Avoid home loan rejection this way.

Real estate is the most coveted investment instrument in the country. Buying a home, whether for investment or residential purposes, can take years to materialise and given the prices, few can afford to pay the money upfront. In such situations, buyers inevitably turn to banks for home loans.

Although the norms for approving home loans have eased in the recent past, don't expect it to be a cake-walk. One small mistake can result in you merely dreaming of the house, and never actually owning it. 

We look at factors that can play a crucial role in getting your loan approved or rejected.

                         

BAD OR LOW CREDIT SCORE

You cannot build a house if the foundations are flimsy, right? When it comes to loan approvals, banks use a similar analogy. If you have a low credit score, you will be denied a home loan out rightly even if you fulfill all other conditions. Credit score is considered to be the most important factor by the banks while disbursing a loan. 

Credit score reflects a consumer's behavior towards the financial transactions. In some ways, it is a mirror to his financial habits and underwriters base their decision and develop risk-based pricing based on the credit score.


So, if a person has defaulted or delayed the payment on any kind of loan or credit cards, it will have a negative impact on the credit score. Other factors like being guarantor to a person who defaults on payment of his loan can affect your credit report too if you fail to repay his loan. So, be very sure before taking up the role of a guarantor. There are credit rating agencies like CIBIL, Experian Credit Information Corporation of India, Equifax Credit Information Services and High Mark Credit Information Services that provide credit score to individuals. Once you submit your loan application, the lender seeks a copy of your credit report from the bureau. They analyse this not only for the credit score, but also to review the extent of existing loans / credit cards, performance of ongoing and closed loans. All these go in to the final assessment of your loan application.

A credit score provided by CIBIL is a three-digit TransUnion score which is derived from the credit history found in credit information report (CIR). A CIR is an individual's credit payment history across loan types and credit institutions over a period of time. It ranges between 300 and 900. It indicates the probability of default of a borrower based on their credit history.

To maintain a healthy credit score, one should ensure timely dues payment and avoid taking too many unsecured loans as it may be considered negative. But if the damage is already done, you can work towards improving it slowly. 

INCORRECT PERSONAL DETAILS IN CREDIT REPORT

Your credit information report contains your personnel detail, so wrong information can lead to a mismatch between the details on your loan application and credit report and hence lead to your loan rejection. If there is any change in the personal details, you must update your lender so that it is reported to the credit information bureau and is reflected in your credit report. Any individual can get the credit report for a nominal fee from the credit bureaus.

However, it is important to check the report for anomalies like a credit card listed in your report but not owned by you, or a loan on their name which they had never taken. Prospective borrowers can also apply directly to the credit bureau for their credit report for a nominal fee. This allows you to review the facilities listed against your name, seek corrections if you spot any anomalies like a credit card listed in your report which is not yours and to know your bureau score. All bureaus have dispute resolution forms on their websites which aggrieved customers can fill and send with relevant identification documents.

REJECTION OF LOAN BY OTHER BANKS

Some people tend to apply to multiple banks at the same time. However, remember that if your loan is rejected from one bank then it can have an impact on your credit score and hence lead to the loan being rejected by other banks too. It is better to wait for the reply from one bank before applying to another so that you know why your loan is rejected and get the same rectified.

NEW OR UNSTABLE JOB

Since the repayment of loan is of utmost priority to the lender, they would like to ensure that you have timely repayment capabilities when he disburses the loan. In case of salaried person a steady flow of income is determined by the stability of job. Since repayment of home loans is normally sanctioned for 15-20 years, stability of income in future becomes a necessary criterion to be assessed at the time of loan sanction. For example, if the borrower has a contract of employment with just eight months left in it, it is natural for the lender to enquire if the contract has been renewed in the past or whether the borrower holds any professional qualifications which would give comfort that alternate employment would be forthcoming.

It is a similar story when it comes to changing jobs. While it may give the buyer a higher income level, it gives a negative impression to the lender. It is generally advised not to change your job if you are planning to take a home loan in the near future. In fact, the financial strength of the employing company is also considered as one of the factors for the evaluation of the application. People working in a proprietorship company, having less than 50 employees & not having provident fund facility, face issues in getting a home loan.

AGE FACTOR

Age is one of the most important factors considered by the lender while disbursing a loan. Typically, they put a minimum age bracket of 23-24 years and maximum limit of 60-65 years for loan applicants. Assuming a 22-year-old, who has been working for the last three years, applies for a home loan and the qualifying criterion for that lender is a minimum age of 23 years with at least two years of continuous work experience, the lender would in all probability turn down such an application.

