Repair your Credit Information Report (CIR)!

Your credit information report plays a major part in your loan application process. And also remember that you cannot improve your report overnight. A bad credit history decreases your chances of getting loans. Before we go into the details, here are some facts you should know: –

• A credit repair company cannot remove or change any information in your CIBIL report directly.

• A Credit Repair Company will usually ensure confidentiality of your CIR.

• You can always opt for CIBIL’s online resolution process free of charge.

• Only the respective bank or financial institution can make changes in your credit report, credit repair companies facilitate this process.

There are two major reasons why your CIR can be bad.

1. Inaccurate information

2. And defaults in payments

For 1, In case the information is incorrect, then you can initiate the resolution with us. And if your bank confirms that the information is right then CIBIL cannot do anything. It is always better to first get in touch with your respective bank to correct any information.

For 2, if you have many unpaid or late repayments of debts and EMIs and credit card bills then it is entirely your fault. In case you faced financial crisis which caused you not to repay fullyin the past, then make it a point to repay your pending dues once your finances are stable.

If you have relocated and your credit card bills are reaching the previous address and you aren’t aware of it, there is a chance you might miss paying by the due date. In that case, always keep email and text options open for your banks. Everything happens on the phone these days, so it is good on your part to have alerts coming to your email address and mobile numbers. In this way, you can at least be in sync with all your repayments of credit cards.

Terms and conditions are something a lot of us ignore. But before taking a loan or credit card, read carefully. They don’t just write terms and conditions for formality. It is important to go through them once before you confirm. You may need a magnifying glass to read the fine print though, but make an attempt to do so as you will realise the importance of these clauses only when you feel you are being overcharged.

In case you have missed payments because you forgot them or thought it was fine to delay by one or two weeks, then you are at major loss. Paying your lenders on time is important for your credit score to remain healthy and to get your loan application sanctioned. When people opt for home loans, a credit score of 600 score is considered poor. So, if you need a large loan, you will not be able to obtain it due to your carelessness of maintaining a poor financial credit history.

These are the two major issues that can spoil your CIR. But thanks to the credit score repair companies who come to our rescue. But if you are not careful about your credit account repayment history, then they cannot help you in that!

What are credit scores?

Not many of us are enlightened with all the details regarding an individual’s credit score in India. In simple terms, a credit score is a numerical value based on the analysis of a person’s credit records that represent his or her creditworthiness. These scores are computed by credit bureaus with the data sourced from lending institutions.

In India, four companies determine the credit score, out of which the CIBIL score is the most popular. This is a 3-digit number which shows a summary of one person’s credit history and rating. This score can be from 300 to 900 (the latter is the best score). While some people do not have any credit history and so their score will be -1. In case the credit history is less than six months then your score will be zero. It can take up to 6 months to build your first credit score.

An individual’s credit score in India is computed by CIBIL, Experian, Equifax and Highmark.
Many of you are wondering what went wrong with your credit score, here are some factors that impact your credit scores: –

1. Payment history: – This is one of the factors that can impact your score. This factor accounts 35% approx. of your total score. A late record of payment in your current and past credit account will lower the score. Be consistent about making any payments on time and make a positive impact on your score.

2. The public records: – Public records matter. These include bankruptcies, judgments and collection items can lessen your score value. Be aware since sometimes you cannot avoid them.

3. The length of your history: – We mean credit history. The longer your credit history is the better it is. In some cases, it can increase and have a positive impact on the credit score. Credit history determines around 15% of your score.

4. Inquiries: – Whenever another person gets your credit report like a lender, landlord, an insurer, a number of inquiries can have a negative impact. Your new credit accounts and inquiries make up approx. 10% of your score.

5. Too many accounts: – Shut all the extra unwanted accounts which you have opened and probably forgotten about. This makes up around 10% of your score. So why do you want to lose even 10% of your credit score. It is essential. Also, closing an account will not remove all negative repayment records. So, if you have been paying up your loan account or credit card irregularly, then it reflects badly on your credit report. The bank will not erase all the evidence. That’s why maintaining a good credit repayment history is extremely important.

Follow few basic phases to increase your creditworthiness. Why lower it by being irregular? Some people think their age makes an impact or difference to the score; let us tell you that it is not going to change your credit score at all.

With a better score, you will be seen creditworthy to be offered many services with bigger loans and higher credit card values. Get faster loan approvals with an incredible credit score!

Is credit score important for financially secure people?

Financial security is extremely important to people in all industries and from all walks of life. This means security is not only for the present, or in terms of business, where the current assets match the current liabilities in a 1:1 ratio, but it also implies that the future is secured for you, your family and your organization. Credit score analysis is being used increasingly by more and more institutions to judge if a person is worth the risk of extending a loan or credit card too. It is nearly impossible for anyone to have financial security without having a good, if not impeccable credit history.

