4 effective methods for credit management

Credit Management holds quite an importance in a person’s financial dealings. It is something that most people have to take care of to avoid getting into any troubles from the financial point of view. Regardless of how much a person earns, credit management is almost a necessity to ensure that the cash flow remains smooth all the time.

In easier words, credit is the name of borrowing money. It depends on the person’s ability to repay on in time. Banks and financial agencies therefore grant credits to only those who maintain a good credit history and pay their dues on time.

With so much going on in a person’s life, it can sometimes be difficult for a person to maintain a good credit record. One emergency and all your finances could go out of shape. However, there is a way out of this situation.

If you plan your finances and your credit management, you would be able to cater to urgent situations as well as pay your credits and debts on time. The following credit management tips will save you from unnecessary calls and reminders from the debt collection agency.

Organize your Budget

The first step when you plan to apply for credit is to get a good idea of how much you earn and spend throughout a month. Maintaining a budget is a good idea in this regards. Plan out your budget and then see whether you need a credit card or not. It is always good end up with an income surplus every month.

Ensure you Eligibility

In order to apply for credit, you have to be qualified enough. Buy qualification, it means that you should have a clean and good history that says you pay your debts and dues on time. Normally, banks and agencies look for a few things while granting credit.

One should have an income source and some assets if things don’t turn out well. One very important thing to remember is that you should ensure that you can go on without credit because it is always not guaranteed that you will be granted credit.

Types of Loans

Once you have been granted with credit, you have a choice. There are two types of credit loans i.e. secured loans and unsecured loans. Secured loans are based on monthly repayments and installments. Unsecured loans are the ones which depend on the ability of a person to repay. Credit cards are commonly unsecured loans where people can have greater credit limits. As a lender, one should always be mindful of debt collection rights when a debt collector came knocking on your door in order to avoid unnecessary arguments.

Limit your Expenses

Getting hold of a credit card doesn’t mean that you get a free license to spend freely. Keep in mind that you have to repay for your expenses so spend wisely. Try to limit your expenses as much as you can. Stay within your credit card limit. Exceeding the limit causes a drop in your credit score.

5 debt management tips

It is never a great feeling when you are burdened with debt. The thought of having to pay your creditor can sometimes be frightening. If you are one of those who have a debt collector Singapore knocking at the door asking for money you have no idea about, you definitely need help.

This post encircles the key aspect of debt management that will help you understand the mistakes you might be doing while managing your debt. It could be that you are not managing your debts at all. Regardless of what blemishes there may be, you need not to worry.

One of the common reasons why people face a hard time managing debts is that they do not keep a proper check on the cash flow and they are unsure how a debt collection service usually work. Sometimes the debt is borrowed for unnecessary wishes. It just keeps weighing you down.

We have highlighted for you some of the major aspects of debt management that will help you to pay off your debts and save you from embarrassment the next time debt collectors knock at your door.


Keep a Note

There are many tips to make your debt management easier and here is one of them. Whenever there is a new debt that you take up, make sure you note it down in a diary. It helps you to manage your finances so that know how much you have to spend in a certain time. If you do not keep a note of your debts, it is a high probability that you end up with more depression and worries.


Pay the Most You Can

It is always a good practice to pay your debt as quickly as possible. If there comes a time when you can pay more than the minimum, go for it. It also helps your credit score. If you are to pay every month and you can do it in every two weeks, you should definitely go for two weekly payments. Get it off your shoulders as quickly as possible! If you can’t repay it on time, negotiate and work a solution out.


Keep an Eye on DTI

Debt to Income (DTI) ratio is quite vital. Lenders normally check the DTI when they are asked to extend new credit. According to experts, average DTI ratio is 35%. You should try to keep it within this limit.


Make Collective Efforts

The best way to reduce debts is to not borrow too much. It will happen only when you limit your expenses. It has to be a collective effort especially if you are the sole earner for your family. Ask your kids and wife to reduce their expenses. Tell your kids about the negative effects of needless spending.


Make Timely Payments

This is probably the most important aspect of debt management. If you keep up with time, there are lesser chances of you lagging behind. Make sure that your payments are regular and on time. Once you are left behind in this race, it is always going to be an uphill task for you from there on.



So now you know some of the basic aspects of managing your debts. It is no rocket science. All you have to do is use some common sense. It can save you from many troubles.

3 tips to make debt management easier


It is a norm in the society to borrow and lend money when needed. Depending upon the conditions, people may or may not be able to pay their debts on time, in some cases may be never. There are many steps to help you better manage your debts. But whatever the conditions may be, it is important to keep a track of the amount you owe.

You should keep a record of your finances especially debts to save yourself from embarrassment in front of the debt collector in Singapore. We bring to you some simple steps and methods that will help you keep yourself updated with all your financial dealings. Here are a few suggestions!

