Credit check; May be required!

When you think of a credit check, chances are your thoughts jump to loan transactions. After all, the point of a credit history is to provide context for your past credit transactions as a way to predict the default risk you pose to a current lender. The reality, though, is that your credit profile is used for other financial transactions.

Just because you aren’t borrowing money, it doesn’t mean that your credit information isn’t being used to make judgments about your level of financial responsibility. Here are five non-loan financial transactions that may require a credit check:

1. Cell phone service

Many carriers want to make sure you’re going to pay your bill as agreed. Others worry about letting you walk out of the store with a phone that will be paid for in the service contract.

Poor credit means that you may be limited in account choices. You may only have access to an account with strict data usage and calling limits if you have a poor score. Additionally, if you want to upgrade your phone later, your carrier might make you pay for the upgraded phone up front, rather than letting you make installment payments.

Some Internet service providers and cable/satellite TV companies also run credit checks before opening accounts for new customers. If you expect to access entertainment in this way, you need to be aware of the possibility that your credit history will be accessed and used to judge you.
                                   

2. Insurance premiums

Many auto insurers review credit scores when setting rates. Poor scores are highly correlated with future claims insurance. You may pay more for car insurance if you have a poor score.

Some states ban insurers from using credit scores to make these decisions, but there is still the chance that you could pay thousands of rupees extra a year on your auto policy as a result of your credit situation. Some homeowners insurance rates are set based, in part, on the results of a credit check.

3. Renting an apartment or a home

Even though you aren’t borrowing when you rent an apartment or a home, the reality is that you are still expected to make regular payments. For some landlords, a poor credit rating could be a red flag that you will be difficult to collect from.

You might also need to get a cosigner for your lease if your situation isn’t up to scratch. In some cases, you will be approved to move into the rental, but you might need to make a larger security deposit. This can be difficult if you are short on ready cash.

4. Applying for a job

Even your ability to earn an income can be impacted by your credit history. Employers aren’t supposed to check your credit score, but that doesn’t mean that some won’t look at your credit report to identify possible risks. This occurs most frequently for jobs where people handle money or other valuable items. Someone with a bad credit report might be considered a risk of embezzlement or bribes. You may lose a good job opportunity if you have poor credit.

5. Finding true love

Finding the right life partner is supposed to be about love and compatibility. It’s supposed to be romantic. However, there are also money components involved with identifying a life partner. Many single people now exchange credit reports and scores before becoming serious in a relationship.

Even if your partner is willing to overlook your past financial indiscretions, he or she might be unwilling to combine finances with you until you get your credit score in shape. Even though marriage doesn’t have to mean that you share a credit profile, many partners are wary that your situation could affect them.

In the end, you need to be aware of the fact that a credit check isn’t just for loan-related financial transactions. Attempts to include other information in credit reports and scores are under way, since utility payments and rental payments can also be indicators of your level of financial responsibility. However, for now your credit profile is still one of the main ways that others — even non-lenders — decide whether or not you are an acceptable risk.

Source: Secondary

Credit Affects You! See How?

How Your Credit Score Affects The Interest Rate You Receive

Of course, you know that the higher your credit score is, the better interest rate you will get on your credit cards and loans, whether that be for a mortgage, car loan, consolidation loan, or any other type of loan you need.  The reverse is also true; the lower your credit score, the higher interest rate you’ll have to pay.

The interest rate you get is important because it has the potential to save you thousands of rupees.

3 Ways Your Credit Affects You That You May Have Never Thought Of:

Most of us understand the relationship between credit score and interest rate received.  However, there are many other ways your credit score affects you that you may have never considered:
                                 

Rate for Car Insurance.  Crazy, right?  Your credit score can affect your car insurance rate, but it is just one of the factors that are used to determine your insurance premium.  Insurers create a credit-based insurance score that is computed by looking at your credit history, geographic location, age, driving and claims history, among other things.

For the credit portion of your insurance score, these factors are important: payment history, including delinquencies or late payments; length of credit history; and types of credit, such as credit cards and loans.  The good news (if you have a good credit history) is that about half of existing customers receive a rate decrease based on credit score.. The opposite is also true.  Those with lower credit will likely pay more.

