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

Credit card offer for you!

“The credit card business is super-competitive right now,”.  “People are spending again. Banks are lending again. That’s all led to better deals for credit card customers willing to do their homework.”
Rather than getting a credit card from your bank, or accepting the first credit card offer you receive in the mail,  suggests getting out there and actively searching for the best deals for you. “Go online and see what’s out there. There are plenty of deals to be had,” 

How to find the right credit card for you?

Comparing credit card offers isn’t just about looking for certain criteria. The first step is understanding yourself and your needs. “Why do you want the card?” he says. “Are you looking for rewards? Are you trying to rebuild your credit? Do you want a balance transfer?”

The use to which you plan to put the card should be the first consideration when comparing credit card offers. “Knowing what you want from the card is the key to getting the most from your card. “If you never fly anywhere, you probably shouldn’t bother with an airline card.” Start out by comparing cards that meet your needs, and don’t waste your time with cards that don’t fulfill a purpose in your overall financial plan.
Once you know what matters most to you from your card, it’s time to look at other factors. “Pay close attention to the costs associated with the card,”. Some of the costs of credit cards include:

• APR
• Annual fee
• Balance transfer fees
• Foreign transaction fees

These fees vary widely, according, and you should realize what you’re getting into. If you know that you will occasionally carry a balance, the APR is very important. You should also consider how many rewards you are likely to earn in a year from regular purchases you make. An annual fee might not be a big deal if you have the potential to earn higher rewards that aren’t capped. With the right strategy, your rewards can offset your annual fee and still help you come out ahead in rewards than what you would have earned with a card without an annual fee.
If you are getting a card for a balance transfer, one of the considerations is how long the transfer period lasts. A card with a promotional period of 18 months can be of greater benefit to you than a card with a nine-month intro period. If you know you can pay off the balance in 18 months, it isn’t as important that the regular APR is higher on that card if the nine-month card will start charging you interest much earlier.
                      

 Perks that come with a credit card should also be considered. If you are choosing between cards that have similar costs and requirements, turn to the perks to help you make a decisions. “Is there a signup bonus? Does it come with a free credit score? Will the issuer allow you one late payment without charging a fee?” he says. “Are there special perks such as a concierge and travel discounts?”

What to do if you are rejected

Of course, applying for a credit card doesn’t automatically mean that you will be approved. “If you get rejected, there’s no need to panic,”. “You should try to find out why it happened.”
He suggests reading the rejection letter. You can even call the bank for more information. The rejection letter should include information about why you were turned down, whether it was because you don’t have a long enough credit history or whether your credit utilization is too high.  That sometimes the reason given points to a mistake on your credit application or in your credit report. “Fix those problems, and if there are larger issues, commit yourself to putting in the work to build your credit in the coming months.”
Using tools like  can also help you identify cards that you are more likely to qualify for. This provides you with a realistic idea of what to expect.
You might want to apply for another card if you are rejected, but it’s a delicate balance. “Applying for one card after getting rejected for another is fine,”. “Applying for five others is not a good idea. It can hurt your credit, and issuers can view it as desperate.”
The process of applying for a new credit card isn’t just about trying to get something you want. You also need to consider the implications of your move, since your credit will be impacted by your inquiry. If you don’t qualify for the card you want, take the time to evaluate your situation and work toward getting your credit in good shape so you qualify next time. “It’s best to take a more strategic, measured approach to credit card applications.”

Visit: www.cibilconsultants.com
Source: Secondary

Go debt free!

If you get tangled in a debt trap, what should you do? The most obvious advice you will receive is to cut down on your expenses and save up to pay off your debt. You need some quick steps in order to stay pumped enough to get out of debt completely. When you start knocking off the easier debts, you will start to see results and you will start to win in debt reduction.
                           

Forecast debt plan

The principle is to stop everything except minimum payments and focus on one thing at a time. Otherwise, nothing gets accomplished because all your effort is diluted. List your debts in order with the smallest payoff or balance first. Do not be concerned with interest rates or terms unless two debts have similar payoffs, then list the higher interest rate debt first.

Low interest rate

One can low the credit card interest rates by doing a balance transfer. This refers to move your credit card to another bank that might lower the interest rate to get your business. Shop around and try to get the lowest interest rate for the longest duration.