Let’s look at some facts and figures.

1. It is interesting to note that there is a very clear relationship between the age and scores of people in India. Senior citizens are said to be the most secure in terms of scores whereas people in the age group of 25-35 are said to be the riskiest. These figures are collected not just from people in India, but also from many other nations where the credit scoring system is highly prevalent.

2. Financial security also largely depends on the industry or work domain you belong to. Statistics show that while people belonging to the real estate and IT industry have people with some of the most stable credit scores, people engaged in manual labour tend to have lower scores. This point doesn’t have any intention to degrade any profession but is just a statistic. You could have a credit score of 850 even if you work as a truck driver provided you maintain your loans and credit card payments well and at the same time, a software engineer who spends more than he earns could have score in the low 500s.

3. There is a definite upswing in the employment records of the country. In the year 2010, the unemployment rate was about 9.4%, but in the year 2014, it dropped to about 4.9%. Another point to be noted in this section is that the unemployment rate amongst the youth has dropped from 18.10% to 12.90%. This means the younger generation has more available money to save and spend.

Coming to the crux of this page, based on the above details, we can clearly make out that more and more people are becoming financially secure, even after they retire. So does one really have to worry about credit scores so much? The answer is – you should always stay on top of the credit game, no matter what your age and employment situation is. Here are some of the scenarios which may lead to fluctuations in your disposable income, thus affecting your credit score directly

1. Your company may stop increasing your salary.

2. The inflation rate of India varies from time to time but your income is not always that flexible.

3. As time passes, your productivity and enthusiasm to work may also decrease.

4. Many industries have cycles of ups and downs and you never know when it might be your industry’s turn.

Credit score repair agencies and your own efforts may help repair most of the damages, but it is advisable to always have good credit scores by having a strong financial credit history so you can avoid being victims of such circumstances in the first place.

Why a good credit score matters

Two close friends of almost equal, present financial standing applied for a home loan with the same bank. While one got an approval letter within a week, the other was still waiting for hers a month after the application. There may be many of you who can empathise with the second friend because you have gone through this or something worse yourself. Most people apply for a loan to fulfil a dream, and it is indeed painful when the dreams turn futile. So, it is very important you know what a credit score is, who credit rating agencies are and why they make a difference in everyone’s lives.

Credit rating agency – The most popular of such agencies in India is CIBL. This agency collects payment information of millions of people on a regular basis and stores them in a confidential manner. Banks which are registered with CIBIL pass details about the number of loans or credit cards a person has, the number of times a person applies for a line of credit, payment pattern of a person, spending habits, ratio of debt to income of an individual, number of late payments made and by how many days were they late, if a person was ever declared bankrupt, employment and residence information and much, much more.

Credit score – Using the information collected from trusted sources, the credit rating agency maintains a report, like a financial evaluation report of a person which can be obtained only by that person to whom the report relates to and registered members of CIBIL, for a small fee. CIBIL also awards a 3 digit score to a person based on his/her financial report. The score can range anywhere between 300 and 900. Higher the score, the more credit worthy you are considered.

Why are they important

India is a country dominated by youth – youth that are becoming more skilled which leads to more employment and more spending power in their hands. It is also one of the fastest growing economies in the world. Naturally, the number of people applying for lines of credit, be it a home loan, personal loan, auto loan or credit card, is on the rise. Doesn’t this seem like fertile land for lending institutions? Here are a few reasons why they still heavily rely on credit scores and more than 10,000 enquiries are made of CIBIL on a daily basis by them:

1. The credit score is a clear indication of how well a person manages his finances. The score after all is awarded after CIBIL collects a lot of information and prepares a whole report on it. Banks would be happier to lend money to people who have a good sense of balancing their expenses against their incomes as that would imply their chances of getting their money back and earning interest is higher.
2. People may try to cover their past poor track records with various lenders or credit card issuers. Some people wilfully choose to default on their debts, especially with credit cards. To banks, the credit reports are bare-all tools that would not let anyone hide and take undue advantage of banks.
3. The reports also indicate if a person makes it a habit to live more on credit or make late payments, both of which ringing bells of alarm for bankers.

So remember, it is virtually impossible for you to now get a loan or card if you do not have a good credit score. It is important you get to know what yours is right away and work on improving it if it is not up-to-the mark.