Ability to Rent an Apartment.  Put yourself in a landlord’s position.  Would you want to rent to someone who had a high likelihood of not paying and that you would have to spend months trying to evict?  That doesn’t sound like a good time, not to mention all of the money the landlord would lose while the tenant is not paying.  For this reason, more and more landlords are checking credit scores before renting to people.

Job Prospects.  How you handle your credit and how you perform at your job should be two separate issues, right? Not so for some employers.  An employer can only look at your credit history with your permission, but for some employers, if you don’t give permission, you won’t get any further in the interviewing process.

While the majority of employers will not ask to see your credit, in particular fields, asking is routine. A bad credit rating is likely to be more of a factor in certain industries like financial services

Credit scores affect more areas of your life than you may realize.The more responsible you can be financially, the higher you can make your credit score. The higher your credit score, the less you’ll pay in many areas of your life. Have you knowingly been affected in these unexpected ways by a high or low credit score?

Visit: www.cibilconsultants.com
Source: Secondary

No Credit Score Can Negatively Impact Your Finances

If you aren’t planning to borrow, it seems like it might be pointless to worry about building up your credit profile. After all, if you don’t have a credit score, it doesn’t matter if you aren’t going to get a loan, right?

The unfortunate truth is that this isn’t always the case. In fact, there are many situations in which your credit score matters more than you think. Even though you might not think it’s fair, having no credit score says something about you to financial service providers and others. The lack of a credit score is an indication to others that they can’t trust your ability to be responsible with your finances.
                                             

Financial Setbacks Due to a Lack of Credit Score

Not having a credit score can actually cost you money. A landlord can charge you a higher security deposit on a rental if you don’t have good credit (and having no credit is often seen as just as bad as — or worse than — a poor credit score). You might also find yourself with less than ideal terms when it comes to signing up for a cell phone plan or getting Internet service.

Additionally, in some states, it’s legal for insurers to check your credit score when determining your premiums. 

When you think about the extra costs of not having a credit score, and how they can add up over time, it becomes clear that you could easily be missing out.

When You Decide to Buy Something Big...

The biggest issue you run into, though, is when you decide to make a major purchase that practically requires that you borrow. You might decide to never get a credit card, or even to pay for your cars with cash. But if you make buying a home a priority, having no credit score means you will have a very hard time qualifying for a mortgage.

No one wants to loan tons of money to an unknown entity with no history of making loan payments (and credit cards count as loans). While you might find some lenders willing to take a chance on you, you will likely have to pay a subprime rate to make it happen.

You don’t have to go into debt to build your credit history. If you get a credit card, use it, and then pay it off every single month, you can get a good credit score without the accompanying debt. You’ll be able to further your finances, and get a house when you’re ready.

Visit: www.cibilconsultants.com
Source: Secondary

For Successful Financial Cleaning

There’s a good chance that momentum has dissipated for you. You’re not alone. According to a study done last year by the University of Scranton, only eight percent of people successfully complete their resolutions. With your finances though, it’s not too late to make positive changes and see the benefits quickly. As we move into spring and the days get longer and warmer, here are five tips to help inspire some financial spring-cleaning to get your finances in order.

Understand your situation

It may feel like having to face up to harsh reality, but any financial improvements you make are guesswork if you’re not working from a real picture. Checking your credit score and reports first is important, as it can direct you to the parts of your financial profile urgently in need of attention. A personal financial management tool that aggregates your spending can give you an itemized picture of just where your money is going. You’d be surprised at how much money you’re wasting in areas of your life you’re not paying attention to.
                             

Set a specific goal

It’s not enough to just want to “spend less” or “be better.” As well-intentioned as these sentiments are – and as strong as they may feel to you – they aren’t going to help. Set a specific goal to achieve within a defined timeframe. When you think about spending less, what comes to mind? Looking at your credit report, or a breakdown of your spending, where does it appear that you’re going wrong? Flesh out that desire for improvement, and turn it into a real task. Give yourself a deadline that you can look forward to.

Look for small changes with a big impact

Closely peruse your credit card bill. Think critically about what you pay for and what you actually use or need. Is that Time Magazine subscription leaving you with a pile of old magazines in the corner?  If you’re not using your gym membership, even the cheapest monthly commitment can represent hundreds of wasted bucks. Swap a deluxe cable package for a few well-placed streaming services, or cut streaming out altogether. Take a good look at your mobile bill. You might be paying for a big data plan alongside unlimited calls and texts just out of convenience, but not actually need it. Take a second look at the market to make sure you’re getting the best deal for insurance. 

