They don't hurt your score

Nowadays, people have been extremely careful about their credit health so as to secure better loans with low interest rates. But mostly such people focus on what affects their credit score and ignore certain myths about things that supposedly affect their credit scores when they don’t. It’s necessary to know about what things don’t affect your CIBIL score so that you don’t waste time fretting over them.

Income: 
It will sound good to you that, income doesn't directly affect your credit score. Creditors know about your income from your application, not from your credit report. Income doesn't negatively affect your credit score but lenders would take your income into account to determine whether you would be able to make payments in future.

Personal Information:
Name, Address and birth date is included in your credit report but other than that your education level, marital status, race, age and gender won’t effect your credit rating whatsoever nor would they be taken into account to calculate your score.

Checking your credit report:
remove the myth and get clear that, checking your credit report is good financial habit and checking it at regular intervals won’t affect your credit score in a negative way but rather help you know more your credit health.

Application for credit rejected: 
When banks turn down your credit card or loan application, people believe that your credit report is affected. But this is purely myth, your credit report doesn't show if an application is declined or approved. Yes, there would be inquiries against your report when you apply for these loans, but being approved or rejected seriously won’t affect your credit score. So, feel happy about it. 

Paying bills of other people and small merchants:
Bill payments to small businesses don’t help build your credit score because most probably they won’t even show up on your credit report. Credit bureaus have strict requirements about who reports information to them and usually small businesses don’t fit into those requirements.

Also paying off somebody else’s bill won’t have any affect on your credit score. When a bills gets paid, it doesn't matter who paid it, the payment would get reported on the file of the person who borrowed the money.

For more queries visit : 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

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

Source: Secondary