Learn how your business credit cards affect your CIBIL score?

Yes,Every business credit card affects your credit report. But how they affect your credit report depends on you- more specifically, how you choose to handle your company's decision to grant you a business credit card.

Only having business credit card will not improve your credit score. If you're paying your bills on time with your business credit cards, you can expect your credit score to be improved in your credit reports. But if you're not paying on-time, it will harm your credit score.

Personal and Business credit: New businesses don’t have a lot of their own credit history. You may not have built up specific credit accounts related to your business name - that's why you're looking for a business credit card in the first place.

Lenders will routinely look at personal credit for new business owners who haven't yet established their own enterprise. That shows having a good score will benefit you a lot, and help you dedicate yourself to repay borrowed amount.

Personal Credit History: You will be surprised to know that, having no credit in the past, also might count against you on some card applications. Lenders routinely run a simple credit report for a potential borrower. There are a lot of issues that can come up on this credit report, that may stand in the way of your loan or business credit card.

If you have someone is consignor on a loan with you, that can be a potential solution, but those individuals have to know what they are getting involved in, and it's up to you to reassure them that the situation won't end up as loan default and complications. You can also shop around and try to find lenders who will take the time to scratch the surface of your credit history.

Source: Secondary

First Time Credit Card users should know these.

First time using credit card seems fun and quite exciting to users. But it is important to keep in mind that a credit card isn't your money but it is borrowed money which you have repay back to the credit card issuer. 

Given below are some tips to use your credit card smartly and in turn helps in strengthening your CIBIL report and credit score:

Pay Off the Balances Monthly:
It won’t be a problem for you if you use your credit card well within your budget. To avoid interest, make sure to pay off your balances every month. Not paying off your balances will result in the interest piling up and eating away your wealth. That is why make sure to pay off whatever you use on the card every month.

Pay Your Bills On Time: 
As you know payment history is the most importance influence of your credit score. So, make sure that you pay your bills on time. Because late fees would add up quickly and late payments would impact your credit score.

Read the fine print before signing for a credit card:
You should know all the details like the duration of the grace period, interest rates and any other fees being charged. Also many people don’t know that interest rates can be negotiated so do a full research before applying for a credit card.

Access your credit score and report:
Checking your credit score and report at regular intervals helps you in managing finances better and identifying incorrect information on your credit report and also alerts you when there is a case of possible identity theft.

Don’t give out information casually :
Make sure that you keep your credit card information safe and secure. See to it that you don’t give out your passwords, account number or any other information when people ask for it online or on telephone. Before giving out information, find out if the person is trustworthy and is asking you for a specific purpose. Check if the site is secure before giving out credit information.

All first time users should consult a credit monitoring agency for knowing the pros and cons of using a credit card and its effect on credit score.
For more details visit www.cibilconsultants.com and book an appointment for getting services to renew, revamp and retaining your credit score !

Source: Secondary

What's good for your credit score: Settlement or Full payment?

There is an old debt in your account for a long time and the bank offers you a settlement to pay less than you owe. So what do you do? You may be in two minds, where on one hand you would be tempted to pay the settled amount and clear the debt while on the other hand, wait for some time and pay the full amount. People are confused on what effect any of these options may have on their credit score?

Settlement of a debt is when the bank offers you a lower amount than your actual debt in exchange of you making a one-time full payment for the settled amount. It is basically you pay off the amount in one time to have your debt forgiven. Settlement is usually an option for unsecured debts like, credit cards and personal loans where the credit has no collateral backed up and which could be sold off to pay your debt. Since, the creditor has a risk of getting no payment, he goes in for settlement where at least he would receive a smaller one-time payment than no payment at all.

But as tempting settlement can sound due to the lower amount, it does affect your credit score in a negative way. Firstly, it would show up on your credit report as ‘Settlement’. Whenever you pay an amount less than what you owe, it does hurt your credit score and credit history. In addition to all that, a ‘settlement’ on your credit report looks bad to potential lenders in future as it shows a history of not paying off what you owe.

But if you already have missed payments and your debt has been taken over by a collection agency, then your credit score already has been damaged. Taking a settlement would further have little or negative effect on your CIBIL score.

Full Payment is always the best option to eliminate a debt. When you pay off the borrowed amount in full it gets wiped off from your debts. It also affects your credit score positively in two ways- one, by reducing your total debt and other, building a good payment history.

If you are looking for a loan in near future, then settlement would be a very bad option and full payment should be the only option. If you can wait for some time and pay off the debt in full, then that would be very good for your credit score. But, if you think the interests are piling up and there is no way you can pay off the whole amount then settlement is the way for you.

Find out your credit score at www.cibilconsultants.com

Source: Secondary