APPLYING WITH RELATIVES OTHER THAN SPOUSE/PARENTS

If you want to get a home loan of a higher amount, clubbing the income of your spouse is a good option. But while banks allow clubbing of income of the spouse, father and son, the same does not extend to every family member. Some banks are skeptical of clubbing the income of the siblings because in case of a dispute, the EMI could be delayed. Clubbing the income with any other relative is not allowed. Also, a co applicant can't be a minor.

LOCATION OF THE PROPERTY

Banks also make their decision to disburse loans on the basis of the project's location. Take for instance, Noida Extension, where a number of projects suffered due to lack of clearance and acquisition disputes in 2011. As a result, a number of public sector banks stopped sanctioning fresh loan sanctions in the area, as per news reports. All lenders have limitations with the geographic locations. If the property is beyond such limit, the loan will get declined. The technical valuation of properties in remote locations may also be lesser than the purchase cost; banks do try to cover the risk of funding in an under-developed area on case-to-case basis.


UNSATISFACTORY EVALUATION OF THE PROPERTY

You must ensure that you are buying a house at a price which is close to the market price. This is important because the bank does the valuation of the property itself and will give a loan of upto 80% of the property value after considering other factors like your repayment abilities.

UNCLEAR PROPERTY TITLE
In the event that the property does not have a clear and marketable title, or there are issues connected to the approvals from the relevant authorities, normally banks or home finance companies keep the loan sanction letter valid till the customer finds another property which has clear title and approval. So, before buying a property you must ensure that it is not involved in any dispute.

LACK OF REPAYMENT CAPABILITIES

Banks ascertain your repayment capabilities before disbursing the loan. It depends on the disposable income that is left in your hand after paying off existing EMIs. Banks generally give a loan which amounts to an EMI of upto 50% of the disposable monthly income. So, first assess your repayment capabilities before applying for a loan.

Source: Secondary

Increase your credit limit by exhibiting

Your credit limit may be raised if you exhibit timely and do full repayments. However, having a high credit limit and multiple lines of credit may hurt a person’s overall credit rating. In these cases, new potential lenders can see that the applicant has access to a large amount of debt, which may lower the chances that this person will be able to repay his or her debts in the future. As a result, new potential lenders might be less likely to offer an additional source of debt.

Information required by lenders

Relying upon the credit increase amount that is requested and the length of time the borrower has held the line of credit, a lender may ask for information directly from the borrower, pull a credit report or use information it already receives from the credit bureaus each month. Such information as employment status, income and housing expenses will be requested of the borrower. The lender may also look at the borrower’s payment history, including whether payments are made on time, how much credit is regularly used and how often the balance is being paid.

What influence your request?

Your request could be affected negatively for a credit increase if you are subjected for making late payments from the previous six months; whereas monthly payments that are a higher percentage of the balance have a favourable effect. The financial institution considers the client total amount of debt; the number of other lines of credit; the number of other requests for credit that have recently been reported to the credit bureau.

Conclusion

In case, your request gets refused then a credit increase may negatively affect your credit score, because the request is reflected in your credit history for a short time. If a request is denied because the current amount of credit is too high, then an increase can be requested again once some of the balance has been paid.

Source: Secondary

Financial health implications

No matter how reputed and reliable your brokerage house, bank and financial planner are, remember that it’s your money. Get involved. They will keep coming to you with numerous tips that they say are ideal for you; they may hard sell the products that they have to offer; they make call after call and send you mail after mail extolling the benefits of strategies. While considering everything that they say, do your homework and finally settle for what you think fits your portfolio requirement.

Here are a few simple snippets which will help you bring financial disciple in your life.
             

Never buy a product which you don’t understand

No matter what the company’s sales representative promises you or convinces you to believe, never put your money on something which you find too complex to fully comprehend and whose benefits you are not convinced about. So, first clear any doubts that you may have with the sales person and only then agree to buy it.

Shop for the best deal

If you are investing in a financial product, whether it is a loan or any other funds, involves your hard earned money. So it is important that you take time off to look at various options available in the market, compare them and then take a well-informed decision while choosing the right product. Each financial entity has its own terms and fees, and it is in your best interest to compare all the choices available and then pick out the best deal for you. A reduction of few basis points in the interest rate of your home loan or personal loan can end up in saving thousands of rupees for you over the long term.