Telecom payment details may get linked to credit scores

Mobile bill payments may become part of CIBIL’s evaluation

The credit rating analysis of CIBIL, India’s premier Credit Information Company, may soon involve lenders scrutinizing mobile phone bills’ payment details of customers to gain a better insight into their credit history. If you have carelessly defaulted on your mobile phone bill payments, your credit scores could suffer, and this would impact your chances of securing a bank loan or even a credit card.

Credit Information Bureau of India Ltd (CIBIL) assigns credit scores in the range of 300-900 to individuals along with providing them a detailed Credit Information Report of their credit history. The higher the credit score, the easier it is for a customer to borrow money from the lending institutions across the country. It is recorded that almost 80% of loans are sanctioned to those individuals who have a credit score of 750 and above.

Telecom, bank defaults have strong correlation

Top officials at such Credit Information Companies feel that the reason is not far to seek. Globally, there is a convincing correlation between telecom payment defaults and banking defaults, they say. By seeking details on telecom payments, insurance premium payments and other utility bills helps Credit Information Companies offer a comprehensive look at the consumer’s behavioral pattern with respect to credit which can forewarn lending institutions of the individual’s willingness to repay.

Looking at the mobile penetration in the country, sharing of telecom payment details ought to help improve credit profiling of consumers. Private telecom operators have been requesting CIBIL for years to get mobile phone payment details into the individual’s credit history to get the customer to realize the ramifications of defaulting on payments and also enable easier collection of dues.

CIBIL data used for deciding credit limit on post-paid connections

Telecom operators are presently using CIBIL’s credit score along with the client’s ability to repay to take a decision on post-paid limit for customers of mobile connections. When a customer applies for a post-paid connection, the operator enquires with CIBIL for his/her credit score along with their credit history based on the details provided in the customer’s application that also includes his/her income details. This is the basis that telecom companies use for evaluating the customer’s financial health and taking a decision on how much credit limit to offer to the applicant.

Top officials at CIBIL point to various World Bank surveys that indicate reporting of non-financial payment details such as telephone bills, insurance premium payments and electricity bill payment details can help banks take a call on money lending to an individual.

Still early days for telecom companies to share data

There are many benefits that could accrue after telecom operators start sharing data with credit agencies, such as better profiling of first time borrowers, but there is also a disadvantage that merely a telephone bill default could deprive an individual of a loan facility. Banks may definitely have to take a more cautious stance on telecom defaults while lending money. The permission to share data of telecom operators will take a little longer because of the regulatory hurdles but will have a big impact so far as credit profiling in the country is concerned.

Though telephone defaults are still a long way away from possibly impacting your chances of getting a loan, there are other areas where more caution is advised. For instance, applying for new loans should always be avoided as much as possible. Even the mix of credit you currently utilize can impact your chances of getting more loans. An ideal mix would be a home loan, a car loan and a credit card. The more the number of credit cards and higher their %utilization of credit limit, it would reduce the individual’s financial capability to repay fresh loans and this is hence viewed negatively by CIBIL.

Is a poor or no Credit Score the end of the line for you?

Recently, a middle-aged person tried getting a loan from his local bank. He had taken a small vehicular loan about 10 years back and had paid it off on time, without a single late payment. He has never felt the need to take another loan or maintain a credit card. He received a jolt when he was denied a loan by the bank because he did not have a credit score, when he applied for it this time. Have you faced a similar problem and are wondering what to do about it? Don’t see a road ahead of this obstacle? Then it is time you learn more about credit scores before you try applying for a loan again.

Any reputed Credit Repair Company will provide a comprehensive list of corrective options, but here are some of the common ones for your easy reference:

1. The lack of a credit score should definitely not be a dead end for you. It is important you find a bank that may agree to lend you a small loan even without a credit score. They may charge you a high interest rate as they may consider you a slightly bigger risk than usual, but if you are keen to create a credit history and credit score, you will have to run the loan for some time. When the bank reports your timely payments to CIBIL, your credit history would then be created and you can get a score.

2. If you have got a credit report and your CIBIL score is poor then it is important that you quickly work on taking up the task of rectifying the issue straightaway. Firstly, check the credit report and ensure there are no fraudulent cards or loans showing up there. If there are any, immediately report it to CIBIL and contact the bank named in the report to get the entry removed from your report. If you can provide sufficient evidence that the entry should be deleted, CIBIL will issue a new report within 30 days and will re-assess your score.

3. The second thing you should do is close all unwanted credit cards by completely paying them off or consolidating your debt. Too many loans and credit cards showing on your report indicate you live a life above your means, which necessitate you to borrow large sums of money. Some cards may have a small balance that you have been ignoring for a while but is now seriously jeopardizing your credit worthiness. Go ahead and close them immediately by paying them off. Look for a bank, which can offer you a loan big enough to consolidate 2-3 of your cards and loan debts at a reasonable good interest rate and close the multiple accounts to have one debt account.

