Difference between Credit and CIBIL score Ahmedabad 9426497770 /079-40099917

Loan, credit card rejected? low credit score call 079-40099917 VERITAS -Independent Financials Advisors, Ahmedabad INDIA www.veritastheteam.com

1. Difference between Credit and CIBIL score

a. Credit score

A Credit Score is a three-digit number that sheds light on how you handle credit. In adult lives, it is normal to do financial transactions on a regular basis. And availing credit when required for various purposes is one of them. It is also like a progress report for your credit behavior. Consistently good credit conduct fetches you a higher score (out of 900) and any slip up will result in a lower score. It will be difficult for you to secure a loan of any kind, especially unsecured ones like personal loans and credit cards with a low score. In case, your application gets approved, it will be at a higher interest rate than usual.

b. CIBIL Score

People often think credit score and CIBIL score to be synonymous. However, it is not. India has 4 credit rating agencies to assess your credit score, and TransUnion CIBIL is the premier one among them. It has affiliations with almost every bank, gauging the creditworthiness of millions of individuals and enterprises. A high score from them not only denotes your excellent financial discipline but also your integrity. Every time you apply for a loan or a credit card, your recent score (last 6 months) is checked. Generally, any score above 700 is considered good, though some banks keep the bar high and some do not mind lowering the yardstick.

2. How to get your CIBIL Score

It is easy to obtain your recent CIBIL Score from the website itself. Relying on financial institutes is not a good idea as each inquiry from your side can result in a dip in your score.

Step 1: Select any of the plans below

1-month Subscription – Rs. 550

6-monthly Subscription – Rs. 800

1-year Subscription – Rs. 1200

Step 2: Type in your personal info as requested in the online form

Step 3: Enter the captcha shown in the box and accept terms and conditions, before proceeding towards the payment page

After making the payment and authenticating your account, you will be sent the credit report to your email id in 24 hours. You can also send the print-out of your duly filled application form to the company directly to receive the score by post

3. Factors that affect CIBIL Score

a. Repayment history

Past behavior is an indicator of future behavior. Every time you avail loan or credit, the lender is dutybound to report it to the CIBIL. The bank takes note of whether you repay debts on time. If you make an effort to repay in advance, it is seen as a positive sign. This shows that you can be trusted to repay the amount you owe.  

b. The drastic increase in credit

As an earning person, you may have a certain credit limit (whether it is for a loan or credit card). However, using them to the brim indicates credit hungry behavior and banks see them as red flags. If you maintain a certain credit level all months, but suddenly seen spending significantly more, it can result in a reduced score.

c. Debt to income ratio (DTI)

Generally, lenders don’t encourage people to take more debts than roughly 40% of their income. So, DTI is used to gauge a loan applicant’s ability to repay based on his/her income. It is a good metric to inculcate financial discipline as well as to ensure that you can repay your future EMIs without feeling burdened.

d. Numerous loans

Having many loans in your name will always be a matter of concern to lenders – like a home loan, a couple of personal loans, a vehicle loan and credit card(s) on top of them. It is always better to close one before availing the next. Focus on closing the smaller loans as soon as possible – it will at least reduce the number.

4. Good Score and bad Score

CIBIL Score	What it means
850 – 900	Shows that you have never defaulted even once and is an excellent score
750 – 850	It is a fact that 79% of loans sanctioned are for people with 750+ score. Scores above 800 are considered high and you can easily ask for a lower rate on personal loans and credit cards
700 – 750	A good score for secured loans. But for unsecured credit, the bank might investigate further (like social score) or impose slightly higher rates
500 – 700	This shows that you have delayed or defaulted a few times in the past. Personal loans can be difficult to obtain from a bank. A private financier may levy hefty interest
300 – 500	Such poor score indicates too many discrepancies in past loan repayments to ignore. Unless you work on credit repair or improvements, it will be impossible for you to get a loan from any bank in the country

5. Why CIBIL Score matters

CIBIL Score is like a progress card report for your financial integrity. It is an indicator that tells a lender that ‘yes, you can give the loan’ or ‘oh no, it doesn’t look like he/she will repay’.Listed below are reasons why you should always keep your CIBIL Score high.

a. For secured loan approval

There is a misconception that it is easy to avail secured finances like home loans, auto loans etc. because you providing the bank with some kind of security. However, your past credit behavior will be looked into by the lender. This is how they decide the upper limit and the interest rate. With a questionable CIBIL Score, the overall process can get difficult.

b. Quicker approval of unsecured loans

A clean chit from TransUnion CIBIL when it comes to credit score is of utmost importance when you apply for loans without any security. Like personal loans, for instance. For a borrower with high CIBIL Score (say, 750+), it is easier to get it sanctioned. If your score is above 800, you might even get a higher amount than normally given by a bank.

c. More bargaining power on interest rates

Are you aware that interest rates vary for different loans at different banks? Some people end up getting a better deal than others. A higher CIBIL Score enables you to bargain with banks for a better rate or deal. You can easily compare the offers from lenders and authoritatively negotiate as creditworthy customers are assets for any financial institution.

d. A lesser premium for insurance

Insurance is another financial instrument that rides mainly on trust and credibility, whether it is life cover, medical insurance or others. Your repayment history, claims history and general handling of debts and dues – all these are tracked carefully by the insurance companies. This helps them determine if you can enjoy a lower premium compared to others policyholders with low credit score.  

e. Chance and choice to pick the best credit card

Credit cards, if used smartly, can give you a host of benefits. Though they allow a definite zero interest period, the interest rates can shoot up drastically if you delay or miss a payment. With a better-than-good CIBIL Score, credit card companies will vie with one another to give you the best possible deal. Otherwise, you can end up with a credit card with an impossibly high-interest rate or a rejection.

