Find your credit score

Do you know your credit score as per Credit Information Bureau (India) Limited (CIBIL)? If not, find out immediately and if yes, use it to your advantage. When you apply for a product, a ‘credit check’ is done. It’s an attempt to predict your future behaviour based on what you’ve done in the past. In a nutshell, your credit score can determine if a loan application you make will be approved or turned down.

CIBIL implications on you

Banks, especially public sector banks, consider the credit score of an individual before sanctioning loans. Regardless of either you need a large or small loan, review your CIBIL Transunion score and Credit Information Report before filing your loan application with the lender. This could acquire you a fast and simple loan processing. In accordance with CIBIL reports, a Transunion score is a 3-digit numeric brief of your credit history which symbolizes your financial and credit strength. Your score is emerged from credit history which ranges from 300 to 900 points as specified in the Credit Information report. This score is calculated based on your history with financial institutions such as banks and credit card companies. The CIBIL CIR is given to you conjointly with your score considering that the grounds on which your credit score is developed. The lender undergoes your credit report and score to determine your repayment capacity. If you score higher, your success rate of getting your loan application approval could be better.

Low your interest outflow with good score

If you have been diligently paying your credit card dues and other loan EMIs, you will have a good credit score as per the information collected and displayed by CIBIL. However, if you have settled your outstanding credit card dues by making partial payment, it will reflect in your credit score. This can affect your chances of getting a loan, as many banks consider your credit score as per CIBIL together with other factors such as your age, income, occupation, prior relationship (if any) with the bank, etc. before sanctioning the loan.

Here’s a table to give you an idea of percentage of new loans sanctioned to people with different credit scores:

Credit score	Percentage of new loans sanctioned
<650	4.7%
650-699	5.2%
700-749	9.7%
750-599	22.8%
>=800	57.6%
source: cibil.com

Hence, if you are looking for a loan, be it a home loan, personal loan or car loan, you must know your CIBIL rating. Armed with a good score, you can get a better deal by negotiating the interest rate on the loan or get other related charges waived off. You can lower your interest rate which goes a long way in reducing your EMIs.

A good score allows you to avail a wide spectrum of credit from various lenders. It also means that you will be able to easily secure a new credit card or get a loan at more favourable terms because of the choice of lenders. On the other hand, if you don’t have a good score then you will have to make do with either no borrowing or borrowing at a very high cost.

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Rectification of errors is a necessity

Don’t let inaccuracies in your Cibil credit report turn into costly mistakes. As your Credit Information Report (CIR) plays a crucial role in the loan application process. Hence, any discrepancy in your CIR may result in reduced chances of a loan approval. Therefore, it is mandatory that the information on your CIR is accurate and updated.

Your credit information is collected by every bank where you have a relation, be it a savings account, a current account, a credit card or a loan. The bank keeps track of the length of your account, its usage, your payment track record and other data.

Your CIBIL Transunion score is a 3-digit numeric value which summarizes your credit history and financial health. The CIBIL score you receive will range between 300 and 900. The higher the score the more creditworthy you are. Sometimes an error in your Credit Information Report (CIR) can result in problems securing a loan. Some of these errors in a CIR can be rectified easily. Only errors pertaining to basic information such as name, income tax ID, date of birth; account information and ownership of account, etc. can be rectified. You will need to provide information related to your name, date of birth, address and contact information in an online form. You will also need to furnish the reasons for disputing your CIR. The control number which is a unique 9-digit number written on the top right hand side of your CIR and the date of CIR will also have to be filled in order to complete the request for change. CIBIL then evaluates the case and if need be, takes it up with the relevant credit institution. This process can take up to 30 days from the date of filling the request. A service request number will be generated as soon as you complete the online procedure and you should note it down for future correspondence.

Here are some of the common inaccuracies that you must scrutinize for in your credit report.

• Account information
  Making duly payments on your current loans and credit cards will boost your credit score. Make sure that all your loan accounts are reflected in your CIBIL credit report as good accounts, if not reflected in credit report then it may bring down your credit score.
• Personal information
  Your credit report enclose the personal information like your name, address, date of Birth etc. While it may appear insignificant, but personal information being correct means your record cannot be mistaken for someone else.
• Records are not updated
  It is probable that you have paid off an outstanding loan over three months but your credit report records still show it as outstanding. This will have an adverse effect on your credit score.

