Glossary

Asset Classification (AC) – It is important to note that some banks report DPD as per the Asset Classification norms defined by RBI, which are as follows: 

                         



Actual Payment Amount – Is the amount you have paid to you lender if it is different from the EMI Amount. This may be more or less than the EMI Amount.


Amount Overdue - Indicates the total amount that has been paid to the lender in a timely fashion (includes principal and interest amount)


Cash Limit – Applies to credit cards specifically, It is the amount of cash you are permitted to withdraw from your credit card.


CIBIL – Credit Information Bureau of India Limited


Credit Information Reports (CIRs) - A report on a loan applicant’s willingness and ability to make payments in a timely manner in the past.


Credit Rating (CR) – A judgement of a person’s ability to repay debts. The rating is often based on a person’s current and projected income and past debt payment history. Also called a credit score.


Credit Score – Is a number, between 300 and 900, that reflects a person’s credit history.


Control Number (CN) – This is your report number and is essential if you need to raise a Dispute Requests.


Collateral – Is provided to a lender as security to protect the lender in the event you are unable to repay your loan. This may be property, shares, gold, etc.


Credit Limit – Applies to credit cards and overdraft facilities. It reflects the total amount of credit you have access to with regard that credit card or overdraft facility.


Creditworthiness – The ability of a consumer to receive favourable consideration and approval for the use of credit from an establishment to which they applied.


Current Balance – Is the amount you still owe on a particular c credit card facility. Lender, typically take 30-45 days after your payment is received to update this information with CIBIL.


Dispute – If a consumer believes an item of information on their credit report is inaccurate or incomplete, they may challenge, or dispute the item. CIBIL will investigate and correct or remove any inaccurate information or information that cannot be verified.


DPD (Days Past Due) – DPD or Days Past Due apears in the Account information section of your CIR. The DPD indicates how nary days a payment on that account is late that month. Anything other than ‘000’ or STD is considered negative by a lender.


EMI Amount – Is the EMI (Equated Monthly Instalment) that you pay on the loan.


Enquiry – Enquiries are added to your report when you apply for a loan or credit card and the lender decides to access your CIR. Details such as the name of the loan provider size and type of loan are captured in this section. Please note that the date of the enquiry may differ from your actual application date because the lender may access your CIR a day or more after you have applied.


High Credit – Applies to credit cards and facilities. It reflects the highest amount ever billed (including interest and fees) for that particular credit card or overdraft.


Ownership – This field tells the lender who is responsible for payments on that loan or credit card. There are 4 types of indicators that can appear on your CIR:
1. Single: You are solely responsible for making payments on the accounts.
2. Joint: You and someone else bear joint responsibility to payments on these accounts. this wiIl also reflect on the other individuals CIR.
3. Authorized User: This is used for add-on credit cards that you may have. While this reflects on your CIR, lenders know that you are rot responsible for paying dues on that particular account.
4. Guarantor: A guarantor pledges to repay a loan on behalf of a third party who has taken a loan. Hence, he provides a guarantee to the lender that he will honour the obligation, in case the principal applicant is unable to do so.


Repayment Tenure – Is the term at your loan. This field is to be read with the ‘Payment Frequency’ field in order to accurately understand the term or the loan. For example, 120 at a monthly payment frequency would mean the term of the loan is 10 years.


Sanctioned Amount – This is the loan amount disbusmed is Applies to account types other than credit curds aid overdraft.


Settlement Amount – When an amount owed on a loan account in disputed, the individual and lender settle at some amount in between. lt’s what the lender believes is owed and what the individual believes he should pay. This is the amount the individual has agreed to pay. The rest of the amount (that the lender believes is owed) is written-off by the lender.


Suit-Field / Wilful Default – In case the lender has filed a suit against you, there is specific reporting prescribed by the Reserve Bank of India (RBI). This is as follows:
1. No Suit Filed (or the field will be blank); 2. Suit filed; 3. Wilful Default; 4. Suit filed (Wilful Default)


Written-Off Amount (Principal) – This field reflects the principal unpaid written-off by the lender. It follows that the difference between the total and principal written-off amounts is the interest amount that has been written-off on this account.


Written-Off Amount (Total) – When a loan is written-off there is an interest and principal component. This field reflects the total interest and principal amount written-off.