Beyond this, simple lifestyle tweaks can have massive financial impact. If you buy lunch or eat dinner out most days, packing a lunch one extra day a week and making an effort to cook at home more often can save you hundreds of bucks. Rather than heading out to the movie theater, watch a movie at home. The sacrifices don’t have to be big, but the savings will be.

You can make it fun

Financial prudence doesn’t have to be a drag. Treat yourself when you achieve your goals. Give yourself something to look forward to. Celebrate, responsibly, when you get there. If you have a partner, share the success with them. More than anything, it’s something to feel good about.

Source: Secondary

Loan Against Insurance Policy

Loan against Insurance Policy is not so very common in India. One of the major reason is that the most of the policyholders are not aware of this option. Secondly, the penetration of insurance is very low in India. In fact, if we remove Income Tax benefits attached to the Insurance Policy then penetration will be negligible. Insurance Premium is either considered as a waste of money or is paid for investment purpose. Both, India psychic and Insurance industry are responsible for this sorry state of Insurance products. 

What is Loan against Insurance Policy?

You can avail Loan only against Life Insurance Policy. Only exceptions are Term Insurance Plan & ULIP. Pre-condition is that Life Insurance Policy should have completed 3 years. In short, traditional insurance policies like Endowment Plan, Money back policy etc are eligible for Loan against Insurance Policy provided policyholder is paying the premium for 3 years. IRDA banned loan against ULIP in 2012. Some insurance companies do provide loan against ULIP but it depend on the fund you have selected & NAV of the ULIP. For ULIP, the loan amount is 40%-50% of Fund Value. As a thumb rule, for any life insurance policy which has the surrender value, you can take Loan against Insurance Policy. Surrender Value is basically the amount which the policyholder will get if he/she decides to close the insurance policy before maturity. The surrender value of policy keeps increasing with the policy term depending on your insurance product as you accumulate bonus over a period of time. Normally surrender value of the policy is 30% of the Policy Value. Loan against Insurance Policy is one of the best way to raise funds during emergency situation. You can avail loan from your insurance provider or pledge the policy to banks. 

Loan Amount: Its a complex calculation which depend on Surrender Value of the Policy, No of Premiums Paid & No of years Completed / Remaining. There is no scientific calculation to arrive at Loan Amount. As a thumb rule, you can assume that 80%-90% of the surrender value can be availed as Loan Against Insurance Policy. For example, if your insurance coverage is Rs 10,00,000. The surrender value will be Rs 3,00,000 therefore you can avail a loan of between 2.4 Lakh to 2.7 Lakh. If you have accumulated an additional bonus of Rs 1 lakh then Loan eligibility will be approx 3.2 Lakh to 3.6 Lakh. Another method which is used by LIC to calculate loan amount is approx 50% of the premium paid. Assuming, for a policy of Rs 10 Lakh, you have paid a premium of Rs 8 lakh at the time of availing Loan Against Insurance Policy. You can get a max loan of Rs 4 Lakh. Normally, Insurance provider will not share how they have calculated loan amount but it is the FINAL WORD.

Rate of Interest: The interest rate charged by the insurance company is variable and depend on the existing interest rates. Currently, it is around 10% – 12%. Interest is payable every 3 months, 6 Months or yearly basis. In some cases, there is minimum commitment period of say 6 months. The borrower has to pay interest for min commitment period even if the loan is cleared before 6 months. Please note that Interest Rate is variable and is revised annually. 

Documents Required: You need following documents to avail Loan against Insurance Policy

(a) Original Insurance Policy

(b) Deed of Assignment: Under Deed of Assignment, the benefits of life insurance policy against which the loan is taken will be assigned to the bank or insurance company. The policy will act as collateral or security till the loan is repaid. The assignment can only be executed by the policyholder and it has to be endorsed on the policy document. In short, you transfer the title of the policy till the loan is repaid. Future premiums are paid by the policyholder only.