First repay your expensive debt

You should look over the interest rates of every credit card you use to make purchases and sort them from highest to lowest. By paying off the balance with the highest interest first, you increase your payment on the credit card with the highest annual percentage rate while continuing to make the minimum payment on the rest of your credit cards.

Allocate your investments

You may need to do a little reshuffling. Ideally, begin by liquidating any investments, other than insurance products, that are paying you a low tax adjusted rate of return. Then pay off your higher cost debt before lower cost ones. To put it simply, the credit card bills and personal loans must be the first to go. At the same time, you would need to insure that you continue making payments of EMIs on asset loans, used to purchase a home or an automobile, etc.

Negotiate with creditors

Try to explain creditors that you got trapped in bad financial duress and about the hardship the business is going through. Then, ask if they have a plan that may provide better payment terms. If the creditor doesn’t offer one, request a payment plan or a reduced settlement amount.

Visit: www.cibilconsultants.com
Source: Secondary

Can balance transfers hurt your credit score?

Many credit card companies offer free credit card balance transfers in order to entice consumers to choose their service over a competitor. In addition, credit card companies may offer a grace period in which no interest is charged on the outstanding balance. With proper diligence, a savvy consumer can take advantage of these incentives and avoid high interest rates while paying down the principal. But be sure to read the fine print, as many credit transfers involve hidden charges, such as one-time fees on the balance transfer. Undergo various aspects of balance transfers that can either help your credit or hurt it:

• Every time you apply for credit, a hard inquiry is made on your credit report. Each hard inquiry has the potential to lower your score. If you apply for five different cards, you could lower your credit score by several points. To keep the negative effect on your credit at minimum through the application process, do your research and only apply for one card. After transferring a balance to a new card, keep the old account open.
• Depending on the right circumstances, a balance transfer can be a good way to pay down credit card debt. By initially applying for several different cards with low introductory rates, you can negatively affect your credit. A few percent of your credit score is based on the length of time your credit accounts have been open. The longer you have your accounts, the better your score. By opening several new accounts, you bring down the average age of all your credit accounts, thereby hurting your credit.
• Closing a credit account can negatively affect your credit but by keeping existing accounts open, your average account age remains high. If possible, find a card with a credit limit much higher than the amount you need to transfer. Exhausting your credit limit brings your credit utilization ratio down. Finally for maintaining a good credit score, you will have to make payments without missing any deadlines.
• Source: Secondary

Right time to shop for credit cards

There’s no uncertainty that credit cards are extremely portable, ideally, they should be used as a temporary substitute for carrying cash. Often credit cards come with various discounts and additional benefits about which you must be acknowledged. However, when you decide to acquire a credit card, there are abundant elements to be reviewed to obtain the ace advantages for using credit cards.

Credit Limit

This is the amount of money that you are granted to borrow subjected to credit card without involving other costs. Depending on your credit history, the credit limit will be decided. You don’t want a situation in which you’re close to maximizing out your credit limit, as you are likely to attract the over-limit fees. It can hurt your credit score – and some credit card issuers have cut customers’ credit limits to an amount that’s lower than their current balance.

The interest rate

The interest imposed as the annual percentage rate on a credit card. You can opt either for a fixed rate or a variable rate that is bound to another financial symbol, usually the prime rate. With a fixed-rate card, you can predict how much you will be charged as it maintains the same interest every month; a card with a variable rate fluctuate every month. However, even a card with a fixed interest rate can change based on certain parameters, such as paying your card – or any card – late, or going over your limit.

Ease of balance transferring

Almost every credit card company provides the facility of balance transfer. Due to this option availability, you can easily transfer existing debt from one credit card to another as per the usability. The new card credit limit will be lessened subsequently. While transferring the balance, you cannot exceed 80% of the credit limit. The transfer procedure takes more than seven working days.

Fees and other penalties

Go for cards which offer moderate fees. Common charges include fees for transactions, such as balance transfers and cash advances, or for asking to increase your credit limit or paying your bill late. The annual fee varies among card issuers as well as cards depending on the negotiation at the time of purchasing the card.