Written-Off and Settled Status – If this section is populated the lender has either restructured your loan by offering you different terms (extend the loan tenure or reduced the interest rate, etc) Written off this amount, or settled at some amount less than what the lender believes it was owed.
The possible values are as follows:
1. Restructured Loan; 2. Restructured Loan (Govt. Mandated); 3. Written-off (WO); 4. Settled; 5. Post (WO) Settled

Source: Secondary

Avoid home loan rejection this way.

Real estate is the most coveted investment instrument in the country. Buying a home, whether for investment or residential purposes, can take years to materialise and given the prices, few can afford to pay the money upfront. In such situations, buyers inevitably turn to banks for home loans.

Although the norms for approving home loans have eased in the recent past, don't expect it to be a cake-walk. One small mistake can result in you merely dreaming of the house, and never actually owning it. 

We look at factors that can play a crucial role in getting your loan approved or rejected.

                         

BAD OR LOW CREDIT SCORE

You cannot build a house if the foundations are flimsy, right? When it comes to loan approvals, banks use a similar analogy. If you have a low credit score, you will be denied a home loan out rightly even if you fulfill all other conditions. Credit score is considered to be the most important factor by the banks while disbursing a loan. 

Credit score reflects a consumer's behavior towards the financial transactions. In some ways, it is a mirror to his financial habits and underwriters base their decision and develop risk-based pricing based on the credit score.


So, if a person has defaulted or delayed the payment on any kind of loan or credit cards, it will have a negative impact on the credit score. Other factors like being guarantor to a person who defaults on payment of his loan can affect your credit report too if you fail to repay his loan. So, be very sure before taking up the role of a guarantor. There are credit rating agencies like CIBIL, Experian Credit Information Corporation of India, Equifax Credit Information Services and High Mark Credit Information Services that provide credit score to individuals. Once you submit your loan application, the lender seeks a copy of your credit report from the bureau. They analyse this not only for the credit score, but also to review the extent of existing loans / credit cards, performance of ongoing and closed loans. All these go in to the final assessment of your loan application.

A credit score provided by CIBIL is a three-digit TransUnion score which is derived from the credit history found in credit information report (CIR). A CIR is an individual's credit payment history across loan types and credit institutions over a period of time. It ranges between 300 and 900. It indicates the probability of default of a borrower based on their credit history.

To maintain a healthy credit score, one should ensure timely dues payment and avoid taking too many unsecured loans as it may be considered negative. But if the damage is already done, you can work towards improving it slowly. 

INCORRECT PERSONAL DETAILS IN CREDIT REPORT

Your credit information report contains your personnel detail, so wrong information can lead to a mismatch between the details on your loan application and credit report and hence lead to your loan rejection. If there is any change in the personal details, you must update your lender so that it is reported to the credit information bureau and is reflected in your credit report. Any individual can get the credit report for a nominal fee from the credit bureaus.

However, it is important to check the report for anomalies like a credit card listed in your report but not owned by you, or a loan on their name which they had never taken. Prospective borrowers can also apply directly to the credit bureau for their credit report for a nominal fee. This allows you to review the facilities listed against your name, seek corrections if you spot any anomalies like a credit card listed in your report which is not yours and to know your bureau score. All bureaus have dispute resolution forms on their websites which aggrieved customers can fill and send with relevant identification documents.

REJECTION OF LOAN BY OTHER BANKS

Some people tend to apply to multiple banks at the same time. However, remember that if your loan is rejected from one bank then it can have an impact on your credit score and hence lead to the loan being rejected by other banks too. It is better to wait for the reply from one bank before applying to another so that you know why your loan is rejected and get the same rectified.

NEW OR UNSTABLE JOB

Since the repayment of loan is of utmost priority to the lender, they would like to ensure that you have timely repayment capabilities when he disburses the loan. In case of salaried person a steady flow of income is determined by the stability of job. Since repayment of home loans is normally sanctioned for 15-20 years, stability of income in future becomes a necessary criterion to be assessed at the time of loan sanction. For example, if the borrower has a contract of employment with just eight months left in it, it is natural for the lender to enquire if the contract has been renewed in the past or whether the borrower holds any professional qualifications which would give comfort that alternate employment would be forthcoming.