(c) Payment Receipt for the Loan Amount: Normally, the Loan is disbursed through NEFT therefore advance receipt is required

(d) Cancelled Cheque

Repayment Options: Repayment options also vary. For example, in case of insurance provider like LIC you need not pay the Principal amount provided you are paying the interest on time. Now you must be wondering how will insurance company recover the principal amount. At the time of maturity or claim, principal outstanding will be deducted from the policy value. Balance amount will be paid to the beneficiary or policyholder. If the policy is pledged to a bank then you need to pay the principal amount as per amortization schedule. Normally, the repayment period is 6 months.

Loan Processing Fees: A nominal fees of Rs 250 is charged.

Time Taken to Process Loan: Banks and Insurance provider claim that the loan will be processed in 2 days time, but it may take up to 7 days time.

Default on Repayment of Loan / Future Premiums: In case of default in repayment or payment of future premiums, the insurance policy will lapse. The insurance company also reserves the right to recover the principal / interest due from the surrender value of the policy. The threshold is surrender value of the property i.e. if principal + interest outstanding equals to surrender value then your policy will be terminated.

Loan Closure: Upon the repayment of Loan, Insurance Provider or Bank will reassign the policy to the policyholder by an endorsement in the policy.

Insurance Provider or a Bank?: Some people are in a dilemma whether to avail Loan against Insurance Policy from a bank or Insurance Provider. It is suggested to avail Loan against Insurance Policy only from the insurance provider. The reasons are:

(a) You need not repay Principal which will be adjusted from Maturity / Claim amount. Though it is not advisable but still, it can be an option in case of emergency.

(b) Banks charge higher interest rate

(c) The loan from a bank is basically overdraft facility against the pledging of an insurance policy. Any overdraft facility is reported to CIBIL. If you default on Loan against Insurance Policy from the bank then it will impact your CIBIL score negatively.

Benefits of Loan against Insurance Policy

(a) CIBIL Score:  People with low CIBIL Score can also avail the loan.

(b) Alternative to Personal / Consumer / Short Term loan: Loan against Insurance Policy is best alternative to low-value loans like Personal Loans etc. Reason being, interest rates are lower compared to unsecured loans. The interest rate on a personal loan is average 14%, but the interest rate on Loan against Insurance Policy is 11%.  

(c) Chances of Application Rejection: There is no fear of application rejection except on technical grounds like signature mismatch etc. Whereas in unsecured loans income details, credit worthiness etc are checked therefore chances of rejection of an application are high.

Summary: Insurance policy provides financial security to dependents in case of any unfortunate event. Loan against Insurance Policy should be the last option for a policyholder. It should be availed only for emergency situations. Even if the loan is availed, it should be repaid within 6 months – 1 year so that benefits of the policy can be restored.
Visit: www.cibilconsultants.com
Source-secondary

Credit Check Please!

When you think of a credit check, chances are your thoughts jump to loan transactions. After all, the point of a credit history is to provide context for your past credit transactions as a way to predict the default risk you pose to a current lender. The reality, though, is that your credit profile is used for other financial transactions.
Just because you aren’t borrowing money, it doesn’t mean that your credit information isn’t being used to make judgments about your level of financial responsibility. Here are five non-loan financial transactions that may require a credit check:
                                  
                           

1. Cell phone service

A person recently signed up for new cell phone service. Before the company would open an account for him, they ran a credit check. Many carriers want to make sure you’re going to pay your bill as agreed. Others worry about letting you walk out of the store with a phone that will be paid for in the service contract.
Poor credit means that you may be limited in account choices. “You may only have access to an account with strict data usage and calling limits if you have a poor score,” Additionally, if you want to upgrade your phone later, your carrier might make you pay for the upgraded phone up front, rather than letting you make installment payments.
Some Internet service providers and cable/satellite TV companies also run credit checks before opening accounts for new customers. If you expect to access entertainment in this way, you need to be aware of the possibility that your credit history will be accessed and used to judge you.

2. Insurance premiums

“Many auto insurers review credit scores when setting rates,”  “Poor scores are highly correlated with future claims insurance. You may pay more for car insurance if you have a poor score.”
Some states ban insurers from using credit scores to make these decisions, but there is still the chance that you could pay hundreds of extra dollars a year on your auto policy as a result of your credit situation. Some homeowners insurance rates are set based, in part, on the results of a credit check.