Incorrect credit limits

It is viable that your credit card issuer has increased your credit limit and not informed the credit bureau. A lower credit limit would mean that your account will show a high credit utilisation ratio. A high credit utilisation ratio impacts your credit score negatively.

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CIBIL Score and Credit Card Limit

Credit Card Limit is basically “Spending Limit” allowed on your credit card. Credit Card is riskiest business for any bank. The default rate is very high on credit cards as it is totally unsecured credit extended to customer. Now a days banks are extra cautious while issuing a credit card. A credit card is issued only after due diligence. Every credit card has different credit limit depending on risk profile of the customer. Credit card limit is decided based on income, current loan portfolio, expense pattern and overall risk assessment of customer by the bank. Banks pull out CIBIL report of a customer to check most of these point. If CIBIL sore is less than 750 or there is a default on payment in past then Credit Card application is not be approved. Basically CIBIL score is a credit report card of a customer i.e. how he manages his personal finance and credit discipline followed by the customer.

Credit Card Limit and CIBIL Score

When the credit card is issued, banks play safe and keep Credit Card Limit on lower side. Based on the usage of customer and payment history, banks keep revising Credit Card Limit at regular intervals normally 12-18 months. At macro level, higher credit limit shows that bank has high confidence on customer that he/she will not default on credit card payment. Credit Card Limit is good pointer how your CIBIL score is moving. If bank offer to increase your credit limit then you should grab the opportunity. It also implies that you are following good credit practices.

As a thumb rule, you should never use your credit card limit more than 30% of approved credit card limit. If current limit is not sufficient then you can always request bank to increase your credit card limit. It is not necessary that bank will oblige. As a back up plan, you may opt for 2nd credit card which will give slight cushion. Credit limit will not increase drastically until unless you are eligible for enhanced eligibility based on usage patter and credit history. An increase of 20%-30% is decent. It is always advisable not to keep more than 2 credit cards.

In normal scenario, financial advisers suggest not to increase credit card limit even if the bank offer to increase the same. Their main concern is that with increase in credit card limit, a customer will tend to spend more. The point is that Bank offer to increase Credit Card Limit only when they observe that customer is following good credit practices. It also imply that customer is using credit card responsibly and making all payments on time. As it is mentioned that as and when bank offer to increase the credit then you should opt for it. At the time, increase in credit limit does not mean that you should stop following good credit practices. Obviously with increase in income level, credit card usage will increase. In order to maintain discipline you should never utilize more than 30% of available credit card limit.

As it is highlighted that higher credit limit means high confidence of bank in your re-payment capability therefore high Credit Card Limit has positive impact on CIBIL Score. Normally Credit Card Limit is around 2.5 to 3 times of monthly gross salary. Assuming a person's monthly gross salary is 1 Lakh. His credit card limit should be between 2.5 lakh to 3 lakh. This cumulative limit is across credit cards in case he is carrying multiple credit cards. If he have 2 credit cards then my cumulative credit limit should be in this range. Credit Limit of more than 3 times monthly gross salary will have positive impact on your CIBIL Score. 

High Credit Card Limit will reduce my future Loan Eligibility

This is the biggest misconception that increased credit limit will eat into your Loan eligibility. Credit Card limit is somewhat similar to overdraft facility extended to the customer i.e. facility is extended, customer is availing or not is different. Credit Limit should not be misunderstood as Loan or Mortgage. Reason being, till you utilize this limit it will not be considered as Loan or credit. Therefore it is advisable to utilize only 30% credit card limit at any given point of time. A parallel can be drawn between Credit Card Limit and Home Loan Eligibility. In case of Home Loan, assume based on his eligibility bank fix his Home Loan eligibility as 1 Cr. If a person only opt for a Home Loan of 40 lakh. In this case his loan/credit liability is restricted to Home Loan availed i.e. 40 lakhs not 1 Cr (Home Loan Eligibility). Similarly in case of a Credit card, if a person's credit limit is 3 lakh and he only utilize 75k then his credit/loan liability is 75k which will eat into his total loan eligibility.