1.  Make a Self-Assessment

Quite often, when people have to borrow large amounts in form of debt, it doesn’t come from just one source. Therefore, they often end up losing track of who credited how much.

According to finance experts, people face much difficulty in paying debts just because they avoid keeping track of their expenses and debts. Knowing ways on how to pay off your debts simply would be an advantage.

However, experts suggest that debtors in particular should keep record of their credit cards loan, utility bills, mortgage and student bills etc.

Here is a simple way of doing it:

  •  Keep a diary dedicated to your expenses. You can even do it through your smartphones and tabs.
  • Note down the name of your credit the instant you borrow money.
  •  Interest rate (if any) alongside the due date when your debt has to be paid. 
  •  Manage your credit card debts
  • Make calculations for your debt you pay from monthly salary and your annual interest payment.

2.  Seek for the Causes

You should always keep an eye on where your finances normally go. Check whether you are spending on needless things. If you are supporting your family, there are chances you will miss out on tracking your expenses. This ultimately leads you to spending more than needed. So here is what we suggest you can do:

  • Look for opportunities of saving money
  •  Identify the weak points
  • Keep receipts and bills and maintain a spread sheet for your expenses.

3.  Include Valuable Input from Others

Getting a point of view from your family members about debt repayment is always a good option. Regardless of the fact that you support your family or not, a valuable opinion from your family and friends can help you with your debts and expenses.

If you are supporting your family, make it obvious about your saving plan and include them into it. Here is what you can do about your collective family saving:

  • Emphasize on bad effects to kids about overspending.
  • Explain your kids the difference between needs and wants.
  • Do not open your financial details to your kids but encourage them to give suggestions about saving. This will motivate them towards your cause.

A collective saving is always helpful for quicker debt repays.

Implementing these simple but effective techniques can help you save valuable money which will in turn help you manage your debts efficiently. It will help you pay your debts on time saving you from embarrassment in front of your debt collector.

How Credit Management Policy Facilitates Sellers

Credit management means collecting payments from customers as well as controlling the flow of credit. This function has been used by suppliers, manufacturers, whole-sellers, retailers, and banks to keep credit policies under control. Effective credit management means improvement in revenues and decrease in financial risk for the company.

It’s obvious that a good credit management ensures smooth flow of money from debtors to creditor, but should small-scale businesses have such a policy? And does hiring a professional debt collection service helps? This is the point of discussion for this post.

Importance of Credit Management Policy

Make it a rule of thumb that as soon as your employees exceed 10, you have to create a written set of instructions to control them and have a sound credit management policy for your business. It will help define the following:

  • Rules of operation
  • Stages of operation
  • Sales process

Moreover, it will also clarify the responsibilities of each employee according to the business strategy.

You will see the impact right from the point of implementation. It helps reduce conflicts among workers as well as stakeholders of the company. Commercial aspect of business often cares less about the financial position of the buyers. On the other hand, your accountant and financial manager prioritizes risk management and cash flow analysis, and will have concerns over granting credit to customers.

If you have a sound credit management policy, it will help keep these two extremes work in coordination for the betterment of the company. The policy should be flexible enough to incorporate at which point you should look for a professional debt collector singapore agency for receiving dues.

Credit Management Policy and Sales Process

It will also help establish sales process with well-defined stages, of which debt collection and litigation phases are vital.

Smooth Cash Collection

You need to ensure your business does not suffer from late payments. You need to have structured and professionalized cash collection mechanism; otherwise, your risk management strategy will suffer. A sound collection strategy has following benefits:

  • It improves your credibility as a seller
  • It helps improve your cash flow
  • It helps improve commercial relationship with suppliers and clients.

The debt recovery process

Your cash recovery process must be well defined. It is to ensure whatever you do, should be legal and your customers should not turn away from you. A strategy needs to be devised regarding phone calls, mails, emails and others. Moreover, the policy should be clear enough for the recovery service to follow. Know the tips and tricks in tracking your debts and how to pay them off simply, and of course legally., and of course legally.

As your sales department is involved in this activity, there needs to be a high level of coordination and understanding between the outsourced company and your sales representatives. The recovery process also specified late payment penalties, so that the customers can adhere and pay in timely manner.


Litigation phase begins when you failed to recover your dues from delinquent customers, even after sending reminders and notices. There are different legal options for the creditor depending the nature of the company and the types of customers:

Different means to recover dues include:

  •   Lawsuits from sellers
  • Debt collection services
  • Bailiffs
  • Credit insurers

3 Steps to Start Managing Your Debts

Debt in Singapore has been on a rise, yet an average person in Singapore has a high potential to repay his debts.