It is a similar story when it comes to changing jobs. While it may give the buyer a higher income level, it gives a negative impression to the lender. It is generally advised not to change your job if you are planning to take a home loan in the near future. In fact, the financial strength of the employing company is also considered as one of the factors for the evaluation of the application. People working in a proprietorship company, having less than 50 employees & not having provident fund facility, face issues in getting a home loan.

AGE FACTOR

Age is one of the most important factors considered by the lender while disbursing a loan. Typically, they put a minimum age bracket of 23-24 years and maximum limit of 60-65 years for loan applicants. Assuming a 22-year-old, who has been working for the last three years, applies for a home loan and the qualifying criterion for that lender is a minimum age of 23 years with at least two years of continuous work experience, the lender would in all probability turn down such an application.

APPLYING WITH RELATIVES OTHER THAN SPOUSE/PARENTS

If you want to get a home loan of a higher amount, clubbing the income of your spouse is a good option. But while banks allow clubbing of income of the spouse, father and son, the same does not extend to every family member. Some banks are skeptical of clubbing the income of the siblings because in case of a dispute, the EMI could be delayed. Clubbing the income with any other relative is not allowed. Also, a co applicant can't be a minor.

LOCATION OF THE PROPERTY

Banks also make their decision to disburse loans on the basis of the project's location. Take for instance, Noida Extension, where a number of projects suffered due to lack of clearance and acquisition disputes in 2011. As a result, a number of public sector banks stopped sanctioning fresh loan sanctions in the area, as per news reports. All lenders have limitations with the geographic locations. If the property is beyond such limit, the loan will get declined. The technical valuation of properties in remote locations may also be lesser than the purchase cost; banks do try to cover the risk of funding in an under-developed area on case-to-case basis.


UNSATISFACTORY EVALUATION OF THE PROPERTY

You must ensure that you are buying a house at a price which is close to the market price. This is important because the bank does the valuation of the property itself and will give a loan of upto 80% of the property value after considering other factors like your repayment abilities.

UNCLEAR PROPERTY TITLE
In the event that the property does not have a clear and marketable title, or there are issues connected to the approvals from the relevant authorities, normally banks or home finance companies keep the loan sanction letter valid till the customer finds another property which has clear title and approval. So, before buying a property you must ensure that it is not involved in any dispute.

LACK OF REPAYMENT CAPABILITIES

Banks ascertain your repayment capabilities before disbursing the loan. It depends on the disposable income that is left in your hand after paying off existing EMIs. Banks generally give a loan which amounts to an EMI of upto 50% of the disposable monthly income. So, first assess your repayment capabilities before applying for a loan.

Source: Secondary

How cost of borrowing is related to credit score?

If you want to qualify for the most competitive loan and credit card rates then you need a good credit score. What’s more, you need it to stay that way. 

• How lenders decide whether to lend to you?

Banks and credit card companies use a variety of different information to give you a credit score, which determines whether they will lend to you and at what interest rate.

Credit scoring works by awarding points based on the information:
You provide on your application form ,the lender may already have about you, based on previous accounts you have with them, and on your credit report, which is held by agency called CIBIL.
              

• You’ll also get a better credit score if you:

own your own home and/or have lived at the same address for at least a year ,have a good credit history by repaying other credit agreements on time, for example your credit card, auto loan, gold loan, personal loan , overdraft , Cash credit facility, Consumer loan  or Housing  loan.Have evidence of stability – for example you are employed rather than self-employed, you’ve lived at the same address, worked for the same company and had the same bank account for a long time are not connected financially, through your mortgage or joint bank account, to people with a bad credit score.

• How a poor credit score affects your ability to borrow .............

A poor credit score can mean you’re  rejected with any credit facility or loan or  charged higher interest rates, given a smaller credit limit.

A lenders or banks or NBFC doesn’t have to give you the interest rate they are advertising or that you see in best buy tables on comparison websites.  You may be offered an interest rate that’s higher – this is what’s called your personal APR. 

Source: Secondary

Points to remember about credit ratings.

The world of credit ratings is rife with misinformation and misunderstanding - even some national newspapers have got it wrong on occasion. Much of it's because lenders don't want it understood, and SO CALLED credit repair agents want you to think it works a certain way so they can sell you extra products based on your fear. Here's what you really need to know to debunk the myths...

1. You DON'T have a universal credit rating

There's no such thing as a blacklist. This is a myth. In the INDIA, there's no universal credit rating or score, and there's no blacklist of banned people.

