23-Jun-2017 written by : FSI-Team
Women in our society are today pushing the change. Today not only we increasingly find women taking up active full time jobs but also find them leading businesses of different lines, formats and scales. As more women become financially independent, they also are making a mark on the front of credit health. As per a recent analysis from Experian, one of the four credit bureaus in India, women have a better average credit score of 675 in comparison to men who have an average credit score of 670.
The analysis also points out that the women even fair better on the on-time payments against their debts than men. While women are doing better on this front, it is still important for them to clearly understand the importance of credit health and know the simple steps on how to boost your credit score.
Following is the five point guide to be followed for staying credit healthy.
Having a financial goal is critical. Establish clear financial goals, both short term and long term. From going on a small vacation to buying a car or a house, the goal setting is highly important. Clear goal setting and working towards it will only make you better off on financial health. Setting such goals with realistic time frames to achieve them will also facilitate a far more control and clarity on how to work towards ensuring achievement.
To know where the money is going is as important as the point one. A budget and tracker on spends will help you decide on where you would actually want to spend money and control expenses.
One very important aspect of budget that generally gets left out is debt. While income and expense becomes part of the budgeting exercise, most of the times, incorporating debt into budget does not happen. Debt is an integral part of our lives today and achieving financial goals without one seems to be a far-fetched dream. Therefore, making it part of the budgeting exercise will only assist in achieving the objectives. It will also help in establishing the quantum of debt that you would require to be able to fulfill your goal and plan for the repayment. Non planning on this front can lead to one impairing the credit health that can severely impact the credit profile and thus can derail the financial goals.
Marketers apply various psychological tactics to increase sales. However, it is important that one must not fall for them. Going out for shopping, have a list and completely refrain from impulsive buying on your credit card. Be aware of the fact that credit cards while are a convenient credit instrument, many people become victim of over spending and falling into debt traps due to these very easily available credit lines.
Not having an emergency fund is a bad idea. Today, women face a lot of financial challenges in life. From marriage to maternity, from health woes to divorce, women need to plan better on any emergency that may arise in life. Having an emergency fund will only keep up the confidence and moral apart from ensuring a good credit profile. Most of the people spoil their credit profile due to high amount of debt picked up at the time of exigencies in life. This again leads to getting rejected on loans that will hamper the financial goal achievement.
Managing debts is critical. This not only includes timely repayments on all loan obligations but also on how one would plan to pay these off. In case you have any additional fund, pay off the debts, especially the ones where you are getting a higher interest rate charged in comparison to the interest earned on investments. Credit cards are one such definite credit instrument where one must not keep outstanding for a long time
While all above points may get taken care of, it is of high importance that you undertake regular CIBIL score check. This will assist in keeping a tap on the credit profile and take corrective actions in case of any anomaly or discrepant data capturing on your credit report.
Be credit healthy, be credit wise.