Look for these on your credit report!

You probably already know that you should check your credit report at least once a year. But just why should you care about your credit report in the first place? Well, your credit report is the “snapshot” of your financial health that’s used by lenders, landlords, credit card companies, insurance agencies, cell phone companies and even future employers to judge your creditworthiness. 
Your credit report and your credit score is based on your credit history, and lenders use that to decide your ability to pay your bills or repay your debt.

So your credit history impacts a lot, which is why checking your credit report and making sure it’s accurate is so important. Understanding your credit report – what you owe and to whom – and making sure your report doesn’t have any errors will make sure that you’re as financially healthy as possible.
                     

When you do get your credit report, you’ll want to look through it to make sure that everything is accurate and there is no suspicious activity or accounts you don’t recognize. Here’s what to look for when you look through your credit report:

Information that’s not yours: If you have a common name, your credit history might have some information from someone else’s history. Make sure your name and address are accurate on your report.

Information from an ex-spouse: If you are divorced, your ex’s information may be mixed up with yours.

Accounts you don’t recognize: If there is an account on your credit report that you don’t recognize, it could mean that someone has used your personal identity to open up financial accounts in your name. This is also known as identity theft. Identity theft happens when someone steals your personal information and uses it for financial gain. A person might open a new credit card account or open a new bank account in your name if they someone got access to your full name, birth date and Social Security number. If bad checks are written or bills are not paid from these accounts, it will show up on your credit report.

Out-of-date information: You may have negative marks that are listed after the legal deadline for removing them from your report. Most negative marks can stay on your account for up to 7 years.

Wrong notes for closed accounts: An account that you closed yourself may look like a creditor closed the account. An account closed by a creditor can actually hurt your credit history, so make sure it’s reported correctly.

Non-delinquent accounts still appear as delinquent or more than one delinquent date is listed on your account: Credit reporting agencies may not have noted which delinquencies have been fixed. Similarly, it you have an account that’s in collections, your report might accidentally have more than one date for when your account became delinquent. Make sure there’s only one date listed.

If you do spot an error on your credit report, you have the right to dispute any inaccurate or incomplete information. You’ll need to contact both the credit bureau and the organization or company that provided that information. Both are responsible for correcting inaccurate or incomplete information in your report.

Learn more about identity theft, visit: www.cibilconsultants.com

Source: Secondary

They affect your credit score most.

You probably already know about the connection between your credit history and your credit report and how both impact your credit score. Remember that your credit score is like the grade on your credit report: companies use this number to rate your likelihood that you’ll repay your debts and pay your bills.

But just what are the factors that go into calculating your credit score? And which ones impact your score the most?

Here’s the breakdown of what affects your credit score, from the highest impact to the least:

Your payment history : Whether you pay your bills on time and if you always pay at least the minimum amount. Even one late payment can impact your credit history.

                      

The amounts you owe : Some percent of your credit score is determined by the amounts you owe, which is made up of two parts: the total amount of money you owe all your lenders and the percentage of available credit that you’re using (like hitting the limit on your credit card). People who are using less of their available credit are considered lower risk than people who are using a lot.

The length of your credit history : The amount of time you’ve been using credit makes up fifteen percent of your credit score. Someone who has been using credit for a long time is considered less of a risk.

New credit you open or try to open : Some percent of your credit score is also based on the amount of new credit you’ve applied for recently. Every time you apply for a loan, credit cards, store cards and even a cell phone, someone will run your credit. Someone who applies for a lot of credit in a short amount of time is seen as a credit risk.

Types of credit : The types of credit you have impact about ten percent of your credit score. People with a mix of credit types, like credit cards, an auto loan, and a mortgage may have a slightly higher score than those with only one type.

So, now you know what makes up your credit score, which is your overall “credit grade.” Your credit report, on the other hand, gives you all the details about each account and shows you everything from how much money you owe, how many accounts you have, how many accounts are in good or bad standing, and how many times a lender or another company has checked on your credit history. Since, your payment history make up 35 percent of your credit score, you’ll want to pay attention to two places on your credit report: potentially negative items (accounts unpaid or past due) and your status and payment history.

