaker 1: score. 310 00:14:29,031 --> 00:14:32,661 Speaker 2: It may or it may not depends on your credit behavior. 311 00:14:32,671 --> 00:14:35,291 Speaker 2: For example, during that period, did you apply any new 312 00:14:35,302 --> 00:14:38,311 Speaker 2: credit facility applying too many credit facility during a short 313 00:14:38,322 --> 00:14:40,340 Speaker 2: period of time will also impact on the score? 314 00:14:40,351 --> 00:14:40,502 Speaker 1: I 315 00:14:40,512 --> 00:14:43,541 Speaker 1: understand that it takes some years for your sort of 316 00:14:43,552 --> 00:14:46,421 Speaker 1: record to be clean again after you've paid off your debts. 317 00:14:46,432 --> 00:14:49,171 Speaker 1: And you did say rightfully that the Credit Bureau looks 318 00:14:49,182 --> 00:14:51,971 Speaker 1: at how you grow that credit again, right? Which is 319 00:14:51,981 --> 00:14:54,521 Speaker 1: an indicator of financial health. Why does it take so 320 00:14:54,531 --> 00:14:54,981 Speaker 1: long? 321 00:14:54,992 --> 00:14:56,781 Speaker 2: Different consumer have different 322 00:14:56,880 --> 00:15:00,120 Speaker 2: issues of repaying that debt. Probably some miss a few cycles. 323 00:15:00,130 --> 00:15:02,640 Speaker 2: So they take shorter time to rebuild. But for example, 324 00:15:02,651 --> 00:15:04,901 Speaker 2: for some, they have been missing for the past 12 325 00:15:04,911 --> 00:15:07,620 Speaker 2: cycle and did not make payment in full, which explain 326 00:15:07,630 --> 00:15:09,731 Speaker 2: why they need longer time to build up their credit 327 00:15:09,741 --> 00:15:10,260 Speaker 2: profile. 328 00:15:10,270 --> 00:15:13,041 Speaker 1: So maybe answer this question that I have then why 329 00:15:13,051 --> 00:15:15,901 Speaker 1: is it important for us to have some kind of 330 00:15:15,911 --> 00:15:17,820 Speaker 1: credit on our name? Yes. 331 00:15:17,830 --> 00:15:20,080 Speaker 2: So that we can see whether is this person a 332 00:15:20,091 --> 00:15:22,601 Speaker 2: good payment master or not, whether can they pay on 333 00:15:22,611 --> 00:15:25,361 Speaker 2: time every time? And also how good are they in 334 00:15:25,370 --> 00:15:25,911 Speaker 2: managing their 335 00:15:26,039 --> 00:15:26,950 Speaker 2: finances? 336 00:15:27,030 --> 00:15:31,510 Speaker 1: Ok. So how often should we be checking our credit health? 337 00:15:31,520 --> 00:15:34,929 Speaker 1: How often should we be paying this $8 and downloading 338 00:15:34,940 --> 00:15:36,179 Speaker 1: this credit report? 339 00:15:36,190 --> 00:15:38,590 Speaker 2: I feel that you yourself would know that whether you 340 00:15:38,599 --> 00:15:41,409 Speaker 2: have been paying or not. So if you have been paying, 341 00:15:41,419 --> 00:15:44,080 Speaker 2: then your score would definitely be improving. 342 00:15:44,179 --> 00:15:46,989 Speaker 1: Um ok. How often do you check your credit 343 00:15:47,000 --> 00:15:47,380 Speaker 1: report? 344 00:15:47,390 --> 00:15:49,450 Speaker 2: To be honest, I don't do checks on my own 345 00:15:49,460 --> 00:15:49,739 Speaker 2: credit 346 00:15:49,750 --> 00:15:50,340 Speaker 2: report. 347 00:15:50,349 --> 00:15:53,460 Speaker 1: Yeah, because you are very confident of paying your bills 348 00:15:53,469 --> 00:15:54,859 Speaker 1: on time. Yeah. Ok, 349 00:15:55,198 --> 00:15:59,198 Speaker 1: exactly. Is a good time for us to download our 350 00:15:59,208 --> 00:16:03,609 Speaker 1: credit report? I imagine when you're about to spend the 351 00:16:03,619 --> 00:16:06,578 Speaker 1: big bucks right on a house or a car, for example. 352 00:16:06,588 --> 00:16:07,898 Speaker 1: Would that be an example? 353 00:16:07,908 --> 00:16:10,629 Speaker 2: Yes, of course. We will not get the credit report 354 00:16:10,638 --> 00:16:13,559 Speaker 2: until the time that we need it as mentioned earlier on. 355 00:16:13,568 --> 00:16:16,679 Speaker 2: We can actually download the report any time so that 356 00:16:16,689 --> 00:16:19,119 Speaker 2: you can understand your credit health and see how can 357 00:16:19,129 --> 00:16:20,979 Speaker 2: you improve on your credit score. 