3. Renting an apartment or a home

Even though you aren’t borrowing when you rent an apartment or a home, the reality is that you are still expected to make regular payments. For some landlords, a poor credit rating could be a red flag that you will be difficult to collect from. You might be turned down for some housing situations if you have a poor score. 
You might also need to get a cosigner for your lease if your situation isn’t up to scratch. In some cases, you will be approved to move into the rental, but you might need to make a larger security deposit. This can be difficult if you are short on ready cash.

4. Applying for a job

Even your ability to earn an income can be impacted by your credit history. Employers aren’t supposed to check your credit score, but that doesn’t mean that some won’t look at your credit report to identify possible risks. “This occurs most frequently for jobs where people handle money or other valuable items,” . Someone with a bad credit report might be considered a risk of embezzlement or bribes. “You may lose a good job opportunity if you have poor credit.”

5. Finding true love

Finding the right life partner is supposed to be about love and compatibility. It’s supposed to be romantic. However, there are also money components involved with identifying a life partner. “Many single people now exchange credit reports and scores before becoming serious in a relationship,”. Citing recent surveys that indicate that singles are interested in the financial viability of potential partners.
Even if your partner is willing to overlook your past financial indiscretions, he or she might be unwilling to combine finances with you until you get your credit score in shape. Even though marriage doesn’t have to mean that you share a credit profile, many partners are wary that your situation could affect them.
In the end, you need to be aware of the fact that a credit check isn’t just for loan-related financial transactions. Attempts to include other information in credit reports and scores are under way, since utility payments and rental payments can also be indicators of your level of financial responsibility. However, for now your credit profile is still one of the main ways that others — even non-lenders — decide whether or not you are an acceptable risk.
Visit- www.cibilconsultants.com

Source: Secondary

How does medical debt affect your credit score?

Even when you have health insurance, medical costs can add up, forcing you to borrow in order to pay your bill. While it would be nice to think that the debt you incur for health care costs won’t ruin your credit, the reality is that, like any debt, can impact your credit score.

“Medical debt that appears on your credit report normally hurts your credit score, no matter the reason for how it got there. Medical debt can be reported by the providers, collection agencies, and through public records if the creditor files suit in court.”

Medical debt and your credit score

How medical debt impacts your credit score also depends on the scoring model being used to determine your score. 
Medical debt that has been sent to collections will have a smaller impact on your score than non-medical collection accounts.
However, “Not every lender uses the most current version of credit scoring models.” This means that your medical debt might still count against you, depending on how it is reported, and which scoring model and version of that scoring model are used. In general, though, it’s safe to assume that your medical debt is likely to have some impact on your credit score, especially if you have missed payments. Any debt account that isn’t kept up to date will drag on your credit score.

                                                

How to reduce the impact of medical debt

“The best way to keep medical debt from dragging down your score is to keep it off your consumer report. In many models, paying off your medical debt can also prevent it from having a big impact on your score. The good news is that medical debt is in a class by itself when it comes to your credit report and your score.
The information on your credit report appears there because it has been reported by a creditor or service provider. This means that if you can work out a payment plan with your provider, and you stick to the terms, there is a good chance that it won’t be reported to the credit bureaus. “Most providers will not report medical debt when consumers are actively communicating, and making an earnest effort to resolve open claims issues with insurers, and paying down the balance.” 
Many hospitals and other health care service providers offer payment plans for expensive procedures. Additionally, you can usually find reasonable payment terms if you have a high deductible. The problems come in when you stop making payments as agreed and the provider feels like the account needs to be turned over to a collection agency. “Most providers do not have systems to report, but collection agencies do.”

Also, be aware of the difference between organizing a non-loan payment plan with your provider and the “payment plans” offered as loans through third parties. These types of plans are commonly offered by dentist offices and vision specialists. You are referred to a payment plan, but this plan is actually set up through a third-party and is a special financing arrangement. In some cases, these arrangements are reported as the loans they are, and appear on your credit report. Understand the distinction before you agree to a payment plan.

Paying off your medical debt can also reduce the impact on your credit score. Increasingly, there is pressure for credit scoring models to stop “counting” medical debt — even collection agency medical debt — once it has been discharged. Make an effort to pay off your medical debt, and you can reduce its impact on your credit score.