Incentives

While using the card, one can earn reward points every time as an added benefit to users of credit card. These reward programs does not get expired and you can redeem them anytime as per the convenience. Assuming you’re going to make the purchases anyway – and the card issuer doesn’t charge extra for the rewards program – it can be a good advantage. Opt for a program that offers more elasticity and rewards you will really utilize.

Access to cash withdrawal

The banks gives an ATM PIN to the credit card holder as per to make cash withdrawal from your credit card easily. Keep in mind, doing cash transaction against credit card attracts the high interest rate from the ATM. However, it is suggested to use this facility at time of urgent needs only.

Visit: www.cibilconsultants.com

Source-secondary

Revolving credit and its impact

The tide of the future seems likely to carry with it ever increasing waves of revolving credit in the sea of borrower credit extensions. Already revolving credit represents more than a ripple in that sea. The reasons are primarily economic. Think before you spend – if you don’t pay off your monthly bill, the amount can snowball into a pretty big figure as it revolves and gains interest. Here are snippets on the functioning of revolving credit and how it can make you fall into debt traps.
                 

A loan with a difference

Here, you get credit while you go spending or paying bills. You can use the credit limit to purchase anything you desire. Further, you don’t have to pay EMIs or an amount equivalent to that. All you need to pay, to keep your credit card alive, is a minimum amount, which is normally five per cent of the money spent plus interest. Do that and your loan keeps getting revolved in minimum monthly payment cycles.

Unsecured Credit

While an unsecured revolving line does not require collateral. One of the most common unsecured revolving credit lines is a business credit card. Obtaining a business credit card typically requires the business to have a positive credit history and high credit score but does not require an asset to obtain the credit. Another type of revolving credit for a business is an account with suppliers in which you have a set purchasing limit and the company invoices you for purchases. Once you pay the invoice, the amount is available for you to use again.

Understanding revolving credit account

Revolving credit is a type of credit in which the consumer’s balance and minimum monthly payment can fluctuate, and where the cardholder usually has the option of avoiding finance charges by paying the last statement balance within the established ‘grace period’. This type of credit account also has a predetermined credit limit. Credit cards are the most widely used type of revolving credit. Unlike a loan, a revolving account doesn’t automatically close when the account reaches a zero balance. It tends to remain open and available for use until the lender or the consumer chooses to close it.

How it Works

With revolving credit, a bank allows you to continuously borrow money up to a certain credit limit. Every time you buy something on credit, that amount is subtracted from your total credit limit. And every time you pay off your balance, your credit limit goes back up.

The interest rates on credit cards are much higher than that on other loans. At times they can be twice as much. This makes it impossible to repay the bills in minimum monthly pay-outs. A rough calculation suggests that of the minimum payment made every month; only around 1.5 to 2 per cent goes towards repaying the principal amount. The rest goes towards interest payments. So, keep a check on your credit card spending and avoid revolving your credit card balance.

Impact on your credit score

Maintaining a low revolving credit balance has a significant, positive impact on your credit score because your credit utilization ratio is a key factor in your rating. Revolving credit helps in cases where you need to borrow in unpredictable amounts for ongoing projects, education or other needs. The challenge with revolving credit, though, is the temptation to overspend because you have more credit available. Remember, your credit rating is important when you apply for new loans and want to get a good rate. The reason a low revolving balances are important is the perception of lenders. Typically, they assume that if you use a small portion of your available credit, you are in a safe debt position. This makes you seem like less of a risk if they choose to issue new credit to you. Paying down high balances not only helps your score, it puts you in a better position to manage your debt.

Find your credit score at www.cibilconsultants.com

Source-secondary

Payment of credit card debts through a debt

A question often asked by borrowers is,” Should I avail personal loan or balance transfer to disentangle from credit card debt?” Short-term debt like credit card can be a convenient source of quick funding but can eventually make a deep hole in your pocket. Remember, the interest rates on credit cards are much higher than that on other loans. But weigh all your options and their consequences before you avail a personal loan or low-interest balance transfer as you run the risk of being debt trapped.

Balance transfer versus personal loans

How can one break out of this viscous circle? Either you should ask your bank or credit card issuer to lower the rate or find out whether you can afford to pay off the debt without opening any new credit accounts. Do a little homework to figure out the right option to protect your credit score and save money.

Although both are possible consolidation options for your credit card debt.

