When did you last check your credit report?

One of the most important aspects of your finances is your credit. Your credit score is an interpretation of the information in your credit report. Keeping on top of your credit report is vital if you want a good credit score.

With so much riding on your credit, it makes sense to check your credit report monthly so that you can keep tabs on your situation.

                                    

Are You an Identity Fraud Victim?

You probably understand the importance of checking your credit report to see where you stand before you apply for credit. After all, you don’t want an unpleasant surprise when you apply for a mortgage! However, even if you don’t plan to apply for a loan in the near future, it still makes sense to check your credit report.

By keeping tabs on your report, you can quickly identify cases of identity fraud. Your credit report can provide you with a big identity theft red flag: “Has a new creditor appeared on your report for an account you know you didn’t open?”

When you see a new loan, in your name, might be an indication that your identity has been stolen. With so much publicity surrounding data security breaches at major retailers , it’s especially important for you to check your credit report to see where you stand.

You can spread out your reports so that you get one from each bureau every four months. 

The faster you catch this identity fraud, the faster you can fix the problem and restore your good financial reputation.

What About Mistakes?

Sometimes, it’s not a matter of fraud when information is wrong on your report.Checking your credit report is important not just to identify possible identity theft, but also to make sure that the information in your credit report is accurate. Companies use your credit report to determine credit worthiness for a loan and whether you will be eligible for purchasing insurance in some states.

And that’s not all, some employers also review credit reports when making hiring decisions. Negative mistakes on your credit report can cause you to appear less responsible than you are, and could cost you the job.

So, credit report mistakes can result in higher interest rates on loans, and in higher insurance premiums, as well as affect your ability to get a better-paying job in some cases. Over a lifetime, mistakes on your credit report can cost you thousands of dollars — and they might even cost you a job.

Are You on the Hook for Someone Else’s Debt?

Another good reason to check your credit report regularly, is when you are on the hook for someone else’s debt. If you have joint or cosigned debts, you should check your report frequently.

Many married couples apply for debt jointly. This means that your credit accounts are in both your names. It’s important to check your credit report if your spouse is in charge of making payments, just to be sure that it’s actually happening, since your credit rating is impacted by the status of your joint your loan.

It becomes especially important to keep up with payment history if you are divorced. Your shared debts are usually divided. This means your ex might be in charge of making payments on your joint credit account. If he or she doesn’t meet the obligation, it reflects on you. Regardless of your divorce decree, you are on that bill.  Creditors don’t care about your divorce.

Whenever possible, try to get your name off the debt when the divorce goes through. If this isn’t an option, check your credit report regularly to keep tabs on the situation.

This is also a requirement if you have cosigned on someone else’s loan. When you cosign, you accept responsibility — even though the other person is making payments. Check your credit report to see whether or not that debt is being paid on time. If it’s not, you will need to take steps to prevent it from destroying your credit. This isn’t just about divorce. This applies to accounts with children, parents, friends, or anyone you’ve entered a loan with, or cosigned for.

Your credit report can provide you with advance warning that something isn’t right with your financial image. 
Check it regularly, fixing mistakes, identifying fraud, and intervening when it looks like your joint or cosigned debt isn’t being paid as agreed.

To learn more about identity theft, visit www.cibilconsultants.com
Source: Secondary

Surprising things that affect your Cibil credit score

Your Cibil credit score evaluates your credit worthiness. While you might be paying your bills on times, it is not the only factor that affects your credit score. Here are some surprising things that could alter your credit report.

A lot if written about how one can boost the Cibil score and clean up your Cibil report but there are some surprising things that can hurt your Cibil score. Here are some things which will make you sit up and think.

Cutting down the number of your credit cards:  If you thought applying for a credit card is what brings down you score, you are right but you cutting down on the number of cards that you hold also bring it down. While applying for a card leads to a hard enquiry, cancelling some credit cards mean your total credit limit goes down and your credit utilisation moves up. 

Requesting for an increase in credit limit:  You may think that the credit limit that the bank has allotted on your credit card is low and hence request for a higher limit. When you make such a request, the bank will ask CIBIL for your report to assess your credit standing. This means it is a 'hard' enquiry which will brings down your Cibil credit score. So until you really need it, do not request for a higher limit.

