Low credit score can be fixed !

Credit health improvement firms handhold customers through each stage of their programmes till their credit health is enhanced

Almost a year ago, a customer was running from one bank to another, desperately looking for a mortgage loan. But his application was getting rejected by all banks, one after another. Then through some of his friends he came across a professional company that worked in areas of improving one’s credit health and he in fact signed up with this company. His credit score at that time was 623, forcing most private banks refusing to lend him. He then had to go to a known NBFC (non-banking financial company) for a loan and managed to get his loan done at the rate that was 1.5 per cent more than what private banks were offering.

Obviously that meant that he would have to shell out close to Rs 15 lakh over a period of 20 years. The professionals then worked on his credit health and got his score up to 815. Now he is going in for a loan with a MNC bank at a much lower rate.

The same company came across another customer, whose credit report had a delinquent account tagged, which he claimed was not his. He didn’t know about this and had applied for loan for his son’s education. He had already visited the bank and also the bureau to get it rectified but nothing happened. After trying all by himself for months, he had to sign up with a professional company, which in turn, helped him get this account off his credit report and now he is getting to send his son abroad for higher studies.

These two incidents will have to be seen in the wake of the fact that Credit Information Bureau (India) or Cibil, founded in August 2000, has now been playing a critical role in India’s financial system. Whether it is to help loan providers manage their business or help consumers secure credit faster and at better terms, the use of Cibil’s products have led to a massive change in the way the credit lifecycle is managed by both loan providers and consumers.

Cibil collects and maintains records of an individual‘s payments pertaining to loans and credit cards. These records are submitted to Cibil by banks and other lenders, on a monthly basis. This information is then used to create credit information reports (CIRs) and credit scores, which are then provided to lenders in order to help evaluate and approve loan applications. Credit score and CIR not only helps loan providers identify consumers who are likely to be able to pay back their loans, but also helps them to do this more quickly and economically.

This translates into faster loan approvals. Cibil officials said that the bureau works towards catalysing growth of credit in the country through solutions that enable well-informed credit decisions, technology that enables superior information availability and people that provide high quality services. The importance of an individual’s credit score or credit health can therefore be hardly over-emphasised.

Credit health is a state of complete financial well being. The absence of indebtedness merely does not necessarily mean being credit healthy. Optimum utilisation of the credit facilities to leverage yourself without falling into a debt trap is necessary for your social as well as emotional well being. Credit health has several components including a good track record, a good credit score, good income-expense ratio, absence of delinquency, healthy debt burdens loads, the ability to access credit on favourable terms and a host of other parameters that Cibil and other professional companies have researched over the years.

Credit score has relevance in almost every facet of life from loans, rates of interest on loans, telecom connections, jobs, rental markets through to insurance premia. People have now started checking credit health of their would be spouses before marrying and before renting out their flats / houses to future tenants.

An individual’s credit health is measured by a three-digit number on his bureau report. Higher the score, the better is his credit health. A score of 750 and above is considered good. A person’s credit history is a record of how he/she has used and managed credit in the past. Every financial transaction in one’s life involving credit is recorded in one’s credit history – from one’s payment history on one’s credit card, to one’s history on paying off one’s car loan, to any suits that may have been filed on him/her.

Professional counselors said that everybody makes mistakes. That’s why there is an eraser on every pencil. If an individual is willing to keep walking and walking down the right path, there is no reason why can’t one be shown the right path to enhance his credit, protect his credit and improve his credit health.

Unfortunately, there is limited awareness of the concepts of credit, credit health, credit scores, etc, among the general population. In fact, a recent survey revealed that 86 per cent respondents had not heard about any credit bureau and 92 per cent were unaware of their credit scores. Only 4 per cent had checked their credit scores in the last one year. That’s not all.

Almost 98 per cent respondents could not decipher a sample credit report when they were shown one and 91 per cent people who default on credit are unaware of any of the negative consequences of their actions. Overall, credit awareness and credit protection, according to the survey, are extremely low. But the good news is that as people become aware, they want to improve their scores/credit health.

As individuals approach professionals to bail them out in this regard, these professional counselors in their turn help people renew, revamp and retain their credit health. Their expertise lies in using a combination of analytical tools, a state of the art product suite and multi stage guidance to handhold you through the various stages of a credit life cycle and make you a credit healthy individual.

Various services offered by these trained counselors include: credit health improvement and tracking like compilation of reports from bureau, analysis of reports, error tracking and reconciliation and assistance in loan processing.

Credit health improvement companies offer unique programmes and guidance to assist one to avail loans, credit cards and other credit facilities on more favorable terms through enhanced credit health. To resolve a customer’s credit issue, companies first aims to interpret credit reports accurately. It follows it up with a process of identifying errors with the credit reports, if any, and then does a comprehensive analysis. In the final phase, these companies lay down a detailed roadmap for the customer to improve his or her credit health.