Holding Period of a Credit Card

Some people have habit of churning credit card as and when they receive new credit card offer. It is not advisable to churn credit card because holding period of a credit card i.e. from how long the customer is using particular credit card also impact Credit Limit thus CIBIL Score. It require atleast couple of years time to understand the credit behavior of a customer. Normal credit cycle is of 1 year because credit usage vary from month to month. A person's credit card usage is high during the month of April as he pay all his annual insurance premiums during April. Similarly, usage can be drastically low during September and February. In order to discount all these seasonal variations, credit cycle of atleast 2-3 years is considered to understand credit behavior. Besides credit cycle, longer holding period of credit card shows stable credit behavior of a customer. Holding Period directly impact CIBIL Score therefore if you are using same credit card from last 5 years then there is high probability of better CIBIL Score.

To summarize, Credit Card if used judiciously and intelligently can help to improve CIBIL Score in long run. Some people have misconception that since they don’t use Credit Card therefore they should have high CIBIL Score. Answer is CIBIL score is a derivative of Credit history. If you don’t have any credit history then how financial institutions will check your Credit history. Only a good credit history can help to build good CIBIL Score of more than 750 in long run. Credit Card is one of the easiest and convenient way to improve CIBIL Score & you should not miss this opportunity.

Hope you liked the post and remember that good CIBIL score is result of good credit practices. It cannot be improved overnight. Beware of agencies or companies which promise overnight improvement in CIBIL Score through fraudulent ways.

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How to read CIBIL Score and Risk Index?

How to read CIBIL Score and Risk Index is one of the most common query. In layman terms CIBIL Score is nothing but risk assessment / credit worthiness of a potential borrower based on past credit history. Though CIBIL Score and Risk Index is the 1st level shortlisting criterion by the Mortgage Lender. Executives of financial institutions who have access to this data are not competent enough to explain the CIBIL Score / risk index to borrowers. It create panic situation among borrowers. 

How to read CIBIL Score and Risk Index?

CIBIL basically divide all Individuals / potential borrowers into following 3 categories. We will understand CIBIL Score / Risk Index in each category separately.

(a)  Individuals with either No Credit History or Credit History not reported to CIBIL.

(b) Individuals with less than 6 months Credit History

(c) Individuals with more than 6 months Credit History in last 2 years

CIBIL Score / Risk Index returned for each of the above mentioned category of potential borrowers is different. Lets check out how to read

(a)  Individuals with either No Credit History or Credit History not reported to CIBIL:

In this category, the index returned is either NA (Not Available)or NH (No History). What it implies is that individual has No credit history and / or Credit History is not reported to CIBIL by the financial institution. NA or NH cannot be classified as low score or poor credit history. It simply means there is no credit activity registered or reported. Now one whose CIBIL index was NA, asks NA or NH is not viewed negatively by the financial institution then why her Home Loan was rejected. Answer is very simple, some financial institutions have policy not to lend with NA or NH index. In short, in the absence of risk index / CIBIL Score financial institution has no criterion to check risk assessment.

(b) Individuals with less than 6 months Credit History

In this category, CIBIL return Risk Index between 1 to 5 therefore as i explained in above mentioned example that 2 is not a CIBIL Score but risk index of the potential borrower. Lets check how to read Risk index between 1 to 5

High Risk: Index of 1 and 2

Medium Risk: Index of 3

Low Risk: Index of 4 and 5

In some cases, the loan was rejected because of high risk index of 2. To maintain good CIBIL score, it is advisable to follow good credit practices from the beginning. It is observed that most of the Low CIBIL Score cases handled by me were outcome of ignorance of a borrower initially. It is always advocated that banks should appoint qualified Credit Counselors instead of executives with not even bare operational knowledge.

                                           

(c) Individuals with more than 6 months Credit History in last 2 years

In this category CIBIL Score is returned i.e. value between 300 to 900. Higher the CIBIL score, lower the risk and vice versa.  High credit score does not guarantee sure shot loan / mortgage. CIBIL Score depend on 70 parameters to arrive at your CIBIL Score. It is critical to find out parameters which are impacting CIBIL Score negatively. CIBIL Score can be linked to credit worthiness of an individual. Lets check credit worthiness

Score between 300 to 600: Very Poor

Score between 600 to 700: OK

Score between 700 to 775: Good

Score of more than 775: Marvelous

Normally people have tendency to compare CIBIL Score / Risk Index. 

