Youth and The Credit Score

Westernization is developing its roots in India. Like western countries our country's youngsters are slowly moving towards becoming financially independent at a young age too. Also, increasing is the importance of credit transactions in India. Nowadays almost all transactions involve the use of credit cards, unlike the earlier use of cash everywhere. Almost everything can be paid online now with the help of credit cards. So, everyone has a credit card these days. Therefore, it is necessary for young adults to know about credit scores as these credit cards will impact their scores and low credit scores or no credit history may pose a hindrance in getting a loan approved in future. So, it is advisable to start building credit responsibly as early as possible. The basic things for youngsters to know about building credit responsibly.

Credit score & it’s Effects:
First and foremost try to understand what credit score is. Credit score is evaluating the probability of an individual paying back the money he/she borrows.

Your credit score affects a lot of factors in your financial life. Whether it is getting a loan or getting a job. If you are aiming for a job in Finance, almost all companies check your credit report. Your credit report could give you an edge over another applicant who is neck to neck with your job.
In loans, lenders calculate the credit risk from your credit report and then decide whether to give you loan. So the lower the score, the lower your chances of getting a loan.

Get a credit card:
Credit cards can be a good way in getting yourself a credit history. Because no credit history means no credit score. You could start with asking your parents to get yourself authorized in their card; their history will get added to your history or you could also get your own card. Lots of student credit cards are available which have low credit and income requirements.  But keep in mind to use it sparingly. Don’t keep balances and interests pending. By doing all the payments responsibly you are building a history of responsible use and maintaining a good credit score.

Keep checking your credit reports:
Checking your credit reports at regular intervals is a very good habit to instill in young adults. Credit bureaus like CIBIL, Equifax, Experianand  maintain a record of individual’s credit activities and make credit reports. Checking your credit reports will help you in spotting any errors or mistakes in it and getting it fixed. Getting your mistakes fixed may take a few months, but it will be worth the effort in the future when you apply for loans.

Beware of Identity thefts:
If you are offered a credit card and the people in question are asking too much personal information be cautious you can get involved in identity theft. See to it that when you are providing information do it through a secure form online or in front of the company to whom you are providing. Don’t give away information where your information would lie down on a stack on the desk and anybody could access it. Know about the people who you are giving information to, find out whether they are trustworthy or not.

We can help you build your credit score, just visit www.cibilconsultants.com and book an appointment with experts.

Source: Secondary