Watch out for identity theft

Finally, be on the alert for fraudulent medical debt. Medical ID fraud is a growing problem. Someone might use your information to receive health care, and then skip on the bill. This results in medical debt in your name. Check your credit report regularly for these types of fraudulent accounts. If you notice billing for a medical procedure that you didn’t have, follow up and dispute the account. You will likely need to prove to the health care provider that you weren’t the one who received the treatment. This can be difficult to clear up, and it’s even harder the longer the account sits, so make sure to check your credit report regularly for errors.
Like any other debt, medical debt can impact the way financial companies view you. Your best defense is to keep on top of the situation, and try to avoid falling behind.

To learn more about Identity Theft visit www.cibilconsultants.com
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

Catching a Credit Con

When did you last update your e-mail address and phone number with your credit card issuer? Many do not even bother. Now, imagine being billed for fraudulent purchases made from your card.

What do you do? First, of course, you inform the card issuer, who will probably ask you to fill a declaration form. Doing this quickly is important as, according to rules, if the issuer isn't informed within 30 days of you receiving the statement, it is assumed that you have accepted it as accurate. So, if you were out of station and didn't notice it on time, you would be legally bound to pay.

Of course, if you had updated your contacts with the card issuer and got an alert, which comes within minutes of the transaction, you could have called up the issuer immediately and saved yourself the loss.


"Important communication, these days, happens through mails and phones. So, it is crucial that the customer keeps his bank updated so that he can be reached any time for checking a transaction's authenticity." 

COMMON CATCHES
In India, according to a provision in credit card contracts, the card-issuing company isn't liable for any fraudulent transaction unless the customer files a report immediately. Once reported, the card holder is no longer liable. So, be alert and look out for the red flags. Card frauds range from purchases made on lost or stolen cards to phishing, identity theft and traps set up through unsecured Internet transactions.

Skimming or cloning is something to be cautious about, especially when travelling abroad. In this, data in your card's magnetic stripe is recorded when swiped at a machine. This information is then used to make duplicates. It can happen anywhere, at a petrol pump or a restaurant. So make sure the card is swiped in your presence.

"To minimise risk, banks also advice customers to replace cards after trips."

Do you use your card online? Beware of cyber swindles. These involve unauthorised use of card details, such as the card number, the Card Verification Value (three-digit code printed on the back side of the card), to make purchases online.

"One should register for online transaction passwords such as Verified by Visa or MasterCard Secure Code and avoid using public computers. Also, make sure that the transaction happens through a secure website, which begins with HTTP."

Fraudsters also try account takeovers and identity theft. This happens in two ways. One, a cardholders information is stolen and used for transactions where the card's physical presence isn't required, such as online purchases. Two, by placing a request for a new card using the stolen information. Monitoring your credit card report is your best defense.

"Check for unusual transactions, especially small ones, as fraudsters make these to check the card's validity."

Last but not the least, do not fall prey to phishing mails (that appear to be sent by an institution you deal with but are not), SMSes or calls.

FRAUD CONTROL
Usually, banks have dedicated transaction monitoring units and fraud detection systems to analyse suspicious patterns. So, if two transactions are made from different countries with the same card within a short period, the system will highlight this. However, it helps if the customer is also cautious. For instance, opting for cards with signature lamination and a photograph, registering for transaction alerts and transacting only through secured websites are common precautions.

If you are a frequent user, it may make sense to go for an insurance cover to take care of liabilities from loss and misuse. Banks usually have tie-ups with insurers. General insurers also offer standalone credit card policies, which cover all cards held by a customer under one policy. One alert to the insurance company can block all your cards, limiting your loss.

FOR YOUR GRIEVANCES
The RBI has appointed an ombudsman for redressal of complaints which your bank has failed to respond to satisfactorily. A bank must respond within 30 days from the date you lodged the complaint. In case of wrongful billing, the card company should provide documentary evidence within 60 days. If unsatisfied, the cardholder can go to the ombudsman.

Learn more about identity theft at www.cibilconsultants.com

Source- Secondary

3 Unexpected Ways Your Credit Affects You

Credit score isn’t necessary, but that seems to apply only if you’re independently wealthy and will never need a loan. For the rest of us, a credit score is one of the most important numbers for our finances.