Being super cautious about using your credit card:  Many of us think that credit card usage might lead to excessive spending and bad credit habits. The fact remains that without spending and repayment history, the credit bureau is unable to rate your credit standing. Lack of credit transactions or no transaction will make your credit file inactive on the Bureau; it brings down your credit score. So it best to make regular small transactions, say grocery purchases, and pay the credit card on time.

Not checking your Cibil report for mistakes:  It is always good practice to check your credit report for any errors every 6 months or so. Often there is mis-reporting or delayed reporting by banks, which may result in faulty information on your Cibil report and a reduced score. For instance, you may have had a delayed payment in the past which shows up in your credit report but the last couple of years all payments have been on time. If you can procure a document from your lender that there is no outstanding payment and all EMIs have been paid on time your Cibil report can be rectified.

Having no loans:  Most of us have credit cards but not everyone has a loan account. Your Cibil score benefits from a good credit mix both revolving credits (credit cards), as well as non-revolving or EMI based credit (a home loan). It shows your diversity in handling different types of credit. 

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How to fix errors in your Cibil credit report?

Your Cibil credit report is an important document that comes to your aid for everything from availing of a loan to a credit card application and will sometimes even be referred to by a prospective employer. A discrepancy in your Cibil report thus will not only cause your loan application to be rejected, but may also cost you the possibilities of getting a better job. However, if you find that there are errors in your Cibil report, the good news is that you can go about with dispute resolution to get an error free report.

The nature of errors can be something mundane as mistakes in the spelling your name, age, address or PAN card. These errors may not necessarily ruin your Cibil score, but need to be corrected nevertheless. The really damaging errors in your report may arise from a mistaken identity when you find there are someone else's loan details in your report or an overdue amount that is on a loan you have not taken! Such an error can bring down your Cibil score drastically for no fault of yours. If you find such an error exists in your Cibil report, here's what you need to do to rectify it.

The first step

The first step is obviously obtaining a copy of your credit report. More often than, not such errors happen because people undermine the importance of obtaining their credit reports till they hit a roadblock in their loan application process. If you find that there is an error in your report you will need to "initiate" a dispute by submitting a dispute resolution form.Once Cibil receives this form, it takes approximately 30 days to resolve a dispute. This is however subject to the time taken by the credit institution (bank or NBFC or card issuer) to send the required information to Cibil.

For lender related disputes

If you find that the lender has supplied incorrect data to Cibil with regards to your loan details (eg: an overdue amount that you may have cleared is still showing on your report, or a loan is being shown as active even after its closure) you can contact your bank and report this discrepancy. Your bank will then contact Cibil and give the correct information regarding your loan account, after which the information will be updated on your Cibilreport.  Once you get a confirmation from your bank about the rectification of this information in their records, it takes 45 days for this rectified information to show up on your Cibil report.

In case of a mistaken identity

If you find that your report is showing the details of a loan or a credit card that you have not availed of, you will have to raise a dispute regarding the same using the online dispute redressal mechanism of Cibil. Once Cibil receives your application, it will take up the issue with the concerned lender and if it reverts saying that your complaint is a valid one, it will make the necessary changes and submit the rectified information to Cibil. On the basis of this new information that it receives, Cibil will rectify your credit report within 30 working days.

Problems that can arise

If the errors in your report are regarding your own loan or credit card account, the redressal mechanism is easy, but in case of mistaken identities where the bank may have submitted the information of someone else's loan account under your name, the difficulties are much more. The bank in such cases will need to get in touch with the person with whom your identity has been confused and follow up with him. However, since banks mostly outsource their collection process to third parties, there may be some lack in documents or adequate proof. In such cases, the dispute resolution mechanism can go up to more than 60 days.

If the redressal is not satisfactory

If you are not satisfied with the dispute resolution process of the credit bureau, you may approach the bureau directly again, this time making a specific request about what you want. More often than not Cibil will have resolved your dispute in the first shot, even if it does take a little longer if the process in a complicated one.

Your Cibil report  is your passport for a smooth loan application process and is increasingly assuming importance in other spheres of life as well. The prudent thing to do therefore is not to wait till you apply for a loan to take a look at your credit information. Obtain your Cibil report at least once a year to ensure that it is free of errors, or in case there are discrepancies, there is enough time to correct them.

