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How do I know if a credit company is legitimate?

If you find yourself worried about the legitimacy of a credit company, it’s advisable to take your time to do due diligence to know if it’s legitimate before you involve them. Fraud has risen in almost every business, where you will find scammers or other corny business people.

Most clients lose a lot of money through these scammers who operate in the name of moneylenders. In the money lending sector, you need to be extra careful to know how to determine a legit credit company. The money sharks or unlicensed moneylenders can frustrate you. 

In Singapore, we have numerous unlicensed moneylenders who act legit and are not registered by the government, and their reason for that they are still new to appear on the government database. This kind of response is a trap in which they can convince you to engage with them and fraud you.

There are various ways which you can use to know whether a credit company is legitimate or not:

1.     They Follow The Right Application Process.

 A real licensed moneylender will always require you to provide documents. The licensed moneylenders always want to know your employment status. This helps them determine whether you can pay off a loan or not.

Unlicensed moneylenders normally have a short procedure to follow. The scammers can deceive you by telling you they don’t require your documents such as an ID or residence proof when applying for the loans. However, there is always a hidden agenda or hidden fees they aren’t mentioning.

Many individuals can fall for it since the unlicensed moneylenders know what awaits them in the future. Ultimately, they will get more profits from you.

2.     Advertise Using the Right Channels.

Many unlicensed moneylenders use platforms such as WhatsApp, Facebook, flyers, SMS, and calls to communicate with you. This should be a red flag for you to spot an illegitimate credit company. You need to ask yourself how they got your number or your Facebook account name and privately text or call you.

Legitimate moneylenders don’t text or call you unless you reached out for their services and responded. Some individuals are caught in this trap due to desperation for money and later on regret their actions. In due time, you can get harassed by the loan shark personnel if you fail to pay. Additionally, you can risk getting your property auctioned.

Legitimate moneylenders advertise through mass media, social media, or traditional ways. They don’t contact you through calls, text, or direct mail since it’s against their regulations.

  1. The Lenders Check Your Documents Well Before Giving  A Loan.

Fraudulent moneylenders guarantee every applicant loans even without checking their credit history and score. They use such words like

  • Everyone is approved.
  • No problem if you have bad or good credit.
  • They care less about your history, and you deserve a loan. 

If you see the above statements, run away from those frauds, since they are enticing individuals with a high risk of credit history to join them. As a result, they will default and charge you with high interest and fees.

A legit credit company will look at your credit history and score first before they decide to either give you a loan or not. The thing to note always is to do your due diligence to work with moneylenders who are interested to know your credit score, before knowing your loan status eligibility.

4.     Their Paperwork Is A Bit Complex.

The unlicensed credit company makes the application process easy. They trap people using their fake policies. They have sweet tongues to entice you into getting the loans.

Their contracts are drafted in a such way they miss key elements such as; repayment terms, clients’ rights, legal obligations, and legal measures when you default their loans. To be safe don’t rush to sign the contract, take your time to read and understand the contract and check if the key elements are drafted in it.

5.     The Lender Has a Physical Address.

Licensed moneylenders normally have their physical addresses properly illustrated on their websites.   Most loan sharks don’t normally have a physical address. They will even convince you that it is important for you to go to their physical address.

Due to your money urgency, you will give in and take up a loan. Most legit moneylenders don’t rush you into getting a loan, they allow you to take your time. 

6.     They Give You Freedom to Make your Decision.

Loan sharks know how to play with your mind. This will make you make wrong decisions while in a confused state. They even go deep to ask you about your bank pin and other personal details that they don’t deserve to know. Always be wise when dealing with a loan fraud company.

You can give out some really sensitive data that they can use against you when you default payment. Thereby, always be careful when taking up a loan. Always trust companies that seem transparent in their transactions. Good money lending companies give you the freedom to make your decisions.


If you happen to need a credit loan from a company, always be careful about where you are going to borrow a loan, not all moneylenders are legit. Whenever you accept a loan, always take your time to go through the loan contract and policies.

 If otherwise, you note the interest rate is higher in the contract I advise you to decline the loan immediately, since you are engaging an illegal credit company. The above explanations show you how to know whether a credit company is legal or illegal.

An example of a legal money lender in Singapore, it’s like SU Credit Company. If you notice any illegal credit companies, report them to the authority for moneylenders in Singapore. 

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