6. How to Improve CIBIL Score

One bad credit score is not the end of the world. You can still salvage your score by doing the following. But mind you, it will take at least 6 months, if not more, for the ‘improvements’ to reflect in your credit report.

a. Avail your recent credit report

This will help you understand your current position and where you slipped. For instance, if it is a couple of delayed payments responsible for your low score, make sure that it doesn’t happen again. It will also help you to correct errors if any or keep a target (it has to be at least 6 months).

b. Never postpone payments

The number of procrastinators is on the rise, thanks to the dramatic advance in technology. However, CIBIL doesn’t buy this excuse and you have to pay your dues and EMIs on time. Or else, the score will fall, period. It is better to automate your payments in the initial week of payday to avoid accidental delays.

c. Have a diverse credit-folio

This will act as proof to the lender that you are adept at handling different kinds of credit. Having a blend of secured loans (house loan, car loan) and unsecured loans (personal loan, credit card) can do that. A higher leaning towards unsecured loans is not looked upon favorably.

d. Don’t have unused credit cards

It is never a good idea to keep one or more credit cards idle. If you are scared of maximizing limit, just use it for grocery shopping or fuel purchase and repay it at the beginning of next month. If you absolutely do not want to use a certain credit card, just close it.

e. Smart handling of debts

If it is seen that you are handling your debts smartly, the score can improve. For instance, we all know credit card works on revolving credit and can get unmanageable if we are not careful. In such a case, closing off the credit card dues with a personal loan is a smart move. This means you pay less interest and have the ability to solve a problem quickly.

f. No maxing out the credit

Just because your credit card allows you to borrow up to 2 lakhs doesn’t mean that you do that. Please make sure that you don’t upset the balance of debt-to-income ratio.

g. Not prolonging tenures

The vintage of the loan or credit is another factor that can impact your score. Say, if you have taken a personal loan with a tenure of 3 years, and have increased the tenure midway for a smaller EMI, it can cause your CIBIL Score to drop.

7. About TransUnion CIBIL Credit Agency

TransUnion CIBIL is a credit bureau or credit information company, incepted in 2000, the first of its kinds in India. We can logically conclude that the advent of credit cards in the country has contributed to its foundation. Based in Mumbai, it maintains data of the majority of bank and financier consumers in the country. They are known for their accuracy and transparency.

તમને જો નીચે પ્રમાણે ની કોઈ સેવાઓની  જરૂરિયાત હોય, તો  મેહરબાની કરીને અમારો  સંપર્ક કરવા વિનંતી  ઘર બેઠા સર્વિસ આપવામાં આવશે

1. Gumasta ધારા (દુકાનો અને મહેકમ) લાઈસન્સ & નવીકરણ
2. નોટરી / સોગંદનામું
3. જન્મ પ્રમાણપત્ર
4. લગ્નની નોંધણી / લગ્નનું પ્રમાણપત્ર
5. પાસપોર્ટ તાજા, નવીકરણ, મુખ્ય નાના
6. નામ ટ્રાન્સફર વીજળી , મ્યુનિસિપલ કોર્પોરેશન, ગેસ એજન્સી
7. પાન કાર્ડ નવા / કરેક્શન
8. gst return filing (through C A)
9. આવકવેરા રીટર્ન
10. કાનૂની દસ્તાવેજો સુધારાઓ
11. મની લોન્ડરિંગ લાયસન્સ
12. આરોગ્ય લાઇસન્સ
13. વ્યાવસાયિક કર
14. નિકાસ આયાત લાઈસન્સ
15. ડ્રાઇવિંગ લાયસન્સ, નવીકરણ, આંતરરાષ્ટ્રીય
16. મિલકત, બેંક, સરનામાં ટ્રાન્સફર માટે અરજી
17. વેચાણ કરાર, વેચાણ ખત

અમદાવાદ મા કોઇ પણ પ્રકારના સરકારી કામ માટે મળો

સર્વિસ ટેક્સ સરકાર કાયદા મુજબ લાગુ પડશે.

અમે તમને ઘર બેઠા સર્વિસ પુરી આપીશુ

Office:

VERITAS THE TEAM

127,Sahajanand Park

Nr Swaminarayan Temple

Shahibaug Ahmedabad 380004

Ph: 079-40099917,9426497770

Mail :veritas.smeet@gmail.com

www.veritastheteam.com

Does Loan or Credit Card Settlement Affect Your Credit Score? Ahmedabad 9426497770/079-40099917

Loan, credit card rejected? low credit score call 079-40099917 VERITAS -Independent Financials Advisors, Ahmedabad INDIA www.veritastheteam.com

Does Loan or Credit Card Settlement Affect Your Credit Score?

You have been struggling to make your credit card or loan repayments for a few months now. Bank officials and recovery agents have been breathing down your neck to make these payments. You have explored all potential options, but nothing has materialized. You have grown tired of all this. You decide to approach your bank for Settlement.

What Does the Loan/Credit Card Settlement Mean?