Balance transfers are performed by switching one credit balance over to another credit card, usually for a low promotional rate over a limited time period. On the contrary, personal loans are provided by banks and credit unions and can come in secured or unsecured forms. These loans typically have lower interest rates than credit cards, especially if you secure the loan by pledging an asset, such as your car as collateral.

Selecting which option depends on various aspects. For example, how your debt is currently distributed might limit your options. Even though many credit card issuers allow you to transfer over balances from multiple cards into your new card, not all do. On the other hand, a personal loan is probably the cheaper option.

You might be not found it suitable to pledge collateral against a possible secured personal loan. If you default on your credit card debt, it’s unlikely that the card issuer will sue you and comes after your assets. That changes when you open a secured personal loan; the company does take the asset to recoup its loan if you default.

Whether a personal loan or a balance transfer, both categories are likely to negatively impact your credit score, even if you never miss any payments.
Visit: www.cibilconsultants.com
Source Secondary

Coping with closing credit card correctly or not?

Credit cards are the easiest way to fall into a debt trap, i.e. a situation in which you borrow just to maintain your existing borrowings. There could be plenty of reasons to close your credit card: you have many cards, your card issuer increased rate of interest or maybe you don’t want to keep a credit card somehow. Any credit card cancellation must be in accordance with the banks exit policy or else it can come back to haunt the individual for pending dues. Before taking an initiative to close your credit card, find out whether closing that card affect your credit score. Undertake the following steps to close your credit card in the right way.

Pay Off the Balance

The bank will close your credit card only after it is free of any pending balance which is due to the bank. If you can, pay off the balance on the credit card before you close it. This will lessen the impact to your credit score and give you one less credit card balance to worry about. You can close a credit card even if you still have a balance, but your credit score may suffer. And, you’ll still have to make regular monthly payments (at least the minimum) until you’ve paid off the balance. Pay off your pending amount and keep a record of the payments made for future use in case of any dispute.

Communicate with the Customer Service

Once you have decided on which credit card to close first, the first step is to call the concerned customer service and intimate them about your closing card request. Call your credit card’s customer service using the phone number on the back of your credit card and follow up the request using a written communication either directly or through an email. Don’t be surprised if the representative tries to talk you into keeping your account open. For example, they may offer to lower your interest rate or enroll you in a rewards program. If you’re sure you want to close the account, don’t allow yourself to be convinced otherwise.

Check Your Credit Report

Review your credit report to make sure the credit card is reported as closed. This will allow you to keep a check on the extent of damage the credit card cancellation had on your overall credit score. Since credit utilization ratio decreases after cancellation of each credit card, it won’t necessarily hurt your credit score if it’s not reported as closed, but you want your credit report to be accurate about the status of your accounts.

Follow-up with a Letter

Once you pay off all pending dues for the concerned credit card, insist on getting a written acknowledgement to have a record of your credit card closed. After receiving a written confirmation letter only then you should destroy your card. Keep a copy of the letter for your records.
Visit: www.cibilconsultants.com
Source: Secondary

Balance transfer on credit cards. Here's the guide!

Are you being offered with a new credit card carrying zero percent interest balance transfer? Eventually before you proceed to transfer a balance from one credit card to a new card, have a glance on our guidelines to safely transfer the balance on credit cards.

Selecting on balances to transfer

See where you stand by and then list all of your credit cards, their balances and their interest rates. Now, pick one or more cards with high rates whose balances you would like to transfer to save money on interest.

Estimate the transfer fees

Know about the balance transfer fee and calculate your balance transfer fee that you will be entitled to pay on the amount you want to transfer. Use a free, online balance transfer calculator to do the math.

Know about the incurred penalties

When you wish to do the balance transfer at zero percent, you still have to make the monthly payment on your balance to keep the zero rates. Note the interest rate you’ll pay if you lose the zero percent rates because you miss a minimum payment.

Avoid doing balance transfer with the same bank

Make sure you fulfill the basic requirements for the balance transfer. Remember, before you proceed with the process if your new account is with the same company then you cannot transfer a balance.  Also, your transfer request may be declined if you have due payments with the creditor to which you want to transfer the balance.