These companies also handholds customers through each stage of their customised programmes till their credit issues are resolved and credit health is enhanced.

The process of credit health improvement, of course, does not come free. Various packages are made available and the key features and charges vary according to the plan. These programmes will, over time, help customers to avail loans, credit cards and other credit facilities on more favorable terms through improved credit health.

The bottom line is credit score is a crucial indicator of an individual’s credit health. Most lenders use it for determining loan payment potential of an individual. Not just loans, but jobs, insurance premiums and so many other important things now depend on your credit score. It is therefore important to remove all discrepancies from your credit report to improve your credit health. Sensitising people about their credit behaviour and score always help them manage their finances well and improve their credit health.
opt for suitable credit health improvement packages available at www.cibilconsultants.com.

Source- secondary

Mortgage and Credit Score

In simple words, a mortgage is a way to use property like land, building etc. as a guarantee to get a loan. Credit score affects mortgage to a great extent as it is one of the eligibility criteria in getting a mortgage loan. The reason for this is that lenders want to make sure that their investment would make profit or at least get recovered. Your Credit score defines what kind of mortgage rate you would get, which would in turn help you identify what kind of home you can afford.

When you are looking to get qualified for a mortgage, your credit score and credit history are the first things in which the lender would be interested in to check your eligibility.

A good credit rating always helps when you are getting a mortgage. Even during financial crisis, people with good credit scores get mortgages with very less down payments. Analyzing your credit report, the lender makes decisions about the terms of qualification of your loan. Therefore building your credit score is the first step you can do to qualify for a mortgage.

Mortgage eligibility credit score recommended is usually above 500. A credit score of 500 to 520 is the lowest what lenders would go, anything less than that would disqualify you for the mortgage loan. People with high credit scores above 750 are the ones who get varied loan choices and also low interest rates.

Your credit history, other than contributing to your credit score, also influences the lender’s decision. The lender would want to see if you have been bankrupt, your payment history and also If you have had any collections. This will help the lender analyse your financial behavior and if you are about paying off debts or not.

Since, we saw above how credit score is important ingesting qualified for a mortgage loan, let us now deal with what a credit score is-

It is a calculation based on credit history which would help in determining your credit worthiness. It is important because it helps the lender figure out if his money would be safe with you or not.
Lenders rely on the information given by  CIBIL to determine whether lending you money is a smart move or not. If your credit is more than 750, then lenders would deem you credit worthy for a mortgage and give you their standard loan options.

Your best bet to get a good mortgage rate is to have a credit score more than 750. A CIBIL score of 500 is bad and would h. Some lenders would also expect you to part with at least 50% of the purchase values if you are trying to get a mortgage with such low scores.

So, all this shows how credit score affects mortgage and how important it is to have a good credit score.For score improvement and repair opt for service packages available at www.cibilconsultants.com
hurry book an appointment now !

Source: Secondary

How Secured Credit Cards Help You Repair Your Credit !!

There’s an age old saying that, “it takes money to make money.” Well, it also applies to credit cards and credit scores, as you have to have a card to rehabilitate your credit score. Of course, if your score is too low, then you will likely be rejected when applying for a card. So, what gives?

If you are unable to get a regular credit card at even a low limit, you may need to look into a secured credit card. Whereas a regular card is unsecured, meaning that the creditor has no collateral that they can recover if you default on the payment, secured cards have a deposit.

Usually, your credit limit is anywhere from half the size of the deposit you make to 100 percent. You leave that deposit with the credit card issuer, then make your payments each month like you would with a normal card. It’s a good idea to pay off your balance each month. If you near or reach your limit, the creditor can freeze the card and keep the deposit to avoid any losses.

By getting a secured credit card and responsibly making the payments each month, you can start the process of demonstrating to the credit bureaus and future lenders that you are capable of making payments on time.

As a result it is vital that you not miss any payments on your secured card. In addition, it’s important to make sure that the company issuing the card will be reporting to major credit bureaus. That’s because if they aren’t, those bureaus will have no way to account for your improved habits.

If you are a good customer with your secured card, it will usually be transitioned over into an unsecured card after a couple of years. In addition, after one to two years of establishing good credit habits with the secured cards, you may be able to get offers from other credit card companies.

For now, though, all you need to worry about is getting a secured card and maintaining the account without missing any payments. From there, things will begin to fall into place so that within a year or two, you should be able to be well on the way to repairing your credit score and having a decent shot at getting any new credit cards or loans you need.

Need help on your credit score ?
visit www.cibilconsultants.com

Secured vs unsecured loans and their Impact on Cibil score !!

It is not uncommon for people to ask about the difference between unsecured debt versus secured debt and how they two types of debt may affect credit scores.Some loans can have the opposite effect and actually damage your score.It is important to for us to understand what a secured and unsecured loan is in the first place. 