358 00:16:21,268 --> 00:16:24,249 Speaker 1: And that's before. Yes, you have or when you have 359 00:16:24,357 --> 00:16:29,348 Speaker 1: intention of buying a flat or a house or a car, right? So, 360 00:16:29,357 --> 00:16:33,038 Speaker 1: so Kwan, do you have any final notes about what 361 00:16:33,047 --> 00:16:35,247 Speaker 1: is it about a credit report that we need to know? 362 00:16:35,288 --> 00:16:38,598 Speaker 2: It is important to maintain a good credit score so 363 00:16:38,607 --> 00:16:41,458 Speaker 2: that it won't affect your employment. It won't affect your 364 00:16:41,468 --> 00:16:42,697 Speaker 2: credit application. 365 00:16:42,708 --> 00:16:43,377 Speaker 1: Ok. 366 00:16:43,408 --> 00:16:47,218 Speaker 1: On this podcast, we've been advised by numerous guests, the 367 00:16:47,228 --> 00:16:52,367 Speaker 1: importance of paying your bills, especially high interest credits to 368 00:16:52,377 --> 00:16:53,437 Speaker 1: summarize good credit 369 00:16:53,517 --> 00:16:56,486 Speaker 1: health. Just like our physical health. It is a reflection 370 00:16:56,497 --> 00:17:00,307 Speaker 1: of how well we are in control of our finances. 371 00:17:00,546 --> 00:17:04,616 Speaker 1: It's also a positive signal to creditors and companies that 372 00:17:04,626 --> 00:17:09,016 Speaker 1: you are a reliable trustworthy borrower who always honors your 373 00:17:09,026 --> 00:17:12,015 Speaker 1: debts and that has ripple effects when it comes to 374 00:17:12,026 --> 00:17:15,136 Speaker 1: your jobs and access to loans in the future as well. 375 00:17:15,146 --> 00:17:18,866 Speaker 1: Who doesn't want a clean sheet? Having a good credit 376 00:17:18,876 --> 00:17:22,567 Speaker 1: record actually helps you more than hinders you. 377 00:17:24,670 --> 00:17:28,119 Speaker 1: So, Kwan, we have a segment called Questions from a hat. 378 00:17:28,219 --> 00:17:30,770 Speaker 1: So there are mystery questions in here. None of them difficult. 379 00:17:30,780 --> 00:17:33,270 Speaker 1: Don't worry. This is the fun part of the podcast. 380 00:17:33,420 --> 00:17:36,699 Speaker 1: You'll have to pick a question from this hat. So 381 00:17:36,709 --> 00:17:38,800 Speaker 1: just pick one hand it to me and then I 382 00:17:38,810 --> 00:17:40,530 Speaker 1: will ask you the question. 383 00:17:43,040 --> 00:17:48,099 Speaker 1: All right. So Kwan, what financial advice would you give 384 00:17:48,109 --> 00:17:50,109 Speaker 1: to your 20 year old self? 385 00:17:50,119 --> 00:17:54,040 Speaker 2: 20 year old self? Ok. I think if, when I'm 386 00:17:54,050 --> 00:17:57,630 Speaker 2: 20 years old probably I can apply a credit card. Yeah. 387 00:17:57,640 --> 00:18:00,619 Speaker 2: So at that point of time I would tell myself 388 00:18:00,630 --> 00:18:04,669 Speaker 2: to spend wisely and spend within our own means so 389 00:18:04,680 --> 00:18:07,030 Speaker 2: that my credit score will be good. But of course, 390 00:18:07,040 --> 00:18:08,729 Speaker 2: at that point of time, I wouldn't 391 00:18:09,310 --> 00:18:11,010 Speaker 2: take a copy of my credit report yet. 392 00:18:11,020 --> 00:18:11,379 Speaker 1: Neither 393 00:18:11,390 --> 00:18:13,438 Speaker 1: did I and I probably don't think a lot of 394 00:18:13,449 --> 00:18:15,079 Speaker 1: 20 years out there would do the same. So Kwan, 395 00:18:15,109 --> 00:18:17,319 Speaker 1: it's been a pleasure. Thank you so much for coming 396 00:18:17,329 --> 00:18:20,619 Speaker 1: on the podcast today. Thank you. And hey, listen up, 397 00:18:20,630 --> 00:18:23,349 Speaker 1: we hope there was something in this conversation that was 398 00:18:23,359 --> 00:18:26,329 Speaker 1: useful that taught you something about checking in on your 399 00:18:26,339 --> 00:18:29,889 Speaker 1: financial health. It doesn't hurt to go into triple W 400 00:18:29,900 --> 00:18:33,948 Speaker 1: dot Credit bureau.com dot SG. That's where you can download 401 00:18:33,959 --> 00:18:37,260 Speaker 1: your credit report for just $8. If you have any 402 00:18:37,270 --> 00:18:38,410 Speaker 1: thoughts or questions about 403 00:18:38,505 --> 00:18:41,675 Speaker 1: this episode, please just send us a message. Money Talks 404 00:18:41,685 --> 00:18:45,925 Speaker 1: is available on Apple Podcast, Spotify and youtube music. Don't 405 00:18:45,935 --> 00:18:49,074 Speaker 1: forget to rate us if you're enjoying the podcast. Big 406 00:18:49,084 --> 00:18:53,093 Speaker 1: thanks to the team Christina Robert Tiffany, Ang, Jaini, Johari, 407 00:18:53,104 --> 00:18:56,385 Speaker 1: Joanne Chan and Sa Wind. I'm Andrea Heng. Thank you 408 00:18:56,395 --> 00:18:57,604 Speaker 1: for listening to Money Talks.