Is your physical health included in your credit offer?

When we talk about credit, we are often referring to financial health. Fair or not, your credit history is considered a very real peek at your financial health. If you have poor credit, you are assumed to also have poor financial health.

But what if your credit history provided more than just a look at your financial health? What if your credit was also an indicator of your physical health? 

Attitudes and actions that lead to poor health — and credit

One of the reasons that there appears to be a correlation between poor credit and poor health has to do with the attitudes and actions that lead to these issues. According to the study, which used data from more than 1,000 people followed over the course of 40 years, self-control, cognitive ability, and educational attainment are factors that influence both cardiovascular health and credit history.

                                  

The bottom line? If you practice poor impulse control, and if you engage in habits that are likely to damage your health, or even just avoid actions that are good for your health, there is a pretty good chance that you aren’t very observant of good basic behaviors in your financial life, either. And that can lead to credit problems.

According to the study, the human capital factors that predicted both credit scores and risk for cardiovascular disease accounted for about 45 percent of the correlation between credit scores and cardiovascular risk. While it’s not exactly a huge endorsement of the link between health and credit, it’s still a pretty big deal. It indicates that your health habits and your money habits are probably more connected than you thought.

Source: Secondary

Secret To Financially Stable Married Life

Being married involves having a shared vision about the future. Spouses should always plan their individual, as well as joint finances. If not appropriately planned, this could take a toll on the couple's financial health. 

Married couples generally maintain two separate credit records and histories. Thus, both husband and wife should obtain their individual credit information reports (CIR) from a recognized credit information company and check their respective reports. Most married couples in India move from an individualistic credit outlook to a joint one post marriage. In such situations, it would be prudent to analyse both the individual CIRs and take a consolidated action on what is needed to make their financial situation better. 

Maintaining a good credit score is easier said than done. A few simple steps can go a long way in keeping a check on your credit history. 
              

Always pay as agreed 

All repayments - and missed ones - are recorded on your CIR. Missed payments and high outstanding amounts negatively impact your credit history and credit score. Pay your EMIs and credit card dues on time and as agreed to the lender. 

Joint and guarantor credit a/cs 

Monitor your joint loans or loans where you are the guarantor regularly , since you are held equally liable for missed payments. Joint holder's negligence could affect your ability to access credit/loan when you need it. Also evaluate the possibility of moving an individual loan to a joint mode. In this way, both of them can avail additional tax benefits which in turn will result in family savings. Such opportunities also provide each partner to monitor the financial situation of the family and total outstanding. 

Credit/loan applications 

Inquiries made by lenders because of an application you made for credit or loan can affect your score. Too many inquiries might mean that you're taking on too much loan or that you're in some kind of financial trouble and are looking for credit to help you out. In most of the cases, it will be prudent to apply for the loan as joint holders rather than individual persons. 

How to improve your score? 

Recency of the occurrence of the default is considered by the lenders. As a result, though defaults may have some impact on your overall credit rating, it should not prevent you from availing of a new loan if your payment behavior subsequently has been regular across the loans and credit cards you hold. However, in case of couples, one of them having a better than expected score can compensate to having slightly poor score of the other. Such scores will be viewed complementary in case of joint liability when couples apply for a loan. 

The credit score is impacted by a combination of both negative and positive events. Many banks allow customers to rebuild their credit record with a secured credit product and the credit card with a deposit securing it is an example. This is definitely a good means of rebuilding a good track record. 

Source: Secondary

Credit Health: Plastic money can also affect

There is little doubt that credit cards are a more convenient way to carry money compared to hard cash. From daily expenses to buying luxury goods, credit cards are extensively used even in India.

And it’s almost a norm to keep more than one credit card. Nothing wrong with that, as long as you can manage them with expertise. How to use the credit card is more important that the credit limit of the cards or how many you possess.

What will happen if your credit card is lost in the market while you are shopping? What if you use your credit card more than the prescribed limit?

Such things can cause a serious damage to you and your financial health.

Pooja and Ravi were living happily in Mumbai till the banks refused to grant him an auto loan. Ravi was a manager in a multi-national company, and drew a handsome salary. Puja, being a housewife, bought all essential household goods including fancy stuff to decorate her house.
              

She preferred to make the payments through credit cards instead of using cash. Ravi had two cards, one he had given to Puja and the other he kept to himself. Like any young couple they often went out for dinner and movies.

Then one day they decided to buy a car and applied for a loan.

 To their utter dismay, the loan application was rejected. In spite of Ravi earning good money, they failed to get a loan because of bad credit history.

Credit score

Credit score is a three digit numerical number which ranges from 300 to 900. Credit score is a snapshot of the credit history of an individual. It is calculated by the credit bureaux. The banks and financial institutions provide all the details of the individuals to the credit bureaux to check the creditworthiness of the individuals.

Credit history is the result of all past payments of an individual. It is an analysis of the payment history of an individual. Since the credit history of Ravi was poor, the bank was not confident to lend him money for purchasing a car as he had been not been regular while repaying his dues.

Also the card that Pooja used for shopping had crossed the maximum limit.

The use of credit card should be done efficiently. Mistake made while using credit cards can snowball into a major crisis.

On the other hand if used efficiently, credit cards can help you in increasing your credit score. But if used without care they can harm your financial health.

Source: Secondary

Importance of Hiring Credit Repair Agencies

Your credit score plays vital role in determining your financial health. It not just helps in getting your loan approved, but there is much more associated with it. It is important to keep a check on your credit score to enjoy sound financial health and goodwill. There are many ways of attaining good credit score. If you have tried your hand at fixing your credit report but have been failed to attain desired results, you can always take help of credit repair agencies to improve credit score. There are many benefits of hiring credit repair agencies for improving your credit score. 