In the beginning of 2014, the household debts were 73.3% of the GDP, but moving towards the end of the year, they reached 75.8% in the third quarter. Although, the credit growth has slowed down compared to the past decade, even then, the household debt in Singapore, in second quarter of 2014, was 230% of the household income.

The real problem starts when people tend to forget the amount owed, and don’t take measures to control outstanding liabilities. Eventually, they find themselves in trouble when debt collector singapore agencies come looking for them.

So, it is vital to keep track of your financial status and credit score. But, what if you’ve already lost the track?

Before you stressed out from all those daily reminders made by your debt collector, follow these steps and prepare yourself to repay.  


1. Assess Yourself

Begin by writing down the following:

  • The amount owed
  • The name of the creditor
  • The rate of interest

Normally, debtors with high sums to repay don’t bother too much about these things. Instead, they tend to shift the debt burden from one creditor to another. In short, they never tally. Debtors need to learn how to proper manage their finance in order to pay off debts as less stressful as possible.

Finance experts say that people try to avoid the problem and this is the reason they don’t tally the numbers. It’s not a good tactic to convince yourself by avoiding the real problem. Check each and everything you owe, including utility bills, consumer debt, car loan, credit card bills, student loan, and mortgage.

Do the calculation as follows:

  • Calculate the debt on credit cards and/or consumer debts
  • Calculate the amount spent annually on interest
  • Calculate the debt you repay out of your monthly salary


2. Identify the Root Cause

If you’re transferring high-interest payments again, before doing it, think about the habits responsible for your current position. It’s crucial to know the root cause of the problem rather than looking for temporary fixes.

Unable to find out where your spending goes? Well, that can happen if you’re the one supporting the entire family. Debt recovery services recommend tracking expenses to identify two things:

  • Your weak points
  • Areas where you can save

Try the old-fashioned way by saving receipts and entering the amount into the spreadsheet.


3. Don’t Do It Alone

There is always room for negotiation to repay your debts on extended time. However, do not do it alone. By including family members regarding your issue may open up your options and receive different views. Including them into saving activity will make your job much easier.  If you let the kids take part, chances are, you get fresh ideas for cutting back and set a nice budget.

It’s not advisable to disclose the details on your kids, but you can help them understand the bad effects of spending more than you can. Besides, your kids should learn the difference between wants and needs. So, tell them you cannot buy certain toy or game, because you cannot afford it. 

3 Benefits of Debt Collection Services for Small Businesses

Small businesses need funds to operate properly, and what other than debt recovery can keep it running. Well, modern-day terms and methods, such as receivable turnover ratios offer a little relief, given that some of your debtors pay quicker, you cannot ignore the pain caused by delinquent debtors and less reliable customers.

Obviously, when you need funds to invest somewhere else, like your new departmental store, you tend to get infuriated over unpaid customers depriving you of your rightful money. And you know how hard it is to recover.

Locating, informing and calling customers takes time, and suing them takes more. What else can you do? Perhaps, you should call a debt collector Singapore agency.

Successful Debt Recovery

Do you know that US collection agencies recover as much as $50 billion annually? That’s efficiency! And more interestingly, customers cannot complaint how they were treated.

Finding experienced service in Singapore is difficult, but this is also important for your prestige. In educated countries like Singapore where customers are more than aware of their rights and duties, using black hat tactics can go against you.

For successful debt collection, agencies always look for reasonable ways to encourage customers repay their dues.

  • Professional collectors may take aggressive but legitimate actions against debtors.
  • They may involve credit bureaus and report unpaid debts, which is absolutely legal.
  • Customers likely to negotiate and repay their dues, because they don’t want to ruin their credit scores.

Legal Protection

It’s a universal statement, “You should fight for your right”, but things are different when it comes to getting back your rightful amount. Customers know they’re protected by the law and can exercise their rights if creditor or his representative intends to cause them any harm. However, as a debt collector, know your debt collection rights in order to protect your agency at the same time. Other than causing harm, also take note of the crimes that a debt collector should never get involved in.  

You cannot use force to recover your debt, but you can always count on expert debt collector who knows better ways. Why?

  • Debt collectors are usually familiar with collection laws and they work for a licensed company.
  • Instead of forcing customers to repay, professional debt collectors use latest software to assess financial position of the intended customer. They’re smart enough to prove that the customers can, by controlling unnecessary expenses, repay your loan.
  • Agencies with well-trained staff legally compel the customer by seizing his property.

All of these efforts require a certain amount of time, and obviously, you’re too busy to pay attention to all the documentation and recovery. So, play safe and let the “good guys” handle the “bad stuff”.


What is the probability of getting the whole sum of money back, if the customer is not in a condition to repay? Will you make it easier for him and allow him to repay in installments? Or will you reduce the amount (say, the actual cost of goods sold)?

