Apprehend your Credit History

Credit history is an individual’s or company’s records of his past borrowings, repayments, other payments and bankruptcy. It is basically all the past records of your credit life. Credit History plays a very important role in building up your credit score and that is why it is important to understand your credit history.

All the factors affecting the CIBIL score are somehow or the other related to your credit history. Having a good mix of credit in your credit history forms 10% of your credit score.  You should’ve taken a good mix of unsecured and secured loans including home loans, auto loans, personal loans etc. to score higher in your credit report. Not only taking loans but servicing them in time also affects your credit score. You should have timely made payments as part of your credit history so as to get a good score.

The other factor which gets affected by your credit history is the length of your credit accounts.  The longer your credit history, the better your credit score. That is why it is recommended by most people not to close old credit card accounts which have been going on for a long time, as it brings down the average length of your credit history. 

But also be aware that defaulting on your payments and bankruptcy stays on your credit history for a long time too and negatively affects your credit score. Therefore, making timely repayments and servicing your debts responsibly for a long time is the way to a good credit history which in turn is the way to maintain a credit healthy life and a good credit score!

Learn about credit score and apprehend your credit history by just booking an appointment at www.cibilconsultants.com

Source: Secondary

Loan application rejected? now what ?

Have you ever applied for an auto loan, a home loan or a personal loan? What if the loan application got rejected? What to do next? Rejection of any kind is one of the greatest fears that lie within us. But there is also a way to address this. Put on your thinking cap to understand what you should do next when your loan application gets rejected.

Know and understand: Check with the credit institution to know the reason for the rejection. Try and understand the reason. According to the Reserve Bank of India, "A bank cannot reject your loan application without furnishing valid reason(s) for the same."

Has the rejection happened due to a low credit score? Does it point to poor payment history? Are those reasons reflecting in your credit history? It's time to check your credit report to know the specific reason or if there is any other reason behind it.

Recheck your credit score: A low credit score could be one of the reasons why the credit institution rejected the loan application. There are several credit scoring models that different credit institutions follow - it could be its in-house scoring model or a credit score obtained from a credit bureau. It is advisable to check your credit score with one of the credit bureaus in the country to know how credit healthy you are.

Do an error check: A credit report contains your demographic details, credit account details and payment history. Do a check whether there are errors on your credit report related to your personal details or account details. If you find some information that is not related to you, it needs to be rectified and updated by the respective credit institution and then at the credit bureau.

Seek help: Do you need help to understand your credit report? Do you find it difficult to read your credit report? Credit counsellors can guide you in understanding and reviewing your credit report. They can also suggest ways to improve your credit score. Seek the guidance of these experts.

Rejections are always a learning experience. So stop worrying and be a little more alert, a little more prudent, a little more assertive and a little more proactive. Just be disciplined and a window will open again.

Check your credit score and repair it with service packages available at www.cibilconsultants.com

Courtesy: Business Insider

Source: Secondary

Misuse of Loan Documents affect your Credit Rating

We keep submitting our KYC documents such as Identity and Address proof (PAN Card, Aadhar Card, Passport, etc) for various purposes.

We apply for various loans for example housing loans, auto loans, consumer loans, etc. Even for buying a new sim card we need to provide our KYC documents. Not only documents, they accept those documents that are self attested i.e. signature on those documents.

With documents submitted for different reasons, there can be incidents where your documents could be misused. It can be used to apply for a credit card, home loan, auto loan, and for various financial purposes in your name. This can have a severe consequence on the credit profile as it can be termed as an inquiry in your credit report and greater the number of inquiries in your credit report.

 Misusing of documents can also result into identity theft. Identity theft is when someone uses your identity to apply for credit or loans. This will benefit the person who has applied for credit and can turn into a nightmare for the person whose name is being used.

 So here are some steps that should be taken care off:

• Keep your documents in a safe place, preferably in a cabinet or a lockable drawer.

• If your documents are lost or are misplaced, you should immediately file a police complaint. Also you should approach the concerned authority with a copy of police complaint filed by you.

• While submitting documents, you should write the purpose for which the documents have been submitted on that document.

• Digitizing documents is one of the best solutions to protect the risk of losing your documents.

• Checking your credit report timely will help you to identify the inquiries that an individual has not made and can take appropriate steps to rectify the same.

Don't let anybody harm your credit rating by using your loan documents secretly.
Check your credit report at www.cibilconsultants.com

Source: Secondary

Debts can destroy your credit score !

There are some differences in how the different types of debts affect your credit score. let us understand how :

Mortgages
Value of your house less than the mortgage value? Your credit score won’t be affected as long as you keep up with the payments. Your credit report won’t have the value of your house listed on the report, so value of your house being lower than the mortgage value won’t be an issue. Excellent credit can be still maintained even if you are financing home with hefty loans, provided that you make payments on time. But if you are having multiple mortgages with pending balances, then they are likely to impact your score.

Auto Loans
Your payment history is more important than the amount you owe on your auto loans. If you have a habit of buying too many cars or have multiple auto loans with pending balances on your CIBIL report then your credit scores can be impacted. But even then your payment history will have more importance than the amount of debt virtually at all times.

Credit cards
These loans are revolving accounts, not like installment accounts. Hence, they are treated differently to some extent from the ones mentioned above. While the number of revolving accounts you have with unpaid balances and the amount you owe are taken into consideration, the available credit you use is the most important factor. The credit score will have a look at your limits and then compare then to your current balances as reported by your lenders. This ratio is known as your 
credit utilization ratio.

To manage your debts and improving your credit score just consult credit specialists at www.cibilconsultants.com

Source: Secondary

How does defaulting affect your CIBIL Score?

A loan default is basically not making the required payments on your loan to the lender. A loan default is associated with a lot of financial problems. Even if you met all the conditions of the default, your credit score will drop and you will find it hard to get another loan in the future.

There can be many reasons why an individual may have done his payments, but when a certain time passes without you making the payment, it becomes a part of your credit history and would be included in determining your credit score. When this default is added to your credit history, it stays there for 7 years thereby affecting your credit score for a long time. Therefore, it is important that your avoid turning your late payments into defaults, to not hurt your credit score.

Default can occur with all types of loan. Default in loans like home loans, auto loans can have the lender take repossession of your home or vehicle. 

Default is not the same as deferment, in deferment the payment is postponed mutually after an agreement with the lender while in default there is no agreement that you will get your payments even in the future. Default indicates to the lender that there is far more and deeper problem in the individual’s finances.

If you cannot avoid a default, you can at least reduce the impact of it. The best way to reduce a default is to contact the creditor as soon as you can. If you are late with only a few payments, you can work out some way with your lender for a payment plan. You can also consider various options for refinancing. If you can before declaring on your default, you could sell your car or house on your own or repay the lender than going to a agent. This saves the lender time and money as it is more cost-effective way.

If your debt problems are much deeper than you thought, contact our credit repairing agency at www.cibilconsultants.com , which can help you restructure your payment plans.

Source: Secondary