Perform online research

As you get prepared for availing a loan, do not forget to carry out an online research on the best rates and schemes offered by different banks. There are different loan products available in the market as per different requirements. In addition to speeding up the buying process and making it less cumbersome, you also stand a great chance of getting your desired products at discounted rates.

Reveal the hidden costs

When you buy a financial product, you may forget to factor in the hidden costs involved which can influence the total cost of the product. Hidden costs involved vary from one financial entity in the market to another and some institutions may wave these completely, if you negotiate. So, ask the financial institution to give you details on the fees and charges involved.

Negotiate to gain a best deal

Every financial institution has its own interest rates and fees structure for customers which provide some scope to us to bargain for a better deal. However, before sitting on the negotiation table, you need to do your homework and get information on rates and charges prevalent in the market so as to assess the level to which you can bring down the price.

Visit www.cibilconsultants.com

Source-secondary

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.

Source-secondary

Answers to your biggest credit card queries

Are you a credit card savvy? If you are a frequent user of credit cards, there’s a probability you’ll encounter at least one of these problems. Here are some measures which you can follow if any of these ever happens to you.

High rate of interest

Your credit card becomes more expensive if the interest rate is high assuming you carry a credit card balance. If you have an excellent credit score, there’s no reason to pay a high interest rate, especially if you’re getting better offers from other credit card issuers. It’s better to ask for lower interest rate credit card from your credit card issuer.

Billing statement showing unauthorized charges

You’re not meant to pay any billing errors or unauthorized charges. However, the law requires you to dispute billing errors in writing within 60 days of the billing statement being mailed. Reporting the error quickly is important. Many issues can be resolved by simply calling your credit card issuer, but a letter will ensure your rights are protected.

No swipes can be done

The card no longer swipes as sometimes it gets demagnetized. When that happens, the information is erased from the magnetic strip on the credit card and credit card readers can no longer gather the information to process your transaction. So, contact your credit card issuer asking for the new credit card.

Declined credit card

Your card could be declined due to several reasons. You may be over your credit limit. Your card has expired. Or, it’s possible that your card has been cancelled. Always carry a backup source of funding so you can pay for a transaction if your credit card is declined. Soon contact on the number written on the back side of your credit card to find out the reason.

Missed the deadline of credit card repayment

A single missed payment won’t hurt you too much if you realize you missed the payment before the next due date rolls around. You may even be able to get your credit card issuer to waive the late fee if you’re not habitually late. And, making up your payment before it gets 30 days past due will prevent damage to your credit score.
Visit: http://www.cibilconsultants.com
Source Secondary

Credit card hacks!

Why do cyber thieves take the time to wreak havoc? Since hackers are going after the companies that hold your information, it’s hard to stop them from getting your information. All the same, you can take steps to minimize the damage. Here’s our guideline to deal with the uncertainty.

Ask for the new card

Call your bank and demand a new card. It’s not likely to put up a fight as the bank is responsible for paying false charges. In the event that the bank does, don’t back down on your demand.

Renew your password

If you have done any online business with the affected company – or you have an account with it – change your password right away. Make it more than 8 characters and difficult to figure out. If it’s easy for you to remember, it’s easy for a hacker to crack. While you’re at it, change and strengthen all of your passwords.

                    

Filing a complaint

Call the non-emergency number of your local police department. Say that you were a victim of identity theft and wish to file a report. This makes your status as a victim official.

Block your credit

You don’t want anybody opening up new lines of credit in your name. Blocking doesn’t allow anybody to access your credit report without your approval. Creditors probably won’t approve an application without having access to the person’s credit report.

Monitoring your account online

Don’t wait to check it when the statement arrives; check today. Keep monitoring daily for at least 30 days after your new card arrives. If you see fraudulent activity, call the bank and report it immediately. Often you can dispute charges online, but calling and talking to somebody assures that the issuer has record of your dispute.
Visit- www.cibilconsultants.com
Source: Secondary

Error in report? May fall in disputes!

The business of reporting consumer credit is highly regulated. Your Credit Information Report (CIR) plays a large part in the loan application process. Hence, any discrepancy in your CIR may result in reduced chances of a loan approval. Therefore, it is important that the information on your CIR is accurate and updated. You have the legal right to obtain a free copy of your credit report from any of the major credit bureaus once a year, which is a right you should certainly exercise. If you find information that is incorrect, you need to understand which errors you can dispute, along with how to report them.

Your credit report holds information about which companies have granted you credit, how you have managed your loan obligations and who has performed an inquiry into your profile. The only way to spot incorrect information is to review your credit history yourself.