A settlement means that the bank agrees to accept less than what is due. For instance, your credit card outstanding is Rs 5 Lacs. It takes Rs 3 lacs and closes the loan/card account. Essentially, the bank forgets about the remaining amount. No interest payments or penalties for this account in the future.

Do note settlement is only for unsecured loans. For secured loans, the banks won’t be so kind as to accept less than the due amount. They will first sell the security and if there is still some portion of the debt to be repaid, they can think about settlement.

Does Loan/Card Settlement Affect Your Credit Score?

Though I have read conflicting accounts of whether debt settlement affects your credit score, I am more inclined to believe that your credit score will be affected if you opt for debt settlement. After all, you haven’t made the complete payment to the lender and you must be penalized for this.

You must also note that nobody goes for debt settlement at the first signs of debt trouble. For instance, you will not call your bank to settle your loan/credit card debt just because you feel you won’t be able to pay next month’s EMI or credit card bill. Even the bank won’t agree to your offer (or make a settlement offer) so soon. It is only when your debt troubles are obvious that the bank will agree to take a haircut. Banks don’t indulge in charity. Unless they have lost hope of full recovery from you, they won’t agree for a settlement. Therefore, your credit score would have already taken a hit due to prior non-payments. Whether debt settlement affects your credit score even more (over and above the hit took due to non-payments) is a question for me too. Credit bureaus have proprietary score calculation method and may treat settlements differently.

At the same time, the credit score is just one part. Your credit report contains a whole host of other details. If you opt for settlement, the relevant account will show as “Settled” in your credit report. The banks will clearly dread this and won’t be comfortable in lending to you in the future. Therefore, your chances of getting a loan in the future will go down. You may be charged a higher interest rate for any loans in the future. Your loan eligibility may also drop due to a prior debt settlement. For this reason, settlement must be your last resort.

How Much Would the Bank Settle For?

Difficult to comment. May vary from case-to-case basis. Clearly, the bank will not settle for a very low amount. And there is no reason why it should. It would want you to pay the maximum you can pay. If your finances are clearly messed up, the bank would agree to a bigger cut. The bank would (and should) also look at your intent too. It cannot happen that you have loads of assets and you are not selling them to repay the loan/credit card debt.

It is easy for us to portray banks as evil. However, they are playing by the rules. We have reneged on the terms of the contract. The bank does not want to be short-changed either. That the corporate borrowers short-change them so regularly is a different matter altogether. They can’t let retail borrowers get away so easily.

The banks may have internal policies about settlements. However, as I understand, the extent of haircut (loss to the bank) will also depend on a case-to-case basis. There won’t be any well-defined formula. You can expect extensive negotiation too. As a borrower, you know that a settlement is a settlement. You know that your credit report will reflect this account as Settled, irrespective of the quantum of the haircut. The less you pay, the better it is for you. Well, the banks know this too, and they would want to maximize their payment.

What Aspects You Must Keep in Mind?

Get everything in writing. Don’t go by promises made by customer care executives over the phone. In the financial services industry (not just banks), they will promise the world to you over the phone to get you to part with money. You don’t want to part with your money and then realize that the funds have been used to settle the balance in a regular way (and not as settlement). In that case, you will still have debt outstanding and the bank’s interest and penalty meter will keep running.

Insist on settlement offer over e-mail from official IDs or physical letters. In case of physical letters, do check that the letter is on the letterhead, has bank seal and a reference number. Essentially, you must ensure that the letter is genuine. You can scan the letter and e-mail the letter to the customer care and ask them to confirm if the letter has been issued by the bank. Fortunately for you, banks must keep records of such letters. For a quick response, you can always escalate to higher management.

Don’t pay by cash. Pay using cheque or demand draft or net banking. While handing over the cheque, insist on a letter that contains the details of your payment and the purpose of payment.

To put it in a crisp manner, once you have mentally prepared yourself for the settlement and the associated consequences, ensure that you are not short-changed by the bank. Don’t go by words, go by the letter. Get everything in writing.

A settlement is your last resort. A prudent borrower must never find himself in this situation. Don’t borrow more than you can afford to repay. Look for early signs of debt trouble and take proactive remedial action.

તમને જો નીચે પ્રમાણે ની કોઈ સેવાઓની  જરૂરિયાત હોય, તો  મેહરબાની કરીને અમારો  સંપર્ક કરવા વિનંતી  ઘર બેઠા સર્વિસ આપવામાં આવશે

1. Gumasta ધારા (દુકાનો અને મહેકમ) લાઈસન્સ & નવીકરણ
2. નોટરી / સોગંદનામું
3. જન્મ પ્રમાણપત્ર
4. લગ્નની નોંધણી / લગ્નનું પ્રમાણપત્ર
5. પાસપોર્ટ તાજા, નવીકરણ, મુખ્ય નાના
6. નામ ટ્રાન્સફર વીજળી , મ્યુનિસિપલ કોર્પોરેશન, ગેસ એજન્સી
7. પાન કાર્ડ નવા / કરેક્શન
8. gst return filing (through C A)
9. આવકવેરા રીટર્ન
10. કાનૂની દસ્તાવેજો સુધારાઓ
11. મની લોન્ડરિંગ લાયસન્સ
12. આરોગ્ય લાઇસન્સ
13. વ્યાવસાયિક કર
14. નિકાસ આયાત લાઈસન્સ
15. ડ્રાઇવિંગ લાયસન્સ, નવીકરણ, આંતરરાષ્ટ્રીય
16. મિલકત, બેંક, સરનામાં ટ્રાન્સફર માટે અરજી
17. વેચાણ કરાર, વેચાણ ખત

અમદાવાદ મા કોઇ પણ પ્રકારના સરકારી કામ માટે મળો

સર્વિસ ટેક્સ સરકાર કાયદા મુજબ લાગુ પડશે.