How Your Credit Score Affects The Interest Rate You Receive

Of course, you know that the higher your credit score is, the better interest rate you will get on your credit cards and loans, whether that be for a mortgage, car loan, consolidation loan, or any other type of loan you need.  The reverse is also true; the lower your credit score, the higher interest rate you’ll have to pay.

The interest rate you get is important because it has the potential to save you thousands.

3 Ways Your Credit Affects You That You May Have Never Thought Of

Most of us understand the relationship between credit score and interest rate received.  However, there are many other ways your credit score affects you that you may have never considered:

Rate for Car Insurance.  Crazy, right?  Your credit score can affect your car insurance rate, but it is just one of the factors that are used to determine your insurance premium.  Insurers create a credit-based insurance score that is computed by looking at your credit history, geographic location, age, driving and claims history, among other things.

Ability to Rent an Apartment.  Put yourself in a landlord’s position.  Would you want to rent to someone who had a high likelihood of not paying and that you would have to spend months trying to evict?  That doesn’t sound like a good time, not to mention all of the money the landlord would lose while the tenant is not paying.  For this reason, more and more landlords are checking credit scores before renting to people.

Job Prospects.  How you handle your credit and how you perform at your job should be two separate issues, right?  Not so for some employers.  An employer can only look at your credit history with your permission, but for some employers, if you don’t give permission, you won’t get any further in the interviewing process.

The more responsible you can be financially, the higher you can make your credit score.  The higher your credit score, the less you’ll pay in many areas of your life.

Have you knowingly been affected in these unexpected ways by a low credit score?
Don't worry just book an appointment with credit doctor and get your score improved.
Visit www.cibilconsultants.com

Source Secondary

Who has an eye on your credit report ?

Nowadays, a number of organizations use credit reports in determining eligibility of people to who wish to opt for their services. Basically, organizations judge those people on the basis of their credit score. Credit Score is a calculation formulated by gauging the past and present financial performance in efforts to predict the future behaviour. This in short is known as Creditworthiness.

The credit report includes a list of all the past and present credit accounts open under our name, for example loans, credit cards or all other installments. The report records each date when the account was opened, your instalments payment history and your current outstanding balance.

 It is obvious to assume that only lenders who provide financial assistance would check credit report, but this is not the case. Your credit report is viewed by a number of other organizations. Below are the lists of some organizations that can check your credit report:

• Employers: If you wish to work in a bank or any other financial institution you shall need to undergo a credit check. But did you know that employers can require a credit check.

• Insurance Companies: Insurance companies have found that they can use credit score to determine how likely people will be paying their insurance premium.

• Insurance Agents: Insurance companies correlate credit scores with the number of claims you file. Insurance study claims that drivers who have high credit scores are less averse for claims. When one applies for a premium from an insurance company, the premium you are pay and the rate you receive is based in some part on your credit score.

• Utility companies: When you open utility accounts, including electric, cable and telephone services, they also examine your credit history. Utility companies use your credit score to determine whether you will be required to put down a deposit.

Maintain good credit score by opting service packages available at www.cibilconsultants.com

Source: Secondary

How to get Healthier Personal Finance ?

What defines our finances may not be in our hands always but most of the times it. Our Finances define many of the important factors so it is necessary to have a healthy financial life.

Prioritize your financial goals:
Write down the financial goals you are aiming for and focus on the ones which rank high on your priority list. Having goals set is very important and the first step to healthier finances. 

Get a Credit Report: 
Credit Report is a major factor defining the health of your finances. Checking your credit report at regular intervals is good financial practice and helps you spot any deceitful activities on your reports immediately. You can correct these errors before they devastate your finances.

Reduce Debt: 

Optimize your debts to pay less. Pay off any pending balances to keep your credit report clean. Because the better credit score you will have, the more money you can save. Higher credit score not only gets you lower interest rates but also gets you more ways to pay off your debts with debts consolidations, balance transfers etc.

Insurance:
To tackle the risks in our financial life, insurance is a must. Search for the best insurance deals with lower costs and enough protection. It makes your finances safer and gives you a safety net.
 

 

Follow these steps to healthier personal finances and know more @ www.cibilconsultants.com

Source: Secondary