Keep your eye on accounts

Watch your old accounts to know whose balance you’re paying off to see when the balance transfer clears. In the meanwhile, don’t miss any payment deadlines on those accounts so you don’t incur any late fees. Each creditor has its own time frame for completing a balance transfer. Keep monitoring your new account to see when the balance has transferred over.
Visit: www.cibilconsultants.com
Source: Secondary

Pay off with credit card to increase your CIBIL score.

Credit reports are used by loan companies to help them determine whether you are a good risk or not and if you are likely to repay any loan taken out. There are some very simple steps you can take to raise your credit rating. Many of these actions are things not to do also.

"If you consistently pay off your bill as soon as you receive it, your balance will remain lower. If, on the other hand, you continue to charge up the card between receiving your bill and paying it off on the due date a couple of weeks later, your reported balance will be higher. This increases the chances that when the credit bureau takes the snapshot, your credit utilization ratio will be higher."

Avoid jumping from credit card to credit card.: If you "transfer your balance" - a scheme that doesn't hurt you, and gets you 0% interest on your balance for a period of time, sometimes as long as a year – unnecessary don't open the new account. Your credit history looks better to the credit bureaus if you have long-standing, established accounts.

Rely on your seniority in age: You can't do anything about, being older, but at least there's something good about ageing! Age is one of the personal factors which bureaus take into account while giving the credit ratings.

Regularly pay your bills on time: This is actually first in the order of things you must do to better your credit score. Each late payment is affecting your credit score and presents a picture of unreliability. You must determine that, if you want to improve your CIBIL score, you should pay your bills on time. The biggest hunk of your credit score is based on your payments history.

Source: Secondary

Debts shape your CIBIL

Paying off or defaulting on your debts plays a major role in shaping your CIBIL report. One late payment on your debts could affect your credit score in a very negative way. So, what does it need to pay off these debts faster in order to maintain your credit score at a good score?

There are two main ways to get rid of debt faster:

1. Don’t let your debts increase: 

The first and foremost thing you could do is to, don’t let your debts increase. Pay off the installments on time; don’t skip any installments as that could affect your credit score negatively. As the debts would increase, it would become that much harder to retain your credit score.

2. Try to reduce the interest rates:

Secondly : Don’t let the interests on your debts pile up –that would affect your credit score much more. If you are not able to pay off your debts, talk to the banks to give you reduction in the interest rates. You may not be aware of this but some banks do give recessions like these.

You can also apply with the same banks for a balance transfer or debt consolidations. In Balance Transfer cards, banks let you shift off your balance to a zero or low interest cards so that you can pay off your debts faster without the worry of the interest piling on. While in debt consolidation, you can consolidate your multiple debts by taking one debt to pay it all off. This saves you time, money and also the efforts to maintain those multiple debts.

These are some of the ways you could pay off your debts faster and save your credit score from dropping drastically.

www.cibilconsultants.com is the right place to seek for such problems.

Source: Secondary

Reasons behind your credit card refusal.

BANGALORE: Sir/Madam your card got declined after swiping! Have you ever faced such situation in your life? It’s actually embarrassing even when you think about such situations. Reaching or exceeding your limit is one of the most common explanations as to why your credit card would be declined but it’s by no means the only reason. Listed below are some other, lesser-known reasons why your credit card could be declined.

 

1. Exceeding your card limit: One reason that your card got declined is you have exceeded your credit card limit. In simple words if you continue to make charges once you have hit the maximum amount your credit card company will allow you to borrow. To avoid such situations the best way is, when you reach the limit, pay down your balance or request you issuer an increase to your credit limit. There are few credit cards those have per-day spending limits. Thus before making any purchases always check how close you are to your limit by checking your account online or calling the number on the back of your card.

 

2. If you have suspicious charges: If the credit card company suspects any fraud then they can quickly freeze your credit card. This move from a credit card company will actually work in your favor if you are a victim of identity theft. But it can also happen if your own credit activity has created a security risk for instance shopping in an unusual place, doing too much of transactions in one day, making a very large purchase or trying to withdraw a lot of money from an ATM. To avoid all the confusion the best way is to call your card company and find out why there is a security problem. By doing this if there is fraud then you can stop it quickly or if you have made the charges, you might be able to resolve the issue by simply answering a few questions from the card company.