Errors commonly arise for two reasons:

1. Creditor makes a mistake when supplying information to the credit bureaus,
2. Or the bureaus do not correctly compile your otherwise disbursed information from their databases whenever your credit report is requested.

Commonly, these errors result from mistaken addresses, mistyped social security numbers or confusion between similarly named borrowers or relatives.

Disputed fields in your report

Common areas of dispute include listed debts that are not yours, debts that are yours that are not listed on the credit report, debts that reflect an incorrect or incomplete payment history, debts that should have been removed from the credit report due to age and are still listed on your report, and inquiries from lenders that you did not authorize to pull your report.

Resolving the mistakes

The easiest way to fix a mistake is to approach the original creditor that sent the information to the bureau. The creditor is legally required to transmit a correction when it knows that it has made a reporting error, which can save you some unnecessary paperwork. A dispute request can be raised based on either a CIR purchased by you directly from CIBIL or a CIR accessed by the Credit Institution (CI) with whom you have applied for a loan to maintain your federally protected rights, but this is still a faster solution.

The CIBIL is a wonderful resource if you are considering disputing an item. It can help you figure out which items can be disputed and what kind of documentation or other proof you need, and it can supply advice on how to proceed. The investigation is normally completed within 30 days. It is possible that your dispute may not result in a corrected report right away.

 Source- Secondary

3 things to look for in your Cibil credit report

You are advised to check your Cibil report every year. Just like one would take a annual health check up to ensure all parameters are within the normal range and no red flags are popping up, so also one should check the CIBIL report annually i.e. do a financial annual check up.

There are no reporting errors from the lender

You should check your Cibil credit report at least once a year to make sure there are no errors that could keep you from getting credit or best available terms on a loan. You should also check your report before making a major purchase that would involve a loan, such as a house or a car.

While sending information to the credit bureau the lender or the bank could have made some errors in reporting your credit transactions. The first step is to find the errors by actually reading the report and not tossing it in a file after reading the Cibil score. When Lata got hold of her Cibil report and read it she saw it still showed an a outstanding amount of a credit card payment, which had expired and surrendered over 2 years ago. This wrong information was greatly responsible for lowering her Cibil credit score. So if you find mistakes, the immediate action should be to fill out the dispute form for the credit reporting bureau. If the error is actually with the creditor who reported the account, you may also need to write a letter to the creditor or alternatively raise the dispute with Credit Bureau for correction. Maintaining a high Cibil score is essential to a healthy financial future.

Is your identity stolen?

Check your report for any credit applications/enquiries that have arisen there are not made by you.  For instance, if you see a couple of home loan application in your Cibil report that you have not made, it can be a sure sign of identity theft. Look out for signs of identity theft. Alerts for possible fraud include:

• Loan accounts that you have not opened
• Credit inquiries not made by you
• Any late payments or defaults that were not made by you
• Address and Identity information which are not yours
• Phone number reported which you have never used

Incase you suspect an identity theft, immediately report any suspicious information or activity to the credit bureau that issued the Cibil report and to your banks too.

Account information

A large bulk of the information in the Cibil report is your account information - a list of your loans and credit card accounts. This is a good time to review your accounts. You can cross check the various accounts, the credit limit, current balance and payment history. Make a note of accounts that were closed or made inactive by the bank and those that have late payments or negative remarks associated with it. See which ones are active and if you would like to consolidate any of them, organise paperwork in the accounts and in general do the financial housekeeping we tend to postpone.

Source-secondary

Cyber Criminals Behind E-extortion

VADODARA: When you think of cyber crime, you may usually picture a hacker sneaking into networks and installing viruses designed to destroy data and computers. But cyber crime is not just about destroying computers and data for malicious purposes. Instead it is to steal information and data for financial gain.

This is what founder and CEO of Quick Heal Technologies Kailash Katkar said here on Saturday.

Katkar stressed that cyber criminals are not just making money and robbing hard-earned money of victims, their well-networked underground activities are making even the corporate sector victims.
        

"These cyber criminals work from countries which do not have strong cyber laws and are fully involved in extortion activities. They are constantly finding new ways to make money off innocent people," said Katkar, a school dropout, who created a Rs 187 crore anti-virus software business with a seed capital of Rs 15,000.

"In fact, our threat research and response team receives over one lakh unique virus samples on a daily basis. Just six months ago, our team used to receive nearly 75,000 unique virus samples and with the passage of time this number is expected to increase," said Katkar, who in 1985 had taken up a job at a local radio and calculator repair shop to supplement his family's income.