4. Lastly, ensure you start making your payments on time for all your loans and cards. Late or non-payments are the biggest obstacles to getting a good credit score whereas prompt payments will increase your score dramatically in just a few months’ time.

Take these few steps and get a good credit score in place today for a secured financial future.

Making yourself financially rich

India is still one of the countries that believe in saving for a rainy day rather than living largely on credit. Thanks to the money saving tips passed on by our elders to us, we are familiar with different saving and investment options. There are, however, times when you must rely on someone or an institution for financial aid.

In the past decade, lending institutions have made a number of lending policy changes that affect us directly. Apart from the usual changes in interest rates and closure formalities, they have also strictly started following a credit check routine.

What does this check involve?

When you understand how the check works, you will also perceive the credit score meaning. Credit scores are a measure of how reliable you are as a re-payer or borrower. Whether you are taking an electronic gadget on a short-term loan basis or you are building a house worth a crore, the moment you approach a lending or finance institution, they will try to find out what your credit score is. Ranging from 300 to 850, a credit score of 720 and above is supposed to be excellent while a score between 600 and 720 is considered moderate. Anything lesser than that; you run the risk of not being able to get any type of credit.

Credit scores and ratings have been popular in the Western countries so far and have recently made an entry in the Indian market. Managed by CIBIL in our country, the credit score is based on the following factors:

1. How promptly you repay you loans and credit commitments. Any late payments affect your score negatively.
2. The number of credit commitments you have – an excess of this and you may not be eligible for any further credits.
3. The duration of your credits – if a loan has been on-going for a very long time and there have been payment issues in the meanwhile, you are not considered a safe risk.
4. The ratio of the amount of debt you owe and your income at any given time (known as the debt to income ratio)
5. Any bills that are paid at the end of a beginning cycle – post paid bills.

There were days when sufficient ID and address proofs and employment details were sufficient to get a loan. Now-a-days, even if you have an excellent track record with private lenders and do not have a good or any credit score, all your financial transactions do not improve your credit worthiness. So while it is important to have some amount of credit and to manage them wisely, it is also important to note that all of them are being recorded by several rating and monitoring Government bodies and you must be careful about keeping a good track record to have a good credit score.

If there are any further tips you require about scores and how they can be improved, there are several agencies that can easily help you with such tips and help you make your life financially secure.

Financial health – For businesses and people

The financial world is an arcane one that involves a lot of rules – some simple logic and some complex legal ones. In this world of a myriad of financial transactions taking place physically and online, it is tough to keep a track of the ever-changing guidelines. For the better or worse, money-lending institutions and even some employment agencies have started keeping a track of the credit-worthiness of a person. But, not just private individuals are subject to this rule; even companies big and small fall under the scanner.

Money has to be lent from time to time by people and companies alike. The simplest way for one to be eligible for loans and overdrafts is by maintaining a good credit score. Credit rating meaning, however, is slightly different. Credit scores are usually given to individuals and in India are managed by CIBIL, a government body that provides credit reports based on the scores collected by the reputed credit score company – TransUnion. Credit rating is assigned to government and private organizations all over the world by companies such Fitch & Moody and Standards and Poor. Unlike scores, ratings are in the form of grades such as AAA+ or B-, depending on how a company or even a nation’s economy has performed.

What does it mean for a common man?

Credit rating is not what a private individual needs to focus on. His focus lies on achieving and maintaining the best possible credit score at all times. Why is it important?

1. You will only be eligible for loans and financial credits from banks and finance companies only if you have a satisfactory credit score.
2. Large transactions that have an element of credit, such as the purchase of expensive jewellery or electronic goods, will be declined if you do not have a credit card from a major bank (unless you save for the purchase, which may take a long time). Credit cards are now-a-days only issued to people with good credit scores.
3. Some companies will run thorough background verification about your financial history using your PAN. Pan, of course, is the key to a credit score, as well. Maintain a solid financial reputation by keeping a good credit score.

Banks place special emphasis on good credit scores. They urge people to keep a track of their scores by ordering a credit report from CIBIL. If the scores are not satisfactory, you can take advice from credit health improvements agencies that have come up recently in India. This will help you tackle low credit scores and getting past thorny issues like bankruptcy and defaulted loans.

Credit scores can be improved by:

1. Making all your payments on time.
2. Maintaining a healthy debt pattern.
3. Not exceeding in debts and limiting the number of credit cards and loans.
4. Making all your bill payments on time.
5. Having an adequate debt to income ratio at all times.