અમે તમને ઘર બેઠા સર્વિસ પુરી આપીશુ

Office:

VERITAS THE TEAM

127,Sahajanand Park

Nr Swaminarayan Temple

Shahibaug Ahmedabad 380004

Ph: 079-40099917,9426497770

Mail :veritas.smeet@gmail.com

www.veritastheteam.com

How Long Does it Take to Improve Credit Score? Ahmedabad 9426497770 / 079-40099917

How Long Does it Take to Improve Credit Score?

Improving your credit score is not an overnight process, it requires both time and patience. There is no easy way to improve or repair your credit score. Therefore, getting impatient after seeing your low credit score is not a way out, but applying a correct approach in getting it increased will be a wise and responsible decision.

People with low credit score generally have difficulty in getting a loan sanctioned under their own name or face problem in availing a new credit card, as each and every financial institution thoroughly checks your credit report and specifically credit score, before offering you any lending product. A bad or low credit score can hamper your creditworthiness and can further increase your financial problems. Your credit score is increased or decreased because of several factors, such as debt amount, payment history, new credit and length of credit.

→ Check Your CIBIL Score FREE at Paisabazaar.com

Credit scores of individuals with no credit history or nil usage of credit can be improved in few months, but individuals with loan debts or missed EMIs (Equated Monthly Instalments) payments can get their score improved, relatively in lesser time. Presently, there are four major credit bureaus that provide credit scores to Indian customers, such as TransUnion CIBIL, Experian, Equifax and CRIF High Mark. Every time lender reports your credit report to the credit bureau, your credit score changes.

What is the Purpose of Credit Scores?

The primary motive of credit score or credit report is to assist banks to decide if the person is worthy to access a loan. Hence, your credit score plays an essential role in fulfilling your financial needs, since it functions as the foremost judging aspect for the lender. The better the score, the higher you build chances for your credit card or loan to get approved.

How to Get Your Credit Score Up?

There are several people who hold a poor credit or CIBIL score. For such individuals acquiring an approval for a credit card or other financial aid can become a significant problem. If you have a lower CIBIL record, then the chances of acquiring a loan or credit card accessibility can be improved only when you try to enhance the credit score to a satisfactory level mentioned by the banks.

Most people aren’t aware of this fact, but it takes a minimum of 12 to 18 months to improve one’s credit score. Further, it is decisive to spot the measure of damage on your score that behaves as a factor to determine how long it would take to enhance your credit ratings. In India, it is seen that banks and financial companies do hold a different CIBIL score range for different products.

Let us understand some of the basic features related to credit score and ways to improve it.

Credit Score is a 3-digit numeric that ranges between 300-900, which depicts your creditworthiness and summarizes your financial repayment capability and capacity. According to credit bureaus any score close to 900 is considered good, however score above 750 is also marked as decent enough to make you eligible for numerous financial products. Credit score below 750 requires time to increase but still there are possibilities for an individual to make it reach to the mark of 750 and above.

Below mentioned are the important measures that help to improve your credit score:

Improving Payment History: By regular and on-time payments of credit card EMIs and loans, your payment history gets improved that eventually results in an increase in your credit score. Even if you miss single payment of credit card or loan EMIs, your credit history gets hugely impacted that results in the fall of your credit score. Thus, an improved payment history plays the most vital role in building your credit score.

Lowering Credit Utilization Ratio: Credit utilization ratio is the second most important factor that influences your credit score. To maintain good credit utilization ratio, one needs to use less than 30% of the total available credit limit. Use of credit above 30% could lead to decrease in your credit score. Therefore, to avoid the expense burden on one single credit product, it is better to divide the burden by availing multiple credit lines, as it helps in reducing the credit utilization ratio in near future.

Maintaining Good Mix of Credit: Mix of credit can be maintained by availing more of secured loans, as compared to the unsecured loans. Secured loans, such as home loan helps in the increase in the credit score as they are termed as long-term appreciating asset. As the repayment tenure is higher for home loan, it becomes evident that borrower shall be making regular payment for longer duration to the lender, which will help in maintaining and balancing the credit score.

Avoiding Closure of Older Accounts: Most of the people have this misconception that closing the less functional or old accounts may help in the increase of their credit score, which is false. So, it is always recommended to not close your old accounts or old credit cards, as it negatively impacts your credit score. Older accounts show your long-term association and connection with the banks or NBFCs (Non-Banking Financial Companies), which is considered good by the credit bureaus. This further helps in the improvement of your credit score.

Regular Monitoring of Credit Report: Consumers need to regularly check their credit reports, as it is an important practice in maintaining and rebuilding their credit score. There could be instances of incorrect or inaccurate personal information being contained and displayed on your credit report, which is supposed to be immediately reported to the credit bureaus by submitting disputes. Error free credit report can further be checked for managing personal finances and to avoid being a victim of identity theft.