Talking about the growth of anti-virus software industry in the country, Katkar said last year, the total market was estimated at Rs 800 crore.

"The anti-virus software industry is expected to grow because of the penetration of smart phones. While internet is costly in India and computer penetration is still much lesser compared to the developed nations, penetration of smart phones has increased tremendously. This has led to development of security solutions for mobile devices," he said.

"Computers have been able to reach to only 10 per cent of our total population against 70 to 80 per cent PC penetration in developed countries. But penetration of smart phones has increased by over 100 per cent," he said.

'Americans can be easily hypnotized'

Vadodara: Americans can be easily hypnotized compared to any other population in the world. This is what world's most experienced hypnotist and world's first ever hypnotist to appear on television Andrew Newton believes.

"My experience suggests that Americans are the most regimented people on this planet. You can find them standing in queue everywhere and getting all kinds of permits to do small little things," said Newton adding that in contrast the Australian population is a bit aggressive and difficult to be easily hypnotized.

"The United States government is easily looking into emails and text message of its citizens in the name of freedom, democracy and security threat. This spying has a commercial aspect too as the same data is used for targeted election campaigns," said Newton, who has hypnotized over 60,000 people worldwide, including many famous names in the United Kingdom and abroad.

Newton, who has over 6,000 stage and television performances under his belt, said that in the UK like in the US, hypnotism has become a massive industry.

"Thirty years ago, there were just 400 hypnotists in the UK. Now, there are over 4,500 hypnotists, including those enrolled with the UK's national health scheme," said Newton, a senior lecturer in hypnosis at the Hypnoseakademiet in Norway, Europe's premier hypnosis and EFT training school.

"The word 'hypnosis' has always brought a sense of mystery and magic in our minds, but it is a complete science of the subconscious itself. It can't cure cancer but it is very useful for dealing with stress or combat insomnia," he said.

To learn about Identity Theft, contact www.cibilconsultants.com

Source: Secondary

Risk appetite check using credit scores, by Telcos

Your credit score and credit information are your reputational collateral which reflects your credit behaviour and provides an indication of your debt management capacity. Postpaid telephone connection is an alternative form of credit. Which means, through a postpaid connection, the telecom service provider gives us an advance credit facility and trusts us to make the bill payment of our usage, by the due date.

In some countries, telecom service providers are using credit scores and credit information for making instant decisions on postpaid telephone service applications to grant on spot telephone connections to consumers. When you apply for a postpaid telephone facility, the service provider will pull your credit score and credit history which gives the information provided by you in the application. Your score will enable the service provider to assess your financial standing and project your likelihood of paying the postpaid telephone bills regularly. Once the telecom service provider runs know your customer (KYC) check on your documents and is satisfied on your payment capacity, they will be able to grant you the postpaid telephone service instantly.

          

Credit score is also being used by telephone service companies to evaluate the “risk appetite” of the consumer and assign “credit limit” as per the credit behaviour of the consumer. Value added services may also be offered to consumers based on their credit score.

In developed economies, an individual’s credit information report and credit score are very critical reputational collateral and is being used for multiple purposes by various institutions. Employers review it before recruiting a new employee; landlords require it before renting out an accommodation and of course telecom service providers check an applicant’s credit history before providing a postpaid phone connection. In the future, a person’s credit information report and credit score will be imperative for a lot many things in addition to availing institutionalised credit facilities.

Therefore, it is important to maintain financial discipline and prudently manage all your financial obligations in order to build and maintain this vital reputational collateral that will become critical for a lot of transactions in the future. Review your credit history and credit score frequently to start developing this reputation collateral.
Source: Secondary

Banks seeking insurance cover because of rising online frauds

MUMBAI: Indian banks are increasingly seeking insurance cover against fraudulent online transactions, including those involving credit cards, as a rising use of plastic money and the ease of Internet business potentially increase lenders' exposure to cases of data breach.

Data from insurance companies show that large banks are opting for policies worth Rs 500 crore to shield against fraud, including online, while mid-sized banks are going for policies in the range of Rs250-300 crore. "Demand for insurance policy against phishing, skimming and Internet hacking has gone up in the last one year," said TR Ramalingam, head of underwriting at Bajaj Allianz General Insurance. "Inquiries have gone up and we are working on how to price the product and working on the wording."

