03-Jan-2018 written by : FSI-Team
"There is no age for learning" the famous saying is so true. It not only holds good in all times and for all kinds of knowledge that one acquires, either on something new or even on what one would have been practicing for years.
Finance is one of the most important part of anyone's life and what finance is to one's life credit is to finance. Especially in today's day and age when one needs to keep going back to financial institutions to pick up credit to meet the aspirations on personal or professional front. Let us look at a few tips that form the basis of a sound credit and credit health.
This is something that we would have heard umpteen number of times. But how many of us are able to actually follow this simple principle of life? Consumerism is given and marketing gurus keep coming up with new and innovative ideas to push that product to a larger number of people. While fulfilling desires through materialistic possessions is not incorrect, going overboard definitely is. While one cannot renounce the world but it is important to understand and differentiate between a need and a desire.
To buy a car is a need but to go overboard and pick up a high end model that may put the strain on the finances is nothing but pure desire.
Tip # 2 : Eat what you can digest
Again we have heard this time and again. Eating more than what is required by the body is only going to stress out the vital organs and lead to complexities including life style related diseases. Similarly, if not managed properly, the debts can lead to financial difficulties and can even