Credit scoring can also be worked upon by companies by asking for appropriate guidance plans from the agencies that help people with their scores. You just need to ask and diligently follow their steps and enjoy a healthy financial life always.

Think like this for a better credit score

Since CIBIL has made it clear that having a good credit score is mandatory for getting loans approved, there is no end of our worries about the situation. With our financial needs increasing every day, at times it feels impossible to have a better score.

Like all good things, a good credit score is a matter of habits practised and maintained over a period of time. If you think about making a better score just by stopping to buy altogether, chances are high you are not going to reach the score. Rather think like this to get the score ad maintain it:

• Understanding your finances

Understanding why we need money is the key to any financial solution. Though it may seem stupid, just think for a second: why do you need money? Is it for a better life? For a better car? Or is it for some lifestyle product?

Most of us cannot answer this simple question at the first go, because, this is perhaps the most difficult problems of our life. We need money to sustain ourselves. According to Classical Economics theory, all our basic needs must be managed first: food, shelter, clothing, health needs so on and so forth. So, ask yourself before taking any loan or making any big investment, is it going to change your life significantly? Is it related to the basic needs?

• What about our desires then?

Granted most our big purchases like the sedan or the 3BHK apartment in a posh location or even a fancy educational degree are a result of our perception about a better life, we still need to sort out the ‘desire’ part.

Prioritise your needs and wants. Keeping a clear understanding about what you need more than anything else will magically transform your buying habits.

• The practical steps

As these more philosophically attuned steps will help you in life, try these steps to increase credit score:

a) Always have a very clear understanding of how the interest rate will be calculated for a specific loan. Sometimes every day interest rates are being calculated, meaning you can lessen the burden if you go on paying with smaller amount along with the EMI. It may sound utopian, yet think, how many times did you utilise a surprise monetary gift or bonus in a constructive way?

b) Creating assets like property is not the only way to invest. Your credit rating reflects a lot about how you think about investment or whether you think about it at all or otherwise. So once you are at credit-wise happy condition, think about investment in terms of bonds and shares or even gold.

c) Financial institutes rely upon credit-worthy consumers for their profit. So, please maintain a good rapport with your bankers. When in need, along with your credit management consultant, ask your bankers about managing your credit.

It is necessary that you, as an informed consumer understand that credit score will depend upon not only your buying habits, it will benefit from some amount of investment/savings, as well.

Pass the test with these ideas

Meet the new number of financial security: 750. Yes, for most banks and financial institutions, this is a score that makes you a desirable borrower. And this score, has been generated by CIBIL is based on about 280 parameters. We are all trying to figure out ways to get that healthy score and make it easier for us to obtain credit.

The primary purpose of CIBIL is to help the banks exercise financial prudence to judge borrower loan applications and reduce risk of non-repayment which makes their profitability more predictable. It is the banks’ helping hand in the corporate world. So, proactively manage your credit health with professionals showing you the way. Read on.

• Credit Information Report: Credit History with a Credit Score

What CIBIL provides you and the financial institutions is your comprehensive credit history with a credit score. The banks do their analysis based on their internal policy and guidelines.

Now once you get a score, CIBIL’s work is done. Let’s say your score is not the perfect one, then what do you do? How do you repair the damage? The score is a one-time result at a given point of time, so what are the ways to improve the score over time? These will require professional analyses and without the best credit repair service, you will never be able to get the perfect score easily.

In case of errors

Banks and CIBIL being run by software developed by mortals sometimes have discrepancies in your credit information report. Once you get your credit information report, checking each and every part of the report is absolutely essential. Having a pair of professional eyes trained to spot every kind of discrepancy in the data will make the comprehensive verification process easy for you.

Tips on financial management

Over the years, some of us have developed an innate hatred towards Credit Cards. We prefer to carry the Debit Card and cash. Yet, using the Credit Card to your advantage can win you some brownie points with CIBIL, as well.

Timely and controlled Credit Card actions will show you favourably on your CIBIL report. Besides, carrying large amount of cash is never a good option. Banks do not report your Debit Card transactions but report your Credit Card payment transactions. Also, enjoy credit card discounts and cashbacks as major retail brands have partnerships with leading Credit Card institutions.

In this era of e-Banking, millions apply for financial assistance online. Along with credit reports, banks are relying on your social data to assess your financial status and capacity. Marker research giant, Euromonitor predicted that UK consumers will be spending more than 320 billion pound just by analysing their data on facebook. Without professionals helping you out, you will never know what else is affecting your credit score.

Get help from Credit Clear Management Consulting Services to improve your CIBIL score. Rely on them to correct any discrepancy and liaison with financial institutions for settling your debts.