               

Earlier, insurance policies did not include computer-related frauds, but now insurers expect it to be big in coming days. The premium, which depends on several factors, ranges between 1% and 2% of liability the bank is looking to insure. In 2012-13, domestic banks lost Rs17,284 crore on account of fraud, according to information obtained through the Right to Information Act. During the period, 62 banks filed a total of 26,598 cases related to online frauds. The situation has compounded the woes of the bank sector where lenders are facing huge non-performing assets. "The policy covers cyber extortion and breach of data privacy," said M Ravichandran, president, Tata AIG General Insurance. "There is a lot of talk around cyber insurance and people are actively looking to secure these exposures."

While companies like Tata AIG have underwriting capabilities for these policies, for others, it is reinsurance driven. Cyber extortion policy pays a ransom to a person who has hacked into the bank's website with a threat to divulge, destroy or steal confidential information. Last year, ATM cards of a leading private sector bank's customers were skimmed and about Rs15.48 lakh stolen from accounts.

If your Credit Score have been hampered because of Identity Theft, contact us- www.cibilconsultants.com

Source: Secondary

Biggest Misconceptions About Credit Score Debunked

Bangalore: Nowadays to apply for a loan or credits it has become mandatory that you should have a high credit score. According to rating on your credit scores the insurance companies, cable companies and even utility providers will decide on the rates or deposit amounts that will be charged on you. But often it is seen that like many other important things in life, even the credit scores are often misunderstood. There are many myths about the credit card scores that are going around about what hurts or improves.

Let’s have a look at seven popular myths about credit scores and credit reports:

I cannot check my credit card report as it will hurt my credit card score : 

There is no harm in checking your personal credit report. Usually while you review your own credit report that is called as a “soft pull,” or “soft inquiry,” that will be seen on a personal credit report and in addition to that this will have no impact on your scores.  It is advisable that everyone should at least annually check their credit report.

When lenders or others check your credit card score then it is called as a “hard enquiry” and this can affect your credit card scores.  Sometimes hard inquiries are shown to other lenders in order to represent new debt that might not be shown on a credit report as an account. Thus hard inquiries can really affect your credit scores but soft enquires don’t.

Employers should not check a job applicant’s credit : 

This myth is wrong it is actually legal for an employer to pull and review a credit report of a job applicant before hiring him or an employee. But yes the employer should seek job applicants or employees permission for this reviewing. In some of the fields like finance, government and banking agencies have to often review credit reports before hiring any person as they might have access to large amount of money or any confidential information. But it is advisable for employers to just check the financial habits or failings of a job applicant instead of checking their credit report.

By paying cash instead of using credit card might increase my credit score : 

Using cash every time instead of credit cards will not help you increase your credit scores, instead using credit accounts is the best way to help you establish and build credit. As both cash and debit cards are just like an electronic check these are not the better options. In order to get qualified for the best rates in order to for instance apply for a home loan or a student loan you need to prove that you can manage your credit responsibly. Second way to build your credit score is to make sure that you make loan and rent payments on time and in addition to that when you have high scores you will be offered with best and new services.

My academic background can affect my credit scores : 

Your Academic background or education level is never part of a credit report, so it will not affect your credit scores. Only debt related information is included in credit reports. Therefore, information about loans, credit cards and payment history, as well as bankruptcy, tax liens and civil judgments will be reported.

Other information like income, investments or assets such as stocks or bonds will also not be included in a credit report. In addition to that there is no information about savings accounts, checking accounts, certificates of deposit or other non-debt banking relationships etc. Additionally, factors like race, gender, marital status, national origin or religion are also not included in credit report.

Source-secondary

Demand: Inclusion of cyber security in poll manifesto

NAGPUR: We are living as much in the physical world as in the virtual one today. So much so that social networking sites and digital advertisements are being used as means to campaign for elections. Against this backdrop, city-based NGO Cyber Awareness Organisation (CAO) has appealed to parties to include cyber security in their political mandate.

The organization points out that the world is migrating from physical to digital form and in this transition phase there are numerous threats, vulnerabilities that are compromising netizens' security. They say the purpose of this appeal is to make an effort towards a secure and resilient cyberspace for citizens, businesses and the government in future.

"Unbelievably, high amounts of money are lost due to cyber crimes, only 10% of which are reported. In the upcoming festival of democracy, all political parties will try and lure voters, especially, the first timer who are techno savvy youngsters. Security in the digital world will be an important issue for them," said cyber law expert and president CAO Mahendra Limaye.

