Most of the people when asked about how to chart out the way to financial success would mention spend less and save more. Can this be defined as the process to financial success? The answer is bot yes and no. Yes because one has to save to create wealth which is what is being advised and no because it is not just about spending lesser amount and saving larger portion of earning in the quest of financial success. Path towards being financially successful is far more complexed and needs both keeping focus various facets and consistent efforts.
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The mystification around credit score is a given. Despite that fact that the bureaus have been existing for decades globally and have been in India for over 16 years now, the people still get perplexed about the CIBIL score. Various theories keep doing rounds and people today when talk about credit profile management, only limit it to repayment of dues. There is no denial that repayment of the obligations has to be timely on an ongoing basis. Repayment carries the most weightage as far the score goes. But there are other important factors as well that impact the scores grossly.
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Just like one would have trustworthiness among friends, folks and colleagues, one needs to have credibility with the lending institutions as well. As the trustworthiness among the worldly people would help in personal growth, the credibility among the lenders would aid achievement of financial objectives. Akin to trustworthiness that would help in professional growth, the credibility with banks will give seamless access to funds that would be needed for both personal and business.
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If you have ever applied for a personal loan, auto loan, credit card, etc. then you may already know about credit score. It’s a numerical representation of your creditworthiness i.e. a score which is calculated and provided by several credit rating agencies viz. CIBIL, High Mark, Experian, etc. However, do you know how and why it’s calculated in the first place? Let’s find out.
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Some of the best startups are usually short on money rather than ideas and strategies. This is the reason why a business loan is a viable and practical solution for their investment requirements.
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Your credit rating is based on several factors one of which is credit cards usage. If your debt is low and you pay your bills on time, then you can expect a high credit score. However, repaying the debt in full and then not using plastic money ever isn’t the best thing that you can do for the rating. To understand why, let’s first take a look at how different credit card activities affect your rating.
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Every new year people resolve to achieve the set objectives. However, the vows fizzle out as time passes. Since perseverance is the key to any set goal, people find them juggling with various aspects of complex life lose out on the consistent effort. People wish if there were ways to achieve set out goals in shorter term. But, alas, there are no quick fixes in life. But if you are one who has resolved to improve your CIBIL score, following is the list of five easy tricks that can help you in accomplishing the target and maintain a good credit profile in 2019.
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The 3 digit number on a person's credit report called the credit score can have a 6 digit impact on their financial lives.
Freescoreindia provides people with the tools required to understand their credit profiles and unlock the power of their credit score.
By the virtue of being the first credit bureau in India, the credit scores colloquially are called CIBIL Score. The score given by any credit bureau is called credit score. There are four bureaus in India viz. Credit Information Bureau India Ltd (CIBIL), Equifax, Experian and Crif Highmark and all of them give out credit scores.
The bureaus in India rate an individual on a scale of 300 to 900. A credit score of 750 and above is deemed to be good and individuals in this score band will have faster access to funding. But a person with low credit score still may be able to get loans since the underwriting is based on various factors.
Your credit score shall not only impact the approval of loan that you apply, but also has the potential to influence the rate of interest beign charged. A lower rate of interest will result into huge savings. Therefore, it is highly important to be aware of the credit score.
Your credit report has primarily three sections. Personal information, details on all the loans and credit facilities that you would have taken and enquiries from lenders. Each of this broad information is critical to your access to credit and hence need to be looked at with care.
The credit bureaus assign credit score to an individual based on complex algorithms. Broadly, there are five factors that impact your credit score. They are:
One of the major reasons why one should check the credit reports regularly is a high error rate. As per a unique survey, one of four reports has errors. These errors can lead to severely impacting the credit score and diminishing the chances of access to loans at the time of need. To know more about the reasons why one should check score regularly read more from our blogs.
Unlike developed economies, where one has access to free credit score once in a year, people have to pay for the same in India. We at freescoreindia have resolved to extend free credit score for two reasons, first to bridge the disparity on availablity of free credit score and second to educate and spread awareness on this important aspect of every one’s financial life.
You can withdraw your credit report from any of the credit bureaus as many times as possible. This will not have any bearing on your credit score. However, the enquiries made by lenders can impact the credit score.