Even if you do have a few negative marks on your credit report, the good news is that on-time and regular payments can help boost your credit score. It may take a little time and patience, but paying your bills consistently can help boost your credit.

Source: Secondary

Make the optimum utilisation of your credit card

Credit cards can be a convenient way to acquire life’s necessities and luxuries. But it comes at a price in the form of interest rates which, when compounded over a long period, can add up to a huge sum of money. If planned well and implemented with discipline, you can actually enjoy the benefits of credit cards otherwise they can also become financial nightmare when used inadequately. Let us go through some best ways of using a credit card:

Monitor your spending habits

Here, you get credit while you go spending or paying bills. You can use the credit limit to purchase anything you desire. But consumers often tend to over limit while using credit cards; it also puts you under pressure as a portion of your monthly income is truncated towards paying the EMI. So, keep a check on your credit card spending and avoid debt trap.

Don’t keep many cards

The more credit cards you have, the more you may be tempted to spend and the more difficult it will become to keep a track of how much you have spent and when the repayments are due. Ideally, they should be used as a temporary substitute for carrying cash. And, if that is the only motive you have when you carry a credit card, you will find that having one or at most two is quite sufficient.

Immense usage

Make the best use of credit cards while making every possible purchase even regular items with it like online purchases, bills, groceries etc. This will lead you keep a budget of your day-to-day expenses while maintaining a record. In this way you can earn maximum credit points as well.

Say ‘No’ to borrowings on cards

Just remember that credit cards are easiest way to acquire what you needed at given time but it can lead you in trouble also at the same time. They are not an additional source of money. If you get shortage of money, it’s better to avail a personal loan rather indulging in cash withdrawals through credit card. As the interest rate on personal loan is less in comparison to revolving credit on credit cards facility.

Terms and conditions

Be it a credit card, the devil is always in the details. The small print, i.e. carefully worded clauses, sets the terms and conditions of your loan, including the schedule of EMIs, the interest rate calculation method, charges and penalties in case you deviate from your repayment schedule. Unfortunately, many borrowers don’t spend much time on it and this leads to troubles later on. It’s better to read it seriously and understand it well.

Avoid paying card surcharge

It’s an important policy that merchants are not permitted to demand surcharge on customer purchases. So, neglect paying a card surcharge.

Reward points and cash backs

Whenever possible try to make the use of reward points and cash back. But do remember that you take them as an additional bonus and do not get tempted with them.

Examine your credit limit

It’s wise to have always maximum credit limit as to shed the situation of uncertainty. It’s prudent to implement self-discipline on available credit limit on your card. And try to avoid offers to increase the credit limit on your card.
Visit- www.cibilconsultants.com
Source: Secondary

Your Credit history need to be good to get a mortgage.

Your credit history is one of the most important parts of your application when applying for a mortgage. Bad credit or a low credit score will compromise your ability to get a mortgage, because lenders will consider you at risk of defaulting on your loan. While it is possible to get a mortgage with a bad credit rating, you might have to make some concessions in regard to interest rate and the loan amount.

The good news is that negative information on your credit score is not permanent, and positive changes in your credit habits will begin having an immediate impact on your score. Additionally, lenders use other factors to determine loan eligibility.

 • Pay bills on time each month: Particularly those for Credit cards & Loans, Bill payments will have directly impact your credit score and paying bills on time is a positive first step in improving a bad credit history.

• Check your credit history: Before applying for any mortgage, you should always check your credit report carefully; you can obtain a copy of your report from one of the major credit bureaus, which are CIBIL, Equifax and Experian.

• Manage your mortgages: People with bad credit may get approved for mortgages far below their desired amount, but having any type of mortgage on your credit report will improve your score, so consider a more modest home and fix it up.

You should also avoid making lots of applications for credit, as these searches will affect your credit rating.

You may also wish to speak to your current account provider to see what mortgages they offer and explain to them your credit history situation. If they have no products suitable for you, then at least you know without having to make an application.

Source: Secondary