Providing this security would entail protection of information in cyberspace, reducing vulnerabilities, building capabilities to prevent and respond to cyber threats and minimizing damage from cyber incidents through a combination of institutional structures, user awareness, process and technology enhancement and coordination among all stake holders, he added. He also insisted that there must be emphasis on training of law enforcement agencies regarding understanding importance of cyber security as a national priority and cyber crime investigation.
To learn about Identity Theft visit www.cibilconsultants.com
Source: Secondary

Protect your personal information from getting misused

Identity theft occurs when someone uses your personal information to apply for a loan or credit card. If this application is successful, the individual has access to finance that you are liable for.

 

The individual who has stolen your identity will probably not pay back the misappropriated funds. Hence, the lender will update your credit information report (CIR) to say that you have defaulted on a loan.

 

What does it mean when I see “inquiries” on my CIR, when I haven’t applied for a loan?

 

Inquiries are usually made on your credit history when you apply to a lender for a loan. The lender accesses your CIR to assess your repayment capability. 

 

When you see inquiries that you have not made, it means one of 2 things:

1. The lender is making an inquiry to review your overall financial health.

2. Someone with access to your personal information may have approached a lender in order to apply for a loan. This is worrisome because the lender could believe that the applicant is genuine and may proceed to sanction the loan.

In the event that a loan is sanctioned by a lender, the account will appear on your CIR within 45 days.

 

What should I do when I see “inquiries” that I haven’t made?

 

The first thing you should do when you see inquiries that you have not made is to check your CIR for loan accounts that do not belong to you. If you do find discrepancies, immediately raise a ‘dispute request’ by visiting the ‘dispute resolution’ page on the credit bureau’s website. If you are informed by the bureau that the lender has rejected your dispute request, you should report the erroneous account to the relevant lender immediately so that the lender is alerted to the identity theft case.

 

How can I protect myself from identity theft?

 

The easiest way to prevent identity theft is to regularly monitor your credit history. Purchase your CIR 3-4 times a year and ensure that your credit history accurately reflects your credit usage and activity. If you see inquiries (loan applications) that you have not made, immediately alert the credit bureau via dispute resolution and the relevant lender that you have not applied for a loan. 

In addition, it is imperative that you keep your personal information, identity proofs and address proofs are stored in a secure environment.

 

If you are discarding documents ensure that the documents are shredded to prevent misuse.

Source: Secondary

Reasons behind your credit card refusal.

BANGALORE: Sir/Madam your card got declined after swiping! Have you ever faced such situation in your life? It’s actually embarrassing even when you think about such situations. Reaching or exceeding your limit is one of the most common explanations as to why your credit card would be declined but it’s by no means the only reason. Listed below are some other, lesser-known reasons why your credit card could be declined.

 

1. Exceeding your card limit: One reason that your card got declined is you have exceeded your credit card limit. In simple words if you continue to make charges once you have hit the maximum amount your credit card company will allow you to borrow. To avoid such situations the best way is, when you reach the limit, pay down your balance or request you issuer an increase to your credit limit. There are few credit cards those have per-day spending limits. Thus before making any purchases always check how close you are to your limit by checking your account online or calling the number on the back of your card.

 

2. If you have suspicious charges: If the credit card company suspects any fraud then they can quickly freeze your credit card. This move from a credit card company will actually work in your favor if you are a victim of identity theft. But it can also happen if your own credit activity has created a security risk for instance shopping in an unusual place, doing too much of transactions in one day, making a very large purchase or trying to withdraw a lot of money from an ATM. To avoid all the confusion the best way is to call your card company and find out why there is a security problem. By doing this if there is fraud then you can stop it quickly or if you have made the charges, you might be able to resolve the issue by simply answering a few questions from the card company.

 

3. Holds on your account: There are chances that before you return a rented car or check out of a hotel room the traveling, hotels and rental car companies might place a temporary hold on your account. The hold can be for a costlier amount than your eventual charge, possibly eating up your available credit if your card is highly utilized. In simple words the hold ensures that the company gets the amount of money it needs from your use of its services and prevents you from spending beyond your credit limit. Thus while making reservations in such huge hotels do a thorough check with your credit card issuers.

 

4. Your card got expired: If you are not regularly using your credit card or not purchasing much online where you need to put your card’s expiry date then it is difficult for you to realize its expiry date. Often the credit card companies send their customers with new credit card when the old one expires. Thus it is better to check out all the mails even if it looks like junk. If your card is outdated then the merchants in both the store and online will not accept your card. Not being able to buy something is a pain, but simply placing a call to your credit card company could bring you a new one in about a week’s time.