Not applying for Multiple Credit Lines: Applying for multiple credit products at once depicts you as a credit hungry person, and this credit hungry behaviour is immediately tracked by credit bureaus which further leads to fall in the credit score. Therefore, avoid applying for multiple credit products at once to rebuild your credit score. Even banks and NBFCs doubt in giving approvals, as they find a person at high risk who shall be unable to pay the loan amount on time and incur losses for the lender.

Using atleast one Credit Card: Individuals who are new to credit or do not have credit history needs to use atleast one credit card to firstly have a credit score generated for them. Once they have a credit score, availing new lending products shall become easier in the near future.

Do not exhaust available Credit Limit: If an individual possesses only one line of credit then he/she shall tend to exhaust his/her available credit limit because of necessary expenditure. This expenditure and burden on one credit product eventually results in the downfall of credit score. If in case you want to add any credit line, then avoid unsecured loans as availing them also leads in the reduction of your credit score.

Hence, by now you must be having a better insight on how your credit score gets impacted positively or negatively. Thus, improving your credit score is about making wise financial decisions and having the time and patience to make them give positive results.

Additional Tips to Raise Credit Score

If you are still searching for ways on how to increase credit score, then here are some additional tips that can be considered and implemented for refining credit rating scores.

An individual’s credit score is affected if he/she enquires about other credit cards. Therefore, one should avoid this practice as quickly as possible. An individual can investigate a credit card through the online platforms conveniently without actually interacting with the different credit card companies.

An individual needs to prioritize and balance things which are necessary to purchase and desired to purchase. But how to raise credit score fast? You should maintain a list of all the items which you need to purchase and lessen the count of items as much as possible.

Reaching the credit limit can backfire at times. Therefore, keep a buffer limit and never cross it. For individuals, it is sensible if they can save some money to represent higher savings over time. This practice would lead to an improved credit score.

Make sure you do not borrow more for the repayment of loans and bills until and unless it is urgently required.

1. તમને જો નીચે પ્રમાણે ની કોઈ સેવાઓની  જરૂરિયાત હોય, તો  મેહરબાની કરીને અમારો  સંપર્ક કરવા વિનંતી  ઘર બેઠા સર્વિસ આપવામાં આવશે
   1. Gumasta ધારા (દુકાનો અને મહેકમ) લાઈસન્સ & નવીકરણ
   2. નોટરી / સોગંદનામું
   3. જન્મ પ્રમાણપત્ર
   4. લગ્નની નોંધણી / લગ્નનું પ્રમાણપત્ર
   5. પાસપોર્ટ તાજા, નવીકરણ, મુખ્ય નાના
   6. નામ ટ્રાન્સફર વીજળી , મ્યુનિસિપલ કોર્પોરેશન, ગેસ એજન્સી
   7. પાન કાર્ડ નવા / કરેક્શન
   8. gst return filing (through C A)
   9. આવકવેરા રીટર્ન
   10. કાનૂની દસ્તાવેજો સુધારાઓ
   11. મની લોન્ડરિંગ લાયસન્સ
   12. આરોગ્ય લાઇસન્સ
   13. વ્યાવસાયિક કર
   14. નિકાસ આયાત લાઈસન્સ
   15. ડ્રાઇવિંગ લાયસન્સ, નવીકરણ, આંતરરાષ્ટ્રીય
   16. મિલકત, બેંક, સરનામાં ટ્રાન્સફર માટે અરજી
   17. વેચાણ કરાર, વેચાણ ખત
   
   
   અમદાવાદ મા કોઇ પણ પ્રકારના સરકારી કામ માટે મળો

   સર્વિસ ટેક્સ સરકાર કાયદા મુજબ લાગુ પડશે.

   અમે તમને ઘર બેઠા સર્વિસ પુરી આપીશુ

   
   

   Office:

   VERITAS THE TEAM

   127,Sahajanand Park

   Nr Swaminarayan Temple

   Shahibaug Ahmedabad 380004

   Ph: 079-40099917,9426497770

   Mail :veritas.smeet@gmail.com

   www.veritastheteam.com

Does opting for EMI on credit card affect CIBIL score? Ahmedabad 9426497770 /079-40099917

Loan,credit card rejected ? low credit score call 079-40099917 VERITAS -Independent Financials Advisors, Ahmedababd INDIA www.veritastheteam.com

Does opting for EMI on credit card affect CIBIL score?

The very first criterion which determines the eligibility for any type of loan is a credit score. The credit score can be defined as a three digit numeric summary of the entire credit history of an individual which is generated by CIBIL. CIBIL stands for Credit Information Bureau, India Limited. This information is based on the monthly information that is provided to CIBIL by the various banks and the different financial institutions. Generally, an individual’s credit score appears between the range of 300 to 900.

When an individual applies for any kind of loan and submits the filled loan application form to a bank, the very first thing that the bank will check is the credit score of the individual and the credit history. If the person has a bad credit history and the credit score is relatively low, then the bank may directly reject the loan application. Rather, if the person has a good credit score, the bank would immediately pass the loan application and go ahead for further formalities. Provided that the CIBIL score or credit score is the primary and major deciding factor in order to help the person get the loan application processed, this is very important to know the factors which affect the credit score of an individual and take the necessary steps accordingly to improve the same if it is below the expectation.

What one must know before they go For an EMI on their Credit Card?

The digital payments are said to be the future of transactions in our country India. The young and the old Indians are slowly getting accustomed to this norm aspect. Now more & more people are choosing to use their plastic money over hard cash or real currency. No matter how big the volume of the transaction amount is, when given an option, the people will generally opt to use the credit cards for making the payment.