One of the most common casualty is Secured Credit Card. In most of the cases, secured credit card details are not reported to CIBIL by the banks. It defeats the whole purpose behind secured credit card. Most of the people opt for this credit card to improve their CIBIL Score or Risk Index. If it is not reported then you should immediately bring it to the notice of a bank.

Lastly, as it is always request that before applying for any loan or mortgage one should check your CIBIL Score / Risk Index to avoid any future shocks. You can take all corrective steps to improve your CIBIL Score / Risk Index in advance. Its a misconception that your CIBIL score is impacted if you check your CIBIL Score. Fact of the matter is that you can check your CIBIL Score as many times as you can. It will not impact your CIBIL score negatively. You can pull out your CIBIL Report online. Click Here to get your online CIBIL Report.

To summarize, It is always advisable to understand the CIBIL Report before arriving at any conclusion. If your loan is rejected you have right to know the reason for rejection. Blanket answer from financial institutions that “Your CIBIL Score is LOW” should be supported by logical reasoning. High Risk Index is not the end of the road. You can always improve your CIBIL Score with good credit practices.

Visit - www.cibilconsultants.com

Source: Secondary

Rewrite Your Credit History For Financial Freedom

In India, most working people start thinking about their retirement after they are well into their 30s or 40s. However, to have a financially strong retired life, ideally one needs to think and also plan) about retirement soon after taking up the first job. That way, time would be on his/her side to build a substantial retirement corpus over the long term through a disciplined investment approach. In other words, time and the power of compounding would give one financial freedom during his/her sunset years. 

So what is financial freedom? "The word freedom evokes a sense of hope, inspiration, choice and joy all at the same time, and could mean very different things to different people ," says Vishal Dhawan, founder, Plan Ahead Wealth Advisors. 

"Financial freedom is something which can give us the same sense of emotions of liberation for the money side of our life," he adds. However, according to Dhawan, you need to remember that financial freedom is not a gift, but an achievement. "We have to put in active efforts to achieve this phase of financial freedom in our lives," he says. 

To achieve this goal, Dhawan suggests a few easy-to-achieve steps. These are knowing your exact financial position, crystallizing your goals, building a road map to reach those goals, followed by concrete action according to the road map, then sticking to the plan and, lastly, reviewing the plan periodically but not too frequently .

"These steps may not give you financial freedom tomorrow but remember that, just like a journey of a thousand miles begins with a single step, your journey towards financial freedom begins when you firm up your mind about achieving the same," he says. 

A related article by Vikrant Gugnani details the steps you need to take to have a financially independent life over the long run. 

Leaving positive footprints 

Here, we give you some idea about another aspect related to your financial dealings that can have substantial bearing on your financial freedom: Your credit history (called credit footprint) and why increasingly it is becoming important in every individual's life. As the term suggests , the credit history of an individual is that person's track record of dealings with various institutions like banks, home loan and other financial services firms and also other companies where an individual may have left some monetary dues — like telecom service providers, etc — knowingly or unknowingly . Put simply, if your credit history is good, you are always in a sweet spot to easily avail of loans from a lender or get a credit card from a card-issuing institution . On the other hand, if your credit history is bad, you may have a tough time getting a loan or a credit card. According to Mohan Jayaraman, MD, Experian Credit Information Company of India, individuals need to be very careful about their credit histories. However, the reality is that not many people are careful about the same and, over the long run, this may affect the financial life of an individual. 

Taking care of your history 

According to Jayaraman, the first step is to take out a consumer report from any of the four registered credit bureaus after presenting appropriate know your client (KYC) documents like a PAN card, driving licence , Aadhaar card, or some other government-approved proof for an individual and his/her address. There are four sections in this report. The first is the demographic report in which there will be the name, age, address, etc. You should check if these things are correct, or get it corrected in case of any wrong entry. The next section is the credit summary which gives details about loans, credit cards, etc, that you have taken. 

The third section is called the credit tradeline where the status of the loans, credit cards, etc, is given. The report will also give you data about how many credit cards you hold and the status of each. It could be that you may have used a credit card many years ago but have not cancelled it, although you think it was cancelled. 