 

5. Your personal information is outdated: Most of the merchants may require you to enter your zip code while using your credit card. By entering the wrong information can cause a rejection when you attempt to pay. To prevent such rejections, login to your account and make any necessary changes. Then proceed to swipe with confidence, knowing all your details are up-to-date. By putting in the wrong information your card will be declined. Always make sure that the card company has your current billing address and telephone number. If you move to a new place, then try to update your new address and contact number on the bank's website as soon as possible.

Know from experts, about Credit History and Credit score, visit www.cibilconsultants.com

Source: Secondary

Study says, Effective coordination is the key to contain cyber attacks.

PUNE: Better communication and information about cyber security, right investment in skilled personnel and enabling technologies together with adoption of security measures will minimize the risk of current and emerging cyber threats, says a Websense - Ponemon Institute US report. 

The report: "Exposing the Cyber security Cracks: Roadblocks, Refresh and Raising the Human Security IQ," has focused on challenges IT executives face in dealing with cyber risks, amid communication issues between IT security professionals and executives, a desire to overhaul current security systems and limited security knowledge among executives and employees. 

The findings assume importance in the wake of rise in data thefts and the eventual financial losses suffered by customers of different business organizations such as banks that are encouraging use of IT and mobile technology driven services. 

Based on a survey of nearly 5,000 global IT security professionals (including 545 in India), the report reveals a knowledge and resource gap in the enterprise - leading to an increased level of vulnerability and risk of data security breaches. 

Web sense, Inc. is engaged in protecting organizations from cyber attacks and data theft while Ponemon Institute is dedicated to advancing responsible information and privacy management practices in business and government. 

Globally, 29% of respondents would do a complete overhaul of their current enterprise security system if they had the resources and opportunity, the survey showed. It said nearly half (47%) the respondents felt frequently disappointed with the level of protection a security solution they had procured while only 12% had never been disappointed in their security solutions. 

The report indicated that advanced persistent threats (APTs) and data exfiltration attacks rank among top fears for IT security professionals and 56% believed a data breach would trigger a change of security vendors. Encouragingly, 49% say they are planning to make significant investments and adjustments to their cyber security defenses in the next 12 months. 

Despite these concerns, a high 52% of companies do not provide cyber security education to their employees and less than half (42%) the employees have undergone a cyber threat modelling process in their present role, the report says, adding that of those that did, nearly all, (94%) found it to be important in terms of managing their cyber risk. 

"Advanced persistent threats and data exfiltration attacks rank the top fears for IT security professionals," said Larry Ponemon, chairman and founder of the Ponemon Institute. "These fears manifest because they believe their technology is in need of an overhaul and there is a widening gap in the knowledge and resource sharing among IT security professionals and executive staff. Encouragingly, the survey revealed plans for technology and education investment in place for the future," he added. 

Communication roadblocks are barriers to reducing the risk of a cyber attack, the survey said highlighting that 25% of cyber security teams never speak with their executive team about cyber security. Of those that did, 25% speak once a year and 18% speak twice while only one percent spoke weekly. 

Creating higher awareness among employee about IT threats and investing in training to help them combat such threats however seems to be a low priority for organizations the survey noted. Only 32% of respondents believe their company is investing enough in skilled personnel and technologies to be effective in executing its cyber security objectives or mission. In fact, 45% of companies represented in the research do not provide cyber security education to their employees, the survey revealed. 

Cyber law expert Vaishali Bhagwat told ToI that the human dimension in information security is almost ignored, yet the first to be blamed in case of a security breach incident. "Organisations run security awareness programmes to demonstrate compliance rather than deliver genuine behavior change in end users," Bhagwat said. "Security is never baked in as it is nobody's priority. In a market that is kind to the one who reaches there first, security is bound to go on the back burner unless some sanctions are imposed on organisations that release insecure products," Bhagwat said, adding, "Technology is pushed on to users without giving due consideration to human behavior and no significant efforts are being made to change human behavior so that it readily absorbs new technology to ensure its appropriate use." 

"This Ponemon Institute security survey highlights that a lack of communication, education and inadequate security systems is making it possible for cyber criminals to attack organizations across the globe," said John McCormack, Websense chief executive officer. "It's not surprising that many security professionals are disappointed with the level of protection their current solutions provide, as many still use legacy solutions that cannot disrupt the kill chain to prevent data theft." 

To learn about Identity theft visit: www.cibilconsultants.com

Source: Secondary