Each lender or banks or NBFCs scores you differently and secretly.

This means just because one bank has rejected you, it doesn't automatically mean others will. Though after a rejection, it's always important to check your credit report before applying again.


Of course, if you've got a poor credit history, or had problems, it can feel like you're blacklisted. Credit scoring is intuitive - would you lend to someone with a history of not repaying?


However, on occasion there are some NBFCs or private firms that specialise in lending to those who have had past problems - though they then charge a whacking rate of interest.


The tools banks use to decide aren't universal either. As well as your credit report , they also look at application information and any past dealings they've had with you, and use the three sources of information to build up a picture of you.
                         
2. Credit scoring is about trying to predict your future behaviour


This is not easy if you've little credit history. When you apply for a product, a 'credit check' is done. In practice, this means lenders pour all the data they have on you into a complicated algorithm. It's an attempt to predict your future behaviour based on what you've done in the past.

While a poor history counts against you, so does having little credit history as it makes predictions less certain.

Imagine you are lending someone money. On the surface, they may appear trustworthy. But if you don't have much information about them, then you probably want to know more, just to be sure.

3. It's as much about 'will you make the lender money' as it is about risk
Many people mail or call to us incensed after rejection of loans or credit card - " I've never missed a payment, why on earth did they reject me?"

This is based on a misunderstanding. Many people think lenders are credit scoring to see if you are a good or bad risk. They're not. They are credit scoring to see if you match up to a wishlist of what makes a profitable customer. Of course, someone who is a bad risk is likely to be scored out as unprofitable by most banks, but risk is not the be all and end all.

Credit card companies may reject you for always repaying cards in full.

You might feel like a dream punter, but for credit card companies you're a nightmare. If they spot this trend, you're likely to be rejected. The most profitable customers are those perpetually in debt, never defaulting, but always meeting the minimum repayment.

Pay off in full every month, don't use your cards enough, or always shift debt to 0% cards, and if they can spot you (it isn't always that easy) some may reject you.

Banks score you based on products they'd like to sell you in the future.

Imagine a bank wants new mortgage customers. That's a costly sell. Instead, it offers a current account paying a high rate of interest on a small amount kept in it. Yet, when you apply, rather than scoring you as a bank account customer, it could actually be scoring to see if you're likely to be a profitable mortgage borrower in the future - you might face rejection if you aren't.

The secretive nature of credit scoring makes this difficult to ever truly know.


4. What banks really know about you?


It's important to be aware of exactly what banks know when you apply, so you can present yourself in the best light. Importantly, it's more than just what's on your credit file.
The application form.
In many ways this is the most important. Here, lenders obtain the crucial details of your pin code, salary, family size, reason for the loan and whether you're a home owner or tenant .
Make sure you fill in the forms carefully. One slight slip, such as a "10,000" salary rather than a "1,00,000" one, can kibosh any application.
Be consistent too, scoring firms filter applications and if there are many inconsistencies - such as changing your job title each time or different phone numbers, it can cause a problem that you may not be told about.
Past dealings you've had with the Bank.

Companies use any data on previous dealings they've had with you to feed into the credit score. This means those with limited credit history may find their own bank more likely to lend to them than others.
Of course, those who've had problems with a bank in the past may find it more difficult to get accepted there too.

CIBIL score with credit report
CIBIL is credit reference agencies compile information, allowing them to send data on any INDIAN individual to prospective banks which are members of the CIBIL. All bankss use alsways cibil credit report when assessing your file. This data comes from existing banks only whihc includes your payment habits with the relevant banks.


5.Your credit score dictates the product and the rate you'll get


In the past couple of years the credit landscape has almost completely shifted towards 'rate for risk'. This means almost every Loan Provider on the market uses your credit score to not only dictate whether they'll provide you with credit, but also what rate you'll get.
The most obvious way this manifests itself is in representative rates on loans. Ofcourse still banks want to business with your with lower score they will charge more rate of interest by taking calculated risk.

Source: Secondary

Credit check; May be required!

When you think of a credit check, chances are your thoughts jump to loan transactions. After all, the point of a credit history is to provide context for your past credit transactions as a way to predict the default risk you pose to a current lender. The reality, though, is that your credit profile is used for other financial transactions.