It depends how long it’s been. Ideally, you’d prefer to get back the entire sum, plus the expense incurred on recovery (time, interest and other costs). Anyhow, if your debt has become too old – say, a year old, you’ll be happy to recover the cost.

  • An experienced agency can prepare a suitable debt recovery program that’ll favor you and your customers.
  • Alternatively, you can sell those old debts to recovery agencies and reduce your losses. 

Can’t Repay Your Debts On Time? You Should Negotiate and Make Repayment Plans


Being a delinquent debtor is already stressful, but when a debt collector Singapore comes into the scene, that adds up stress and humiliation.

It’s rather unfortunate for the debtors that their creditors have become relentless these days, peppering them with letters, emails and phone calls in an attempt to recover their dues. Unexpected phone calls during work hours, or when you have guest at your home, can make you lose temper. But, this is what debt collection services are paid for, no matter what you feel. Plus, they’re authorized by law to call you on your cell phones, if you have included your cell number on the loan application. See article things that debt collectors shouldn't do

Why Debt Collectors Are Involved

Creditors don’t always receive their debts on time. Sometimes they have to remind their customers, and when they couldn’t get their money back after all their efforts, they tend to hire professional debt recovery services. The reasons for outsourcing may include:
•    Delinquent debtors have not replied their postal mails, emails or phone calls.
•    Delinquent debtors must have changed their contact information, location or credit card
•    Delinquent debtors have shown no interest in repaying their loans.

Debt collector works for, and on behalf of, the original creditor and receives a certain amount or some percentage of recovered debt in exchange. If you have to face a professional, the only way you can escape is, by paying the whole amount or the part of it, or buy ascertaining that you’d pay back your dues before a specific date.

What Options You Have

As the debt becomes delinquent, it may be considered as uncollectable. At this point, debt collectors may offer you to settle your debt once and for all. Your debt will be written off after paying an amount lower than the amount owed. Here, your debt collector is more keen to recover the amount quickly. 
In general, debtors are given two options to settle their dues.

1. Final Settlement for Cash
Final settlement of debt is an ideal way for both, the debtor and the creditor. In this arrangement, your debt will be fully satisfied and your credit score will not be affected. Plus, you don’t have to pay back the whole amount. You make the payment and your creditor writes off the remaining debt as consideration. 

2. Term Settlement
It is similar to final settlement, except for the fact that the amount owed is not reduced. Moreover, you are given a specific time period during which you can make a payment or series of small payments to settle your dues. 

Finally, as a responsible borrower, it is your duty to repay your debts within specified time, and it always affects your credit scores positively. You do have negotiation options in case you don’t have resources to repay your dues, but this doesn’t mean you can always run up to the negotiation phase. Failure to pay your dues could go against you in the long run, plus debt collection services can take legal action against you if negotiation failed.


5 Things Debt Collectors Must Not Do

No business would want to scare his customers away or get negative reviews online.

But at times, businesses do that intentionally or unintentionally when they had to deal with debtors.

What separates good businesses from bad ones is their flawless strategy to recover debt. They may have a separate risk management department calling customers to clear their dues, or rely on debt collector singapore agencies for this purpose.

So, if you hired any such service, make sure it follows the rules and regulations set by the governing body or association. Be careful while choosing any debt collection service because they might end up ruining your brand reputation.

However, you may give a line of action to your debt collector and the debt collection agency and share these 5 things and make sure that your debt collector doesn’t do it.

1. Sending Angry Mob

If you think sending an angry mob to your customers can get you the money, think again. Your debtors have a right to call the police for such unlawful assembly. 5 or more people gathering with an intention to take the money by force or offence is an act of crime in Singapore.

2. Vandalism

It is an act of violence – destroying or damaging a private or public property with or without a motive, and it results in conviction. So, give clear instructions not to use this practice on any of your debtors.

3. Violence

Banging on customers’ doors, shouting, abusing or insulting them, or threatening to beat them, these acts come under violence. Your customers can call the police and later, your debt collector might reveal your name. Therefore, it’s better to choose someone who adopts professional ways to recover the dues.

4. Harassment

If a person causes harassment, distress or alarm to someone by abusing him or using inappropriate vocabulary; or show unacceptable behavior to recover the money owed; all of these acts are illegal. In doing so, there is a higher probability of conviction than getting the money back. Harassment is by no means acceptable irrespective of the cause. So, don’t let them practice it on your customers.

5. Taking Possession of the Things Customers Own

Debt collectors are not allowed to possess or seize the property of the customer without legal notice. So, let the concerned agency know that it must apply in court to get the writ of seizure and sale, before taking possession of the property. Instead of threatening the customer, it is better to send a notice stating the next step, if he fails to repay the amount.

Professional and experienced services understand that there is a great risk in practicing these acts on customers. So, think twice before choosing the right service for debt recovery.

Read about our earlier article on interesting things to know about debt collection.