As a result, some huge dues may have piled up in that credit card account . In such a situation, you need to correct the tradeline data. 

The fourth section is about the number of enquiries the credit bureaus got about your application for loans, credit cards, etc. In other words, it gives the whole summary of the number of times you have gone to banks and other lenders for loans, credit cards, etc. 

For a smooth financial life, although the first priority is to have a disciplined and well thought-out long-term investment plan, having a good credit score, which comes from a solid credit history, is also essential, according to financial advisers. 

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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

Cost of living and your credit

You know that where you live matters when it comes to your disposable income. Cost of living makes a big difference in your budget. But can it also impact your credit? You might be surprised at how your cost of living might also matter when it comes to your credit. When you have a high cost of living, your income might not keep up with your expenses, and for many people that means debt. If your debt becomes unmanageable, that can, in turn, affect your credit.

Borrowing to make ends meet

Living in an area with a high cost of living means that you might have to compromise, looking for ways to reduce your expenses so that you don’t exceed your income. If you live where things are cheap, you may not have to compromise.Where you live changes the way you approach your finances. Your situation changes either how you compromise on your wants and desires or your credit score. You choose how it’s going to go.

Applying for credit

The process of applying for credit is the same, no matter where you live. However, the cost of living in your area can impact the type of loans you qualify for, and the rates you receive. If your income doesn’t quite provide you with enough leeway when it comes to your cost of living, some lenders might disqualify you based on your income. You might be forced to apply for credit at lenders willing to take on more risk, but you will need to pay a higher interest rate. 

Additionally, if you have been borrowing to make ends meet, and you’ve already racked up debts that are impacting your credit score, it can make it harder to get approved. Where you live cannot so much change the way you apply for credit, but your need for it may vary if costs are higher.

In areas with a high cost of living, you might also have to limit what types of loans you choose to take on. High-cost areas tend to have very expensive homes. Buying might not make sense in these areas due to prohibitive costs. We discovered that it would cost you three to four times as much to buy a home comparable to what we you before. On the other hand, the rent on an apartment with slightly less square footage (250 square feet) than your old home is “only” about twice your mortgage . Your decision to avoid mortgage debt while you live in a higher cost area will also likely eventually impact your credit, since part of a credit score is based on the types of credit you have — and a mortgage counts for a lot, especially if you pay it on time each month.

You might also decide to avoid buying a car in an area with a high cost of living. I know several consumers living in major metropolitan areas that don’t bother with cars. Car loans are expensive, and cars come with maintenance and repair costs, as well as insurance costs. Taking public transportation costs less than owning a car in many major cities with high living costs. 

Choices you make about what types of credit you apply for can help you avoid getting in over your head with debt and ruining your credit in the long-term.

Manage your cost of living for the benefit of your credit 

Even if you live in an expensive place, you can find less expensive options or alternatives within that place. Some of the suggestions for reducing your cost of living in an expensive area include:

• Buy a certified used car rather than a new car
• Buy items off-season
• Use coupons
• Shop sales
• Buy used and at thrift shops
• Share living quarters when applicable

Managing your cost of living can help you avoid the need for debt to finance your lifestyle. If you can’t or won’t move to an area with a lower cost of living, you’ll have to make adjustments to your spending to avoid getting into a situation where your cost of living destroys your good credit. Generally speaking, do not finance things for daily living.You must plan ahead and be a smart consumer.

Source Secondary

What Your Credit Score Range Means?

Credit score ranges can sometimes be confusing. The best way to determine if you have a good credit score is to use the credit score ranges above as a guide. This is similar to how lenders and credit card companies will look at your credit score to decide whether to give you a loan or not.

Credit Score Ranges

• Excellent 780+ – With an excellent score of 780 or higher you will get the best rates available.
• Very Good 720 – 779 – This is a very strong score and you shouldn’t have any problems getting good rates.
• Good 680 – 719 – This is a good credit range to be at, but you won’t get the very best rates.
• Average 620 – 679 – Your score could use some improvements but you should still be able to get decent rates.
• Poor 580 – 629 – A credit score in this range indicates that you’re higher risk and might have trouble finding decent rates.
• Very Poor 579 or less – Anything less than 580 means that you’re very high risk. Don’t worry though, this can be fixed.

