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.

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Apprehend your Credit History

Credit history is an individual’s or company’s records of his past borrowings, repayments, other payments and bankruptcy. It is basically all the past records of your credit life. Credit History plays a very important role in building up your credit score and that is why it is important to understand your credit history.

All the factors affecting the CIBIL score are somehow or the other related to your credit history. Having a good mix of credit in your credit history forms 10% of your credit score.  You should’ve taken a good mix of unsecured and secured loans including home loans, auto loans, personal loans etc. to score higher in your credit report. Not only taking loans but servicing them in time also affects your credit score. You should have timely made payments as part of your credit history so as to get a good score.

The other factor which gets affected by your credit history is the length of your credit accounts.  The longer your credit history, the better your credit score. That is why it is recommended by most people not to close old credit card accounts which have been going on for a long time, as it brings down the average length of your credit history. 

But also be aware that defaulting on your payments and bankruptcy stays on your credit history for a long time too and negatively affects your credit score. Therefore, making timely repayments and servicing your debts responsibly for a long time is the way to a good credit history which in turn is the way to maintain a credit healthy life and a good credit score!

Learn about credit score and apprehend your credit history by just booking an appointment at www.cibilconsultants.com

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Significance of good credit score !

Now that we have talked enough about what is a credit score, why credit score is important and how credit score can help us. Now the main question is what should be a good credit score?

Starting from the beginning, a credit score is a three digit numerical figure which is derived from your data-rick credit report. It is a critical factor for lenders to determine your creditworthiness for a loan, credit card or any other credit.

Credit score ranges from 0 to 999 for all the bureaus. The major three credit bureaus in India are CIBIL, Equifax and Experian. The banks and financial provide the information to these bureaus and these bureaus based on the data provided by the banks and financial institutions provide the credit report to them. Basically credit score is a snapshot of the credit report of that individual.

Talking about a good credit score, a score more than 750 is considered to be a good credit score. Individual having a good credit score find it really easy to get approval for loans and credit card. While people with credit score less than 750 struggle to get approval for loans and credit cards instantly.

Below are some questions that are important to know about credit score:

How is credit scores generated?

Credit score are generated based on the factors such as payments histories, debt level, types of credit and length of credit accounts which are pulled out for their credit report. These factors will determine if the consumers will pay their dues on time or not. So, a credit score summarizes the information in your credit report, which makes it easier and faster for a lender to process a loan application and make a determination.

Benefits of good credit score? 

A good credit score will help you to take credit for a car or a home or get a credit card at a comparatively lower rate of interest. This means that you will have to pay less money towards interest.

Ultimately having a good credit score will only benefit you and having a poor credit score will only damage your credit profile.

Improve your credit profile by improving your credit score. Opt for service packages available at www.cibilconsultants.com

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Use Your Balance Transfer Card Wisely

Balance transfer cards are cards that offer very low or zero interest rates. If you have high-interest debts to pay like loans, credit cards then you can go for a balance transfer card to preserve money on the high interest rates. You can transfer your due balance to a balance transfer card with a low or zero interest rate and pay off the balance without worrying about the interests piling up. But to get approved for a balance transfer card, you need to have a good score. A good CIBIL score also helps to get the balance transfer deals. But you should also know that balance transfer cards have an expiry period ranging from 3 months to a year.

So how should one use a balance transfer card wisely? 

Your main aim should be paying off that balance before the low interest rates for the balance transfer card expires and interests start piling up again. Don’t transfer a balance if you are not sure of paying off the debt before your low interest rate expires. Transferring a balance when you are not sure about paying it does more hurt than help because in the end you’ll be stuck with a bigger interest rate than the one in last account, once your low interest rate expires.  You would lose money than, what you were thinking of saving, while transferring the card. Make sure you understand all the terms and cinditions of the card before you make a transfer. Try to get the lowest fees & lowest interest rates and the longest period of time.

Balance transfer card don’t make the balances go away- they optimize your debt by making it less expensive for a limited period to help you pay it off. 
So, follow these steps and use your balance transfer card wisely!

For any assistance regarding credit score visit www.cibilconsultants.com

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