If a loan is unsecured, it does not have any collateral. Personal loan and credit cards are the most popular unsecured loans available today.

Any loan that has collateral is considered secured loan for example, a home loan or car loan or gold loan.Any default or delay in the repayment in both kinds of loans is bound to affect the Cibil score of a person. The banks report credit limit and balance on credit card and the loan amount for personal loans. The banks also report repayment information to the credit Information companies.The same is the case with secured credit. The banks repayment all the secured loans held by and also the repayment history.

Secured loans have the largest positive impact on your credit when they are repaid. If you have never taken a secured loan, your credit may be low despite your good record of repayment.

"Non-payment of or serial delays in repayment of credit card dues negatively impact the credit score. Possession of too many credit cards and little or no secured loans can negatively impact the credit score," said Sridhar K, vice-president, Highmark Credit Information Service Pvt Ltd.

So before you decide any changes in the repayment schedule, be aware of the impact of each loan has on your credit score.

For any assistance regarding credit score and loans contact us at www.cibilconsultants.com

source-secondary

Financial decisions impacting your credit score !!

It is not just your investments but also your spending habits that impact your financial future. Most of us are worried about the investments we make and are least bothered about the EMIs that go out of our pay cheque on a monthly basis. It is important to take care of your liabilities as much as you take care of your assets and here is why -

Locking away credit cards: If you have overused your credit card during holiday season so now live a  "cash only lifestyle" for some months and pay minimum amount due on the cards.

Our verdict: Poor! - High interest payments and high utilization. Though on the surface the move to pay minimum amount due looks good, but you need to realize that credit card is the most expensive form of debt and not only you pay huge amount of interest payments, you also have a high utilization on your cards and it can hurt Cibil score. However, locking away your credit cards is definitely a smart financial move!

Using debit card for purchases: Just decide that from now on if you were to make a purchase, use only debit card - Be aware that purchases on debit cards weren't reported to the bureau.

Our verdict: Good! - Yes, the debit cards are not reported to the bureau.Make a smart financial lifestyle choice by using debit card to make a purchase, and be aware that the debit card purchases weren't reported to the bureau. Only your liability accounts - accounts where you are borrowing money from the banks such as - credit cards, home loan, personal loan, overdrafts etc. get reported to the Cibil or other bureaus in India.

Enquiring too often for loan application: The first time you got your loan application rejected,  anxiety took over and you applied to three other financial institutions through a third party. The third parties guaranteed you that they would get home loan approved.

Our verdict: Poor! - No third party can get a home loan when you are not qualified to get one. When you got your home loan application rejected from the leading private bank, you should have looked into the cause of application rejection rather than trying your luck elsewhere. Like everything else in life, the easy route is never successful. You should have approached the bank, gotten a copy of your Cibil Report and taken corrective measures before approaching a different bank.

 we find many customers struggling with their loan application rejection. Don't wait till you are impacted because of your low Cibil Score. Get it repaired with the service packages we offer at our website www.cibilconsultants.com.
Hurry book an appointment now !!

source-secondary

Does Your Credit Score Affect Your Self Worth?

Question mark on Creditworthiness of a person does impact a person's self esteem.
Let us read through a story for a better mindset.

Rahul got online today after an awesome vacation and found a  statement in inbox. He finally met long-term credit score goal of 775. Wow… it was sort of a shock. Don’t get him wrong, it feels great, but when you finally hit a goal you've been working towards for literally years, it’s almost unbelievable.

It got him thinking about the past few years and all the ups and downs he have been through on his personal journey. In particular, he started thinking about how having bad credit affected his self-esteem. Bad credit is something that’s always looming in the background of your life. Maybe you don’t think about it all the time, but when you do, it feels terrible. For him, it was like this mark on his reputation that said “This person cannot be trusted”, even though he knew this wasn’t the truth.

So I suppose in that sense, it does affect your self-esteem. Nobody wants to feel like they can’t be trusted, or they are a deadbeat who doesn’t pay their bills –especially when the whole picture isn’t clear on a credit report. If lenders actually knew you, I’m sure it would be a different story.

Back when his credit score was in the low 500’s, he applied for his first secured credit card designed to help people rebuild credit. It was approved. This was the card used to really kickstart his credit improvement journey. Within months, his score was up 50 points.

The thing is, because this card is designed specially for people with bad credit, they pretty much approve anyone. Nonetheless, this approval, for Rahul, felt great. After being declined again and again, this little approval gave him the confidence he needed to continue his credit improvement journey.

Want to repair your bad credit score? Is it impacting your creditworthiness? Tired of being rejected?

Dont worry.We can help you with your discrepancies !!

contact us through our website : www.cibilconsultants.com