Some of the interesting reasons to do so are mentioned below:

• By using a debit card the individual account gets debited immediately.

• Whereas in a credit card, the bank provides a credit period to the customer during which the money balance in the bank account earns good interest. The card transactions help the customer earn loyalty points. These points can be redeemed for an array of benefits.

• At times, customers are offered to get an additional discount by using the credit card, in case if there is an offer on the card; for example a cashback offer. And obviously, with every additional credit card comes a greater purchasing power.

• So, one would agree that most of the people spend by using their credit cards also for high-value purchases. Now the important question is that should one opt to convert the high-value transactions (the ones which exceed an amount of Rs. 5000) into EMIs? It is important to examine its pros and cons in detail.

Suggestions in Favour of opting for EMI

• Converting the large amount into an EMI makes it easier to manage, since the cardholder is not loaded with the burden to pay the entire amount off in just a single month. The large amount is split up over a medium to the large period of time. For example, say three-month-long, six months long or twelve months long The EMI option is available depending on the value of the total transaction.

• Generally, the credit card companies levy a heavy interest rate on the outstanding bill amount. It may be something at the rate of up to 46%. But, by having an EMI as an option the rate of interest is considered to be much lower. It is something in the range of 11% and 18%.

• One can save the money by keeping it in the bank account, where it can earn good interest continuously, while the repayment of the card bill is being done in equated monthly installments.

• Aids in gradually building up the CIBIL score of an individual. Some of the people may find it tough to pay up a large amount in just a single shot. There might be a possibility of a default due to the lack of availability of funds to repay the debt, and not due to the lack of an intention to repay. Opting for an EMI helps avert such a disastrous situation for the person in the picture.

Let us take an example to understand this in a better way. The Newlywed Meesha observed, that “one need not invest a large amount of money in costly personal loans or to mortgage an asset with the bank in order to compensate for the requirements.” At the time of buying new furniture for their house, Raj and Meesha had been contemplating taking a personal loan that may have costed them to be around 19%. Rather they used their credit card for paying off their bills and other expenses, earned reward points and converted the large value transactions to easy EMIs at a relatively lower rate of 14%.

Suggestions in against opting for EMI

All that glitters is not gold. This is a very true adage, especially in the case of EMI which affect an individual's CIBIL rating or credit score. The factors going against opting for an EMI are as follows:

• An EMI blocks the credit limit of the individual to the extent of the amount of purchase. For instance, Ramesh had bought an iPhone 8, the cost of which was Rs. 75, 000 in October, 2018 by using his Credit Card. The credit card that he owned had a limit worth of Rs.1 lakh. Now due to this purchase, the available limit of his card is reduced to Rs. 25K. Thus, he requested the concerned authorities to convert the amount to EMIs of Rs. 7, 670 for a total of 12 months.

• Now every month, his credit card limit will be released to the extent of Rs. 7,670 only. This indicates that the limit of the card is blocked for the 12 months till the repayment is fully done. Also, Ramesh could not use the card to place any other high-value order until a significant limitation of the credit card has been freed.

• The Banks charge a one-time processing fee from the credit card holders to convert the large value transaction into an EMI. This fee is generally a percentage of the total transaction value. Most of the people fail to take into consideration this fee while calculating the interest to be paid. In reality, the net cost of converting the large value transaction into an EMI is relatively higher.

• It is definitely a better choice to opt for a smaller loan, like a loan against the FD, or a small personal loan or choose a gold loan at a relatively lower rate of interest and then pay off the entire credit card bill in just a single go. This would definitely be a cheaper option and even provide an individual with peace of mind, rather than the lingering worry every month.

• Also, not all of the credit card companies offer conversion of large amount transactions to EMI option. One must always check up with the bank or read their product checklist carefully in order to see if the card issuing bank would allow a customer to convert the large amounts into EMIs.

• Some of the banks might allow the people to convert the large value transactions to EMI but they might not allow the individuals to repay it. But still, if the individual insists, the banks might allow the person to foreclose their EMI upon the payment of an additional fee which may be of 1% or 2%.

Conclusion

Thus, converting a large transaction to an EMI is, undoubtedly, a very alluring option. But one must consider that whether it is the best option or not. Thus, one can only conclude from the above information that one must never opt for an EMI without actually calculating the real-time benefits of the transaction. One must ensure if the benefits are superficial or real. Is it alright for the individual to block the credit limit for such a long period of time? Or would he rather keep it free for any of the future use? If one does not convert a large amount of money to EMI, can he/she arrange for any other cheaper funds source? All of these activities definitely affect the CIBIL score of the individual. Also, if the individual skips to repay any of the EMIs, it further decreases the CIBIL score. So one must be very cautious while opting for an EMI on a large transaction which is above Rs.5000. This is because opting for an EMI on a credit card does affect the CIBIL score of the individual to a great extent in the long run. Also, all the future borrowings are affected due to a single EMI that affects the CIBIL score.

Difference between Credit Score, Credit Report and Credit Rating Ahmedabad 9426497770 /079-40099917

Loan,credit card rejected ? low credit score call 079-40099917 VERITAS -Independent Financials Advisors, Ahmedababd INDIA www.veritastheteam.com

Difference between Credit Score, Credit Report and Credit Rating 

Due to the interchangeable use of these closely related terms, there is often confusion between the terms credit score, credit report and credit rating.