To avoid the complicated prodecure of dispute resolution just book an appointment at www.cibilconsultants.com and get end to end solution for rectification of errors.

Lengthy process: Clearing Credit Report

Credit repair is a process which helps in eliminating problematic factors from your credit report. This will help your credit report to be error free. This will hence make you creditworthy.

A person’s credit report is generally known as his credit file. The credit file contains the overall history of the credits taken by him in his entire life span. It provides information regarding number of accounts, late payments, overdue accounts, and also accounts that have been written off.

It is generally said that “Making mistakes is easy but correcting the same is a difficult task.” The same applies in case of your credit file. Mistakes such as making late payments, having overdue accounts etc. will make a negative mark on your credit report, but to remove the same mistakes from your credit report and making the report clean is a difficult task and will take time.

There can be instances that some accounts can be reported in your name which you have never applied for. These types of errors can have a negative impact on your credit report and will lead your credit score to sink.

Once you identify the errors in your report and you remove those errors from your report you will notice that your score has not increased. If you have an active trade line, then your score will increase, if not your score will remain the same.

So it is important that you have an active trade line to increase your score. Only removing errors and cleaning your credit report will not improve your score. There are also other factors that will improve your score for example having different types of credit, paying dues on time, and many more factors.

Checking your credit report frequently will help you identify errors in your report and will help you to identify factors that will improve your score.

Check your credit score and obtain report at www.cibilconsultants.com

Source: Secondary

Home loans- avoid these mistakes !

Buying a home is a very tedious process for individuals since there are many decisions involved. We often tend to forget the things to be avoided since we focus more on the things to do. Here are some points which should be looked at and some mistakes which should be avoided:

Checking credit score:
Before you apply for a loan, be well aware of details such as CIBIL score/credit score. It would be better to get your credit scores on a regular basis to avoid identity thefts. Credit score is a very important condition which is checked when you apply for a home loan so it is advisable to have a good credit score.

Not researching options well:
Home loans are very popular products available with many banks but with different conditions. Usually many people don’t take the effort to research the varied loans offered and thus have chances of missing out on a good deal. So, it is advisable to window shop a little and evaluate the interest rates, other fees and charges, services, the time the bank would take to pay out the loan, etc. Your original house documents would be with the bank from where you will borrow so it is important that you choose the right bank, which would be safe as well as economical. It is also important to start researching on the loans offered, six months before you start the property search. Don’t try opting for credit cards and personal loans because it is possible that your loan application might be rejected by your lender if he finds confusion in your CIBIL report.

Pre-approved loans not considered:
Most banks would offer you pre-approved loans on the basis of the relationship you share with them. This helps in saving a lot of time during loan processing. When you have a good relationship with the bank, they will know about your history more and the processing would become easier for them.

Over leveraged Loan:
Do not just opt for a loan because the bank is going to offer you a higher value loan. First check If the loan is affordable for you and if you have the ability to pay back the monthly EMIs. The tip is to look out for avenues whereby you can increase the EMIs and to save money on interest by reducing the loan period.

Read the clauses well:
Get a legal consultant to verify your loan documents. Read and be aware of each and every clause in the application form before you sign the loan papers. If, you don’t understand any terms get in touch with the bank.
Thus, have a secure experience when you are buying a home by avoiding these mistakes and make decisions while keeping these points in mind when are you opting for a home loan.

Maintain your credit score with service packages at www.cibilconsultants.com

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Drop down in credit score due to errors !

Want to correct the errors in CIBIL Report and remove your name from CIBIL? Firstly let’s understand the type of errors that can be on your CIBIL report. Before that, the first thing you need to do, get your CIBIL Report.

Banks and financial institutes keep updating CIBIL about your credit behavior on monthly basis. So, at the time of entering some data, there can be some human error which can occur. Even though these are human mistakes, still they are responsible and correctly blamed by a lot of complaints.

Remember that each of these little things is very important and different banks have different criteria and weight age on a particular thing. So, getting each thing right is very important for your future loans. Make sure you have all of them corrected.

At times you will see things which do not belong to you, it comes into the category of “human error” or actually it might be on your name, just that you are not aware of it, this might happen if your documents are misused by some other person. This happens and has happened with lot of people. So take this seriously. Note that you might not see a recent update in your CIBIL report if you have applied for a CIBIL report within 45 days of a transaction. It takes time to update it in CIBIL report.