 

3. Holds on your account: There are chances that before you return a rented car or check out of a hotel room the traveling, hotels and rental car companies might place a temporary hold on your account. The hold can be for a costlier amount than your eventual charge, possibly eating up your available credit if your card is highly utilized. In simple words the hold ensures that the company gets the amount of money it needs from your use of its services and prevents you from spending beyond your credit limit. Thus while making reservations in such huge hotels do a thorough check with your credit card issuers.

 

4. Your card got expired: If you are not regularly using your credit card or not purchasing much online where you need to put your card’s expiry date then it is difficult for you to realize its expiry date. Often the credit card companies send their customers with new credit card when the old one expires. Thus it is better to check out all the mails even if it looks like junk. If your card is outdated then the merchants in both the store and online will not accept your card. Not being able to buy something is a pain, but simply placing a call to your credit card company could bring you a new one in about a week’s time.

 

5. Your personal information is outdated: Most of the merchants may require you to enter your zip code while using your credit card. By entering the wrong information can cause a rejection when you attempt to pay. To prevent such rejections, login to your account and make any necessary changes. Then proceed to swipe with confidence, knowing all your details are up-to-date. By putting in the wrong information your card will be declined. Always make sure that the card company has your current billing address and telephone number. If you move to a new place, then try to update your new address and contact number on the bank's website as soon as possible.

Know from experts, about Credit History and Credit score, visit www.cibilconsultants.com

Source: Secondary

Use Your Balance Transfer Card Wisely

Balance transfer cards are cards that offer very low or zero interest rates. If you have high-interest debts to pay like loans, credit cards then you can go for a balance transfer card to preserve money on the high interest rates. You can transfer your due balance to a balance transfer card with a low or zero interest rate and pay off the balance without worrying about the interests piling up. But to get approved for a balance transfer card, you need to have a good score. A good CIBIL score also helps to get the balance transfer deals. But you should also know that balance transfer cards have an expiry period ranging from 3 months to a year.

So how should one use a balance transfer card wisely? 

Your main aim should be paying off that balance before the low interest rates for the balance transfer card expires and interests start piling up again. Don’t transfer a balance if you are not sure of paying off the debt before your low interest rate expires. Transferring a balance when you are not sure about paying it does more hurt than help because in the end you’ll be stuck with a bigger interest rate than the one in last account, once your low interest rate expires.  You would lose money than, what you were thinking of saving, while transferring the card. Make sure you understand all the terms and cinditions of the card before you make a transfer. Try to get the lowest fees & lowest interest rates and the longest period of time.

Balance transfer card don’t make the balances go away- they optimize your debt by making it less expensive for a limited period to help you pay it off. 
So, follow these steps and use your balance transfer card wisely!

For any assistance regarding credit score visit www.cibilconsultants.com

source-secondary

Who has an eye on your credit report ?

Nowadays, a number of organizations use credit reports in determining eligibility of people to who wish to opt for their services. Basically, organizations judge those people on the basis of their credit score. Credit Score is a calculation formulated by gauging the past and present financial performance in efforts to predict the future behaviour. This in short is known as Creditworthiness.

The credit report includes a list of all the past and present credit accounts open under our name, for example loans, credit cards or all other installments. The report records each date when the account was opened, your instalments payment history and your current outstanding balance.

 It is obvious to assume that only lenders who provide financial assistance would check credit report, but this is not the case. Your credit report is viewed by a number of other organizations. Below are the lists of some organizations that can check your credit report:

• Employers: If you wish to work in a bank or any other financial institution you shall need to undergo a credit check. But did you know that employers can require a credit check.

• Insurance Companies: Insurance companies have found that they can use credit score to determine how likely people will be paying their insurance premium.

• Insurance Agents: Insurance companies correlate credit scores with the number of claims you file. Insurance study claims that drivers who have high credit scores are less averse for claims. When one applies for a premium from an insurance company, the premium you are pay and the rate you receive is based in some part on your credit score.

• Utility companies: When you open utility accounts, including electric, cable and telephone services, they also examine your credit history. Utility companies use your credit score to determine whether you will be required to put down a deposit.

Maintain good credit score by opting service packages available at www.cibilconsultants.com

Source: Secondary