Following is a table comparing these three terms**:

Credit Score	Credit Report	Credit Rating
A statistically generated 3-digit number that sums up your creditworthiness.	A historical record of the repayment schedules of all loans and credit cards of an individual.	This conveys the creditworthiness of companies, countries or governments.
A high credit score (closer to 900) improves your chances of getting a loan approved. A low credit score (closer to 300) adversely affects your chances of getting a successful approval on loans or credit card applications from lenders.	A clean credit report leads to a good credit score. The credit history of a good credit report proves that the borrower was good at managing various debt instruments.	Credit rating is usually denoted by grades, such as AAA, AA, B++, etc. A company rated as AAA would be able to raise funds at a much lower rate as compared to the companies with lower ratings.
Changes depending on how well or poorly the borrower manages his/her debt instruments, such as loans/credit cards.	An entry in your report stays for around 5 years till it is replaced by newer entries.	Changes depending upon the performance of the industry, the market or the company/country.

**The above table is indicative and the information provided is subject to change.

Credit Report for Business

A business credit report is also generated by various credit bureaus and these reports play a vital role in determining the sanctioning of business loans. Unfortunately, a free credit report is currently only available for individuals not for businesses, therefore you will have to pay a fee when you seek a business credit information report. Additionally, business credit information reports may take a few more working days to reach at the mentioned address as compared to an individual’s credit report, which takes about 7-10 business days to reach the mentioned address.

તમને જો નીચે પ્રમાણે ની કોઈ સેવાઓની  જરૂરિયાત હોય, તો  મેહરબાની કરીને અમારો  સંપર્ક કરવા વિનંતી  ઘર બેઠા સર્વિસ આપવામાં આવશે

1. Gumasta ધારા (દુકાનો અને મહેકમ) લાઈસન્સ & નવીકરણ
2. નોટરી / સોગંદનામું
3. જન્મ પ્રમાણપત્ર
4. લગ્નની નોંધણી / લગ્નનું પ્રમાણપત્ર
5. પાસપોર્ટ તાજા, નવીકરણ, મુખ્ય નાના
6. નામ ટ્રાન્સફર વીજળી , મ્યુનિસિપલ કોર્પોરેશન, ગેસ એજન્સી
7. પાન કાર્ડ નવા / કરેક્શન
8. gst return filing (through C A)
9. આવકવેરા રીટર્ન
10. કાનૂની દસ્તાવેજો સુધારાઓ
11. મની લોન્ડરિંગ લાયસન્સ
12. આરોગ્ય લાઇસન્સ
13. વ્યાવસાયિક કર
14. નિકાસ આયાત લાઈસન્સ
15. ડ્રાઇવિંગ લાયસન્સ, નવીકરણ, આંતરરાષ્ટ્રીય
16. મિલકત, બેંક, સરનામાં ટ્રાન્સફર માટે અરજી
17. વેચાણ કરાર, વેચાણ ખત

અમદાવાદ મા કોઇ પણ પ્રકારના સરકારી કામ માટે મળો

સર્વિસ ટેક્સ સરકાર કાયદા મુજબ લાગુ પડશે.

અમે તમને ઘર બેઠા સર્વિસ પુરી આપીશુ

Office:

VERITAS THE TEAM

127,Sahajanand Park

Nr Swaminarayan Temple

Shahibaug Ahmedabad 380004

Ph: 079-40099917,9426497770

Mail :veritas.smeet@gmail.com

www.veritastheteam.com

Here are 7 Effective methods to improve CIBIL score Understanding the Scoring Pattern. AHMEDABAD 9426497770/ 079-40099917

Loan,credit card rejected ? low credit score call 079-40099917 VERITAS -Independent Financials Advisors, Ahmedababd INDIA www.veritastheteam.com

Here are 7 Effective methods to improve CIBIL score

Understanding the Scoring Pattern

Before anything, first understand what is a CIBIL report and its scoring pattern.

So, an individual's CIBIL report essentially means a database and track record of all the past loans or credit cards with his/her name along with repayment history for regularity or irregularity as the case may be. This data helps to establish the 'financial behavior and financial discipline' of the individual and helps the banks to extrapolate the intent for repayment in future based on this the available data with your current actions and estimates of your current financial needs.

The scoring pattern of the CIBIL score ranges on a point scale of 300 to 900 with 300 being the lower end of the rating scale and 900 points being the highest creditworthiness rating scale of the individual.The higher score an individual is able to garner, the higher the probability of attracting lenders to queue up to offer better and better deals on loans. If you understand the scoring pattern, you are on right track to follow the next few steps to improve your CIBIL rating score card.

1. Clean the Credit Card

Clearing off all your credit card outstanding dues is a vital key to improve your rating. Plan your credit card spending in such a manner that you clear off your credit balances before the due date. This will go a long way to positively reinforce your CIBIL score. Good financial behavior and discipline is what lenders seek in their customers.

So, first and foremost clear off all the outstanding dues because unpaid outstanding amount month-on-month will reduce your score considerably. Possessing just one or maximum two credit cards is the way to go as it curbs your spending instincts plus it is easier to pay your outstanding amount in time and keep a check and track of your spending behavior.