When your credit score is under 750, you probably have a negative entry like a late payment. The easiest way to quickly improve your credit score is to get that negative entry removed. If you’re the type of person who would rather have a professional handle it and just be done with the whole thing,visit www.cibilconsultants.com. They’ll take care of you. 

Moving Up The Credit Score Ranges

Like I said, don’t worry if your credit score is sitting at the lower end of the credit score ranges. You can improve your credit score in no time if you dedicate some time to learning about how credit repair works. Take experts advise @ www.cibilconsultants.com
Hurry ! Book an appointment now !

Follow these steps to check your Credit Score

Credit Score represents the progressing status of your lending amount accounts over a period of time. CIBIL is credit report agency that provide you a credit score. It ranges from 300-900(CIBIL). Having a higher score means there is less risk for the lender. The Credit Score/Credit Rating can vastly impact the interests you pay for loans, insurance or mortgages.

Having an idea of your credit score is vital before you plan to get a new credit card or a loan. The lenders understand your Creditworthiness by your credit score. CIBIL score or credit score is the notation used mostly to represent the score.

Here are the steps:

1) Call or log on to www.cibilconsultants.com

2) Fill in the details on the appointment form

3) Upload all the require details/documents.

4) Pay Minimum charge for comprehensive credit report.

Once you get your credit score, make sure you repay/close any lending accounts that are still pending. Build yourself a credit healthy future by analyzing your credit score and relying on a good credit agency.

Youth and The Credit Score

Westernization is developing its roots in India. Like western countries our country's youngsters are slowly moving towards becoming financially independent at a young age too. Also, increasing is the importance of credit transactions in India. Nowadays almost all transactions involve the use of credit cards, unlike the earlier use of cash everywhere. Almost everything can be paid online now with the help of credit cards. So, everyone has a credit card these days. Therefore, it is necessary for young adults to know about credit scores as these credit cards will impact their scores and low credit scores or no credit history may pose a hindrance in getting a loan approved in future. So, it is advisable to start building credit responsibly as early as possible. The basic things for youngsters to know about building credit responsibly.

Credit score & it’s Effects:
First and foremost try to understand what credit score is. Credit score is evaluating the probability of an individual paying back the money he/she borrows.

Your credit score affects a lot of factors in your financial life. Whether it is getting a loan or getting a job. If you are aiming for a job in Finance, almost all companies check your credit report. Your credit report could give you an edge over another applicant who is neck to neck with your job.
In loans, lenders calculate the credit risk from your credit report and then decide whether to give you loan. So the lower the score, the lower your chances of getting a loan.

Get a credit card:
Credit cards can be a good way in getting yourself a credit history. Because no credit history means no credit score. You could start with asking your parents to get yourself authorized in their card; their history will get added to your history or you could also get your own card. Lots of student credit cards are available which have low credit and income requirements.  But keep in mind to use it sparingly. Don’t keep balances and interests pending. By doing all the payments responsibly you are building a history of responsible use and maintaining a good credit score.

Keep checking your credit reports:
Checking your credit reports at regular intervals is a very good habit to instill in young adults. Credit bureaus like CIBIL, Equifax, Experianand  maintain a record of individual’s credit activities and make credit reports. Checking your credit reports will help you in spotting any errors or mistakes in it and getting it fixed. Getting your mistakes fixed may take a few months, but it will be worth the effort in the future when you apply for loans.

Beware of Identity thefts:
If you are offered a credit card and the people in question are asking too much personal information be cautious you can get involved in identity theft. See to it that when you are providing information do it through a secure form online or in front of the company to whom you are providing. Don’t give away information where your information would lie down on a stack on the desk and anybody could access it. Know about the people who you are giving information to, find out whether they are trustworthy or not.

We can help you build your credit score, just visit www.cibilconsultants.com and book an appointment with experts.

Source: Secondary

No credit to credit in easy steps !

Has your loan application been rejected because you don't have any credit history? So how do you build your credit history? Well, yes, it's a cycle of credit and credit again!

As per two recent notifications by the Reserve Bank of India, all banks and other lenders need to take into account credit information reports or CIRs from one or more agencies in all lending decisions and account opening. However, a loan application should not be rejected just because the applicant has no credit history. So, let us get going and look at the 3 ways that will help you build your credit history.