Just because you aren’t borrowing money, it doesn’t mean that your credit information isn’t being used to make judgments about your level of financial responsibility. Here are five non-loan financial transactions that may require a credit check:

1. Cell phone service

Many carriers want to make sure you’re going to pay your bill as agreed. Others worry about letting you walk out of the store with a phone that will be paid for in the service contract.

Poor credit means that you may be limited in account choices. You may only have access to an account with strict data usage and calling limits if you have a poor score. Additionally, if you want to upgrade your phone later, your carrier might make you pay for the upgraded phone up front, rather than letting you make installment payments.

Some Internet service providers and cable/satellite TV companies also run credit checks before opening accounts for new customers. If you expect to access entertainment in this way, you need to be aware of the possibility that your credit history will be accessed and used to judge you.
                                   

2. Insurance premiums

Many auto insurers review credit scores when setting rates. Poor scores are highly correlated with future claims insurance. You may pay more for car insurance if you have a poor score.

Some states ban insurers from using credit scores to make these decisions, but there is still the chance that you could pay thousands of rupees extra a year on your auto policy as a result of your credit situation. Some homeowners insurance rates are set based, in part, on the results of a credit check.

3. Renting an apartment or a home

Even though you aren’t borrowing when you rent an apartment or a home, the reality is that you are still expected to make regular payments. For some landlords, a poor credit rating could be a red flag that you will be difficult to collect from.

You might also need to get a cosigner for your lease if your situation isn’t up to scratch. In some cases, you will be approved to move into the rental, but you might need to make a larger security deposit. This can be difficult if you are short on ready cash.

4. Applying for a job

Even your ability to earn an income can be impacted by your credit history. Employers aren’t supposed to check your credit score, but that doesn’t mean that some won’t look at your credit report to identify possible risks. This occurs most frequently for jobs where people handle money or other valuable items. Someone with a bad credit report might be considered a risk of embezzlement or bribes. You may lose a good job opportunity if you have poor credit.

5. Finding true love

Finding the right life partner is supposed to be about love and compatibility. It’s supposed to be romantic. However, there are also money components involved with identifying a life partner. Many single people now exchange credit reports and scores before becoming serious in a relationship.

Even if your partner is willing to overlook your past financial indiscretions, he or she might be unwilling to combine finances with you until you get your credit score in shape. Even though marriage doesn’t have to mean that you share a credit profile, many partners are wary that your situation could affect them.

In the end, you need to be aware of the fact that a credit check isn’t just for loan-related financial transactions. Attempts to include other information in credit reports and scores are under way, since utility payments and rental payments can also be indicators of your level of financial responsibility. However, for now your credit profile is still one of the main ways that others — even non-lenders — decide whether or not you are an acceptable risk.

Source: Secondary

Medical debt affect your credit score in these ways!

Even when you have health insurance, medical costs can add up, forcing you to borrow in order to pay your bill. While it would be nice to think that the debt you incur for health care costs won’t ruin your credit, the reality is that, like any debt, can impact your credit score.

Medical debt that appears on your credit report normally hurts your credit score, no matter the reason for how it got there. Medical debt can be reported by the providers, collection agencies, and through public records if the creditor files suit in court.
                             

Medical debt and your credit score

How medical debt impacts your credit score also depends on the scoring model being used to determine your score.  Medical debt that has been sent to collections will have a smaller impact on your score than non-medical collection accounts.

However, Not every lender uses the most current version of credit scoring models. This means that your medical debt might still count against you, depending on how it is reported, and which scoring model and version of that scoring model are used. In general, though, it’s safe to assume that your medical debt is likely to have some impact on your credit score, especially if you have missed payments. Any debt account that isn’t kept up to date will drag on your credit score.

How to reduce the impact of medical debt

“The best way to keep medical debt from dragging down your score is to keep it off your consumer report,” says Haney. In many models, paying off your medical debt can also prevent it from having a big impact on your score. The good news is that medical debt is in a class by itself when it comes to your credit report and your score.

Haney suggests working with your health care provider. The information on your credit report appears there because it has been reported by a creditor or service provider. This means that if you can work out a payment plan with your provider, and you stick to the terms, there is a good chance that it won’t be reported to the credit bureaus. Most providers will not report medical debt when consumers are actively communicating, and making an earnest effort to resolve open claims issues with insurers, and paying down the balance.

