Compare credit card offers this way

“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,  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,” he continues.

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.

Consideration of  the perks is also recommended that come with a credit card. 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? 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. 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.”

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

Steps to check Credit eligibility when you have low score

Though there is no standard process to check Credit Eligibility in case of Low CIBIL Score. Reason being CIBIL Score calculation is as secretive as the secret recipe / formula of Coca Cola drink :). Still we can find out at macro level what is hurting our CIBIL Score and reason for Low CIBIL Score.

As a 1st step CIBIL report should be readily available. Please note that in most of the cases, banks only pull out CIBIL Score not CIBIL Report to check basic eligibility. Based on score only loan / credit card is approved or rejected. In case of Low CIBIL Score, application is rejected without going into further details. It is important to note that information available with Bank Executive is only limited to your 3 digit CIBIL numerical value i.e. CIBIL Score. But in order to show that they know everything they pass wrong information to customer regarding Low CIBIL Score which is unfortunate.

As a 2nd step, please check all accounts which are OPEN in CIBIL Report and note down corresponding credit limit or principal outstanding. In case of Credit cards, you should account total credit limit of credit card instead of credit limit utilized. Reason being, you can utilize upto 100% of credit card limit therefore it is assumed to be credit utilized or can be utilized by the customer. Sum total of all account will give current Credit Utilization. Assuming current credit utilization is 20 lakh.

Step 3: Now check your current annual income. Only consider net take home salary as reimbursement or bonus is not considered while fixing eligibility of any loan. Assuming net annual take home salary is 10 lakh.

Step 4: Multiple net annual take home salary with 4 and it is your credit eligibility i.e. 40 lakh. Now important point is that this multiplying factor of 4 is different for different people. 

Now from above calculation, the Home Loan eligibility of a person is 40 lakh minus 20 Lakh i.e. 20 Lakh. Assuming this person utilized overall 30 lakh credit limit instead of 20 lakh then his Home Loan application will be rejected.

Please note that this article has discussed only one of the factor which influence CIBIL Score. Credit Eligibility has strong co-relation with Low CIBIL Score. CIBIL Score is complex calculation and is dependent on multiple factors. A single factor can only influence to the extent weightage assigned by CIBIL to that particular factor. In this post we are assuming that an individual has never defaulted or delayed any payment. His Low CIBIL Score is only because of Credit eligibility issue.
Visit  www.cibilconsultants.com to cure your any finance related problem.

Build credit faster but responsibly.

Building Credit

Good credit has lots of benefits. It can help you get the mortgage you need to buy your dream home, or save you thousands on insurance premiums. On the flip side, if you have poor credit you’ll be missing out on these great benefits, and likely waste a lot money in the process.

So what happens when you want to change your situation and need to build credit fast? What can you do? The first step is to think about building credit as a long-term goal, and not something that will change overnight.

Crash dieting doesn’t work (at least not as a long-term solution) and neither do short-term financial fixes. However, there are a few ways for you to build credit fast and create smarter spending habits. If you’re striving to build credit quickly, check out these four simple rules:

1. Check For Errors 

One of the fastest ways to increase your credit score is to check for errors on your credit report. Mistakes happen but they won’t get sorted out unless you contact one of the three major credit bureaus to get it resolved.

Maybe an account is showing on your credit report that doesn’t belong to you, or someone else’s information is getting mixed up with yours. Resolving the problem shouldn’t take a lot of time, and could help boost your credit very quickly.

2. Negotiate With Creditors

Have you made a late payment recently? Do you have an account that hasn’t been paid in a while? These outstanding debts can wreak havoc on your credit report. Simply call up the financial company and ask for them to work with you.

Maybe they can erase a late payment you just made, or possibly settle on an amount that will cover the entire balance on your account. You’ll want to get this in writing of course, but don’t let unpaid debts remain on your credit report. Deal with them as soon as possible and see if you can negotiate a better solution.

3. Increase Your Credit Limit

While you’re calling the credit card company, ask them if you qualify to have the credit limits on your accounts raised. This could help decrease the overall amount of credit used and increase your credit score.

The proper amount of credit utilization is 30% and makes up a good portion of how your overall credit score is calculated. So, raising the credit limit on your accounts will reduce the amount of credit used, thus making your account less of a risk to creditors..

4. Become an Authorized User

If you’re unable to build credit fast by yourself, consider asking a friend or family member to help by adding you as an authorized user on their account. You don’t want to put their financial history in jeopardy so offer them a contract in writing, and come to an agreement on terms.

It’s kind of like having an accountability partner while you’re losing weight. They can help you stay on track, and you’ll answer to them on a regular basis. Do your part to build credit responsibility and work with someone who can influence you in better spending habits.

Your credit history won’t change itself, so get out there and make it happen. Use these rules to start building credit fast so you can gain financial freedom in the future.

Source: Secondary