1. Apply for a secured credit card 

A secured credit card is backed by a savings account or by a deposit used as collateral on the credit available for the card. As you keep paying your outstanding dues on time, your good credit behavior will be reported to the credit bureaus. And this good credit behavior will help build your credit history.

2. Become an authorized user

Become an authorized user of a family member's or spouse's credit card - it should be one of his/her oldest credit card accounts. But do make sure this 'someone' repays outstanding dues on time. After you become an authorized user, you will have access to some form of credit. Once you have that, make sure you make 100% payment of all your dues on time and don't spend beyond what you can repay.

3. Check your credit score

Do check your credit report for your latest score. For an individual with no credit history or who does not have enough credit history, the score generated is NA or NH (CIBIL score). Typically, conservative lenders could view NH negatively as per their credit policies of not lending to an individual who has no track record. But an aggressive lender with a higher risk appetite may approve your credit application. Hence, look for lenders where you may have a better chance.

We hope you will be able to build a good credit history with time. Just make sure that you do not apply randomly for credit facilities as this indicates a credit-hungry behavior. Also, too many inquiries are viewed negatively by lending institutions.
visit www.cibilconsultants.com to check your credit score !

Source: Secondary

Side effects of using multiple credit cards !

Credit card companies come up with tempting card offers for investors, albeit now more cautiously after the financial markets turmoil, by offering freebies such as life-time free credit, among other things.

Customers already possessing credit cards often find themselves taking up such offers and ending up with multiple credit cards. The moot question here is, should you be content with having one credit card or does it make sense to have multiple credit cards and if so, how many are enough?

Let’s understand what the benefits and pitfalls of having multiple credit cards could be.

Why would one need more than one credit card?

Credit Limit: If you feel that your credit limit on the single card doesn’t suffice, then you may need more than one card. Nevertheless, remember, if you have a good payment history, credit card companies reward you by enhancing your credit limit, which may eliminate the need to go in for one extra card.

So make sure you make your credit card payments on time- the benefits are manifold. You credit score will not get adversely impacted, you will not have to pay high interest on your card and credit card companies may enhance your credit limit.

Convenience: At times, merchants do not accept all cards, for example, some may accept only Visa or MasterCard. So if you have only one card, you may face inconvenience. Also, sometimes your card may get rejected for technical and other reasons. So a back up is required.

Fraud Protection: If you use your credit card for online transactions, for fraud protection, you may find it useful to use only one card for such purpose and restrict the credit limit on it, so that even if your card details are hacked, the extent of damage is limited.

Benefit-oriented cards: There are some cards which provide maximum privileges or a good deal if used for a particular purpose such as petrol purchases or air miles. You may want to take advantage of the same and therefore have a card for that purpose only.

What are the drawbacks of having multiple cards?

Credit history: Maintaining a clean credit history is becoming increasingly important with credit bureaus, like Cibil tracking your payment. The probability of missing a payment date is higher if you possess several credit cards as you will have to keep track of the payment date of each of the credit cards. If you renege on your payments, your credit history will be get affected, which will adversely impact your credit score and your ability to get loans in the future. Multiple credit cards require you be to very responsible.

Purchasing Power: Credit cards give you the purchasing power as you do not need money in your account to make a purchase. If you are impulsive, then having multiple cards can prove to be a recipe for disaster as you may spend without thinking of your repayment capability. That will result in postponement of payments and over a period of time, accumulate into a large debt.

Effort: Managing multiple credit cards is an effort because it requires a proper schedule, which you need to figure out and keep a tab on. You need to keep track of the payment dates, the interest free period and the credit limit.

There is no clear cut method that determines how many cards are enough. One may not suffice, because you need a back up just in case your credit card is not getting accepted for whatever reason and also for various other reasons as stated above. But at the same time, having too many cards requires you to act responsibly so that you do not tarnish your credit history and find yourself in a financial mess. So, the next time you receive a call for a credit card, ask yourself whether it adds any value for you and whether you will be able to manage it responsibly!

For ascertaining credit score and maintaining credit report visit www.cibilconsultants.com and book an appointment now for expert advise.

Source: Secondary