2. Inaccurate Appeals

An individual must make sure that any errors in your credit report are appealed by the individual on the CIBIL website (www.cibil.com). Appeal only if you have a valid point of disagreement. Errors can happen and lenders also could make some typographical data entry errors and even software's are not immune from errors.

If any appeal to rectify reported error is pending, it is mandatory for the lender or financial agency/institution to address the appeal within a timeframe of one month (30 days). Once the error is rectified and addressed, the individual's credit rating score also automatically improves. Always apply for fresh credit only when the older loans or outstanding amounts are totally cleared. It always helps to get loan when you start with a clean slate.

3. Use The Oldest Credit Card

It is erroneously believed that credit card accounts no more in use should be deactivated. This is because mostly people are oblivious about the impact that it has on an individual's CIBIL report. Realistically, a good credit card account over a long period of time that has been managed well with timely payments of outstanding is a blessing in disguise. This gives the much-needed impetus to enhance the CIBIL score. So, the crux of the matter to improve creditworthiness is that a robust repayment track record of your credit card must be continued and held on as long as possible. The longer you hold a positive credit card repayment history the better your CIBIL rating scores.

4. Equated Monthly Installment Payments

When big ticket purchases are being made by an individual, like a four wheeler or apartment or piece of residential land, you will never be eliminated from consideration if you are prompt in repaying the EMIs on your credit card account. So, paying equated monthly installments of your past bigger loans on time will help in improving your track record to pay bigger amounts and thereby getting a higher CIBIL score/rating.

An individual possessing a decent amount of savings coupled with a good repayment track record of credit card bills enhances the rating.

5. (i) The 30% rule of credit utilization

Never ever use your credit card to buy each and everything. You have to keep the 30% rule in mind of credit utilization. Never exceed more than 30% of credit utilization and this will establish not only your credibility for financial discipline and financial management, but will also take your CIBIL score soaring with positivity. When your monthly saving balance is low, it will benefit to reflect a positive CIBIL score.

(ii) Enhanced credit limit

Whenever your rating is good, the bank will offer to enhance your credit limits on your credit card and never refuse to get an enhanced credit limit. It need not mean that you have to spend more but it only reflects the confidence of the bank in you. You can also ask your bank to increase your credit limit, as enhanced credit limit always has inherent plus points from rating agencies. In a nutshell, it effectively means you have more credit at your disposal but you maintain your utilization below 30% of your credit limits. So, the 30% utilization rule and getting enhanced credit limit is very important for a higher rating on the CIBIL scale.

6. Information on secured card

Just in case an individual has a bad CIBIL score, then getting a secured card from leading banks against a fixed deposit is the way to go. Leading banks like Axis Bank, ICICI Bank, Kotak Mahindra Bank, SBI, etc. offer a secured credit card against a fixed deposit of nominal amount. When you repay your balances on time, the CIBIL score soars high.

7. Improving rating through Peer-to-Peer Platform

One of the most effective yet not very known way to improve CIBIL score is using a peer to peer lending platform like Lendbox. There are many benefits of borrowing from a peer to peer lending platform. Unlike banks, Lendbox allow people with poor CIBIL score to register on the platform as long as they have valid reasons for their credit history. Getting a small short-term loan from Lendbox is really easy and there are no charges on prepayment. Repaying on time will improve your score on the CIBIL rating system too. If you do not know what Lendbox platform is all about, just search for how peer-to-peer system works and prepare to get your CIBIL ratings improved in the long run.

તમને જો નીચે પ્રમાણે ની કોઈ સેવાઓની  જરૂરિયાત હોય, તો  મેહરબાની કરીને અમારો  સંપર્ક કરવા વિનંતી  ઘર બેઠા સર્વિસ આપવામાં આવશે

1. Gumasta ધારા (દુકાનો અને મહેકમ) લાઈસન્સ & નવીકરણ
2. નોટરી / સોગંદનામું
3. જન્મ પ્રમાણપત્ર
4. લગ્નની નોંધણી / લગ્નનું પ્રમાણપત્ર
5. પાસપોર્ટ તાજા, નવીકરણ, મુખ્ય નાના
6. નામ ટ્રાન્સફર વીજળી , મ્યુનિસિપલ કોર્પોરેશન, ગેસ એજન્સી
7. પાન કાર્ડ નવા / કરેક્શન
8. gst return filing (through C A)
9. આવકવેરા રીટર્ન
10. કાનૂની દસ્તાવેજો સુધારાઓ
11. મની લોન્ડરિંગ લાયસન્સ
12. આરોગ્ય લાઇસન્સ
13. વ્યાવસાયિક કર
14. નિકાસ આયાત લાઈસન્સ
15. ડ્રાઇવિંગ લાયસન્સ, નવીકરણ, આંતરરાષ્ટ્રીય
16. મિલકત, બેંક, સરનામાં ટ્રાન્સફર માટે અરજી
17. વેચાણ કરાર, વેચાણ ખત

અમદાવાદ મા કોઇ પણ પ્રકારના સરકારી કામ માટે મળો

સર્વિસ ટેક્સ સરકાર કાયદા મુજબ લાગુ પડશે.

અમે તમને ઘર બેઠા સર્વિસ પુરી આપીશુ

Office:

VERITAS THE TEAM

127,Sahajanand Park

Nr Swaminarayan Temple

Shahibaug Ahmedabad 380004

Ph: 079-40099917,9426497770

Mail :veritas.smeet@gmail.com

www.veritastheteam.com