Many hospitals and other health care service providers offer payment plans for expensive procedures. Additionally, you can usually find reasonable payment terms if you have a high deductible. The problems come in when you stop making payments as agreed and the provider feels like the account needs to be turned over to a collection agency. Most providers do not have systems to report but collection agencies do.

Also, be aware of the difference between organizing a non-loan payment plan with your provider and the “payment plans” offered as loans through third parties. These types of plans are commonly offered by dentist offices and vision specialists. You are referred to a payment plan, but this plan is actually set up through a third-party and is a special financing arrangement. In some cases, these arrangements are reported as the loans they are, and appear on your credit report. Understand the distinction before you agree to a payment plan.

Paying off your medical debt can also reduce the impact on your credit score. Increasingly, there is pressure for credit scoring models to stop “counting” medical debt — even collection agency medical debt — once it has been discharged. Make an effort to pay off your medical debt, and you can reduce its impact on your credit score.

Watch out for identity theft

Finally, be on the alert for fraudulent medical debt. Medical ID fraud is a growing problem. Someone might use your information to receive health care, and then skip on the bill. This results in medical debt in your name. Check your credit report regularly for these types of fraudulent accounts. If you notice billing for a medical procedure that you didn’t have, follow up and dispute the account. You will likely need to prove to the health care provider that you weren’t the one who received the treatment. This can be difficult to clear up, and it’s even harder the longer the account sits, so make sure to check your credit report regularly for errors and fraud.  Your best defense is to keep on top of the situation, and try to avoid falling behind.
Source: Secondary

Check, Recheck your Credit Score on Daily Basis!

You’ve probably heard that you should check your credit regularly. But why is that advice given? Before you decide that you don’t really need to check your credit report, here are few reasons to take a look on a regular basis:

Prepare for a major purchase or life change

One of the biggest reasons that you should check your credit is in preparation for a major purchase. When you buy a home using a mortgage, the lender wants to verify that you are likely to make your payments. Another major purchase that requires a credit check is a car.

You might even need to prepare your credit ahead of moving into a rental. Many landlords want to see if there are potential red flags that could result in missed payments. Checking your credit ahead of time can be one way to prepare for what’s next.

It also makes sense to prepare for major life changes by checking your credit since there has been a movement toward including non-credit information, like utilities and rent payments, on credit reports. While such measure might be slow in coming, they could still impact you down the road. Pay attention to what is happening with credit reporting in the news so that you know what actions are likely to cause problems.

                               

Identify and fix errors

You don’t want to be one of those whose credit reporting errors costs more money in the long run. Checking your credit report can help you catch mistakes and have them fixed. Credit reporting agencies are required by law to fix mistakes in a “timely” manner. While credit bureaus don’t have to remove negative and accurate information from your profile, they are supposed to update inaccurate information to provide a better picture of your behavior.

Check your credit report regularly and dispute inaccurate information. This should be done before you apply for credit so that you can avoid a nasty surprise while you’re sitting with the loan officer.

Look for signs of identity fraud

Monitor your credit report for fraudulent accounts, which could be a clue that someone is using your name to open new lines of credit. You should also backup your efforts by checking your monthly account statements and checking your online banking for indications that your credit card numbers are being used to make fraudulent purchases.

By checking your credit report regularly, you can catch identity theft early and take steps to head off further problems. The longer identity fraud goes on, the harder it can be to reverse the impacts and avoid future issues.

Better understand your financial situation

Your credit report can also provide you with clues about your current financial situation.  This can help you make better decisions about your finances moving forward so that you have the ability to improve your credit situation.

Checking your credit report can also help you understand how those in the financial industry view you. Try looking at your credit report as if you were a lender trying to decide whether or not you are a good risk. Understanding your credit report from that standpoint can provide you with ideas for an action plan to look better for financial industry decision makers.

When to check your credit?

The good news is that you can check your credit anytime, and it won’t impact your credit score or the information on your credit report. You are entitled to a free credit report every year from each of the three major credit bureaus.  These resources can provide you with the ability to get a general idea of what to expect when you apply for credit, as well as stay on top of your situation. In some cases, consumer credit sites can also alert you to actions you can take to improve your situation and even save money.

While checking your credit report regularly won’t guarantee that you won’t have problems, the reality is that it is a good way to monitor your situation. At the very least, you can prepare for the most important purchases you plan to make ahead of time.

Source: Secondary