Once the loan provider confirms that there is an error, it will provide CIBIL with corrected data. CIBIL then updates the data and informs you as appropriate. Always remember, it is the duty of CIBIL to help you resolve your request.

Please remember that CIBIL score does not make changes to any information on its own. It is only a custodian of information received from credit institutions. CIBIL is permitted to make changes to your credit information only when it is confirmed by the relevant lenders.

For Receiving your credit score and Cibil report, book an appointment at www.cibilconsultants.com

Source: Secondary

It is necessary to keep track on your CIBIL report !

Do you know that more than 50% of consumers have errors or mistakes in their credit report?  It will directly affect your credit score because the bureaus use information from your credit files to calculate your credit score. But if you keep checking your credit report then you can easily correct it on time. Here are few steps on how you can keep track on your CIBIL report?

 Get Your Credit Report:
 Get a copy of your credit report and review it regularly, identify changes and any incorrect  accounts information.

Check Your Credit Report for Errors:
Check your credit report very cautiously for any errors —like accounts that are not yours, missed out accounts, loan amounts are incorrect, account balances which are incorrect, showing late payments, etc.

 Report your Errors to the Credit Agency:
If you detect any error in your report, immediately report it to your credit counsellor. Be specific and explain exactly why an item is inaccurate in your report. Remember that  credit agencies receive information from your creditors and then prepare your credit score.

Contact the Creditor:
Call the creditor which is responsible for an error in your report and then let them know that why you are disputing an item which is mention in your CIBIL report.

Wait for a Resolution:
A credit agency can take maximum 45 days to resolve and investigate your dispute against the error in your report with your creditors.

Get Your Dispute Results:
you will get notification from the agency about the investigation results. The error will get removed from your credit report if it is confirmed by the agency.

 Add a Statement of Dispute:
 If an error was not removed and you disagree with the decision, you can add a statement of dispute of up to 100 words to your credit report. That allows you tell your side of the story and future creditors and merchants may take your statement into consideration when evaluating you.

Get your credit report ,renew, revamp and retain your score along with dispute resolution by opting for service packages available at www.cibilconsultants.com

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How can small mistakes hurt your credit score ?

Humans can make mistakes and they can be big or small. In credit sphere making small mistakes can also impact your credit score harshly.Credit scoring algorithms do not understand human nature. Let us understand the concept with an example.

Rahul Sharma, had recently bought a three-bedroom apartment in an upcoming locality close to his office. He had a car and was contemplating a big car after getting his annual raise, which came along sooner than expected.

Rahul's Cibil score was around 750 points on a scale of 900 the last time he had checked while buying his first car a couple of years ago. When he decided to apply for a loan to buy a Luxury Sedan, he was in for a huge shock. The bank informed him that his application was rejected because of a low Cibil score and a couple of negative remarks in his credit report. He pulled out his personalized Cibil score and found his score to be around 610.

Rahul had delayed a couple of his car loan EMIs and a couple of his credit card payments. Delayed or missed payments get reported on your credit report by the lenders and have a negative impact of pulling down your Cibil score.

Lenders often prefer a healthy credit score from their prospective borrowers. Here is a table to give you an idea of percentage of new loans sanctioned to people with different credit scores:

Credit score	Percentage of all new loans sanctioned in this Cibil score band
<650	4.7%
650-699	5.2%
700-749	9.7%
750-599	22.8%
>=800	57.6%

Source (cibil.com)

From the above table it is very clear that people with higher Cibil score stand a higher chance to get a loan. Also, it is important to understand that as risk-based lending is kicking into the Indian market, people with higher credit score also stand a chance to get loans at a lower rate of interest.

So, after Rahul studied his personalized credit report from Cibil, he realized his mistake. He had forgotten to deposit cash into the account from where his car loan EMI used to pass. This happened a couple of times and also delayed 3-4 credit card payments. The credit card company had mentioned days past due (DPD) against his account.It slashed his credit score.

It is very difficult to assess how much of a drop in credit score you could expect because of a single missed payment.  One could expect a drop of 50 to 100 points.
Credit score can even be repaired. You need to follow a financially disciplined life.

For ascertaining your score or acquiring credit repairing services contact us at www.cibilconsultants.com 

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