·         Most of the people are not aware of credit repair process such as how to get credit report from CIBIL and how to improve credit score; credit repair agencies can help you with all these problems. 

·         These firms have sufficient resources to handle your disputes. They usually have a team of experts having complete knowledge of rules and regulations governing credit repair procedures. 

·         You don’t need to dedicate your important time to fix your credit report. Your hired firm will take care of all your credit repair tasks. 

·         They will analyse your credit report and will suggest you the right ways to improve your credit score over a period of time. 

Credit repair agencies help in improving your credit score and maintaining your credit health in long run. It is important to choose credit repair agencies wisely to reap maximum benefits out of it.

Source: Secondary

Guaranteeing a loan can affect your credit score and history

Nowadays, access to your house or car or that dream holiday has been made easier by lending companies offering credit and loans at increasingly competitive rates. However, one must note that taking a loan doesn’t solely depend on the borrower’s financial standing. If lenders feel that the financial health of the end borrower cannot be determined standalone, or in case the borrower has no source of income, another option to get a loan processed includes involving a guarantor. Apart from facilitating an individual to fund his education or business, such an arrangement propels financial inclusion, thereby enabling the economy to grow holistically. 

Naturally, for a financial institution, it is of paramount importance to make sure that the borrower has the capacity to repay the loan with due interest. In case the primary borrower defaults, a guarantor’s role is extremely crucial, as they become the fall-back option for the lender. Lenders insist on guarantors for loans in which there is no appropriate collateral, such as education and unsecured installment loans. For other loans too, lenders can insist on one, especially if the lender has a reservation on the repayment ability of the primary borrower. Data shows that loans backed by guarantors have lower default rates than the average of the portfolio in products like commercial vehicles. Hence, the creditworthiness of the guarantor is of substantial importance.

  

In India, several loan accounts, specifically education loans, are backed by guarantors. In the case of education loans, over 80 percent of the loans are booked with guarantors since the primary borrower would not be earning for the duration of his/her education. In most cases, a loan gets approved at the behest of a guarantor, who indirectly assumes the responsibility of furnishing the loan though he is not the end borrower. Guarantors are legally responsible to assume the liability if the primary borrower defaults. A guarantor’s role doesn’t end with the disbursal of the loan; this is where the responsibility actuality just begins. There are several issues that guarantors need to know, who choose to be good Samaritans for their friends’ or family members’ cause. 

Most importantly, a loan sanctioned will directly impact the guarantor’s credit report and score. Though a guarantor might be financially prudent and disciplined in paying his or her own equated monthly installments (EMIs), credit card bills, the friend or relative who they are backing might not emulate that same responsibility. Should the friend or family member miss a payment or make a late payment, the guarantor’s credit history and score would be negatively impacted. Therefore, one should keep in mind that the moment they sign as a guarantor for a loan, it shows up in their credit report with a clear indication that they are the guarantor. The guaranteed loan will reflect on the guarantor’s credit report and will be used by the lending institution when eligibility for a loan is calculated. 

Additionally, it is advised that the following facts are taken into consideration before signing up as a loan guarantor. One must also remember that a guarantor cannot take a stance on deciding the limit of liability towards the loan. The very purpose of getting a guarantor for a loan is to make sure that the bank has an alternate source of recovery if the principal debtor defaults. So, one must not always go by the credit repaying capability of the end borrower alone. Instead, a guarantor must calculate his own financial capability before signing up. 

At the same time a guarantor needs to bear in mind his own financial goals. If the prospects of purchasing a new home or starting up a business are on the horizon, the guarantor should stick to backing small loans that will not weigh heavy on a credit report. A financial institution might refuse credit or might reduce the amount of credit to the guarantor if he or she is already backing another loan of a fairly large amount. If at all one has to become a guarantor, getting another guarantor to go in on the loan, as the liability could then be split between the two guarantors. The strength of the relationship with the primary borrower based on which one becomes a guarantor needs to be borne in mind as especially in long term loans. 

There have been cases where a guarantor has been penalized for the principal applicant’s delinquency. Hence, it is not wrong to assume that a guarantor’s liability could be more than the principal borrower’s. Even if the guarantor has a good track record of repayments or good credit history, a delinquency could act as a deciding factor for creditworthiness when banks access credit reports. So before signing on the dotted line, a guarantor should weigh all of the pros and cons associated with the financial backing of friends and family.

Source: Secondary

Facts of Identity Theft !

Identity theft protection comes in many different forms. The first step in protecting yourself is to understand a few basic facts about identity theft.

Identity theft protection services can help you monitor your account. It can remove your name from the marketing mailing lists and you shall be alerted for this. Its valuable and a time saver for many to pay a credit health company to keep track of customer’s financial health (accounts), credit reports and their personal information. Others opt out to do this in their own time.

Facts of Identity Theft:

a) Protecting your personal Information

b) Having paper shredder can help safeguard your identity (personal information) and pre-approved credit offers in wrong hands.

According to reports, Identity theft is one of the fastest growing crimes across India. Assuming your entire identity is the not the only way identity theft might occur. Someone using your PAN information or address or in cases a credit card or doing transactions on your behalf without your permission is Identity theft.

The Credit monitoring program will give you a credit score which is very useful. CIBIL report is most preferred across India by banks and customers

Identity theft protection shall give you a cover wherein you can secure your line of credit for any loss occurred due to misuse of your identity against your permission.

Avail your cibil report and improve your credit score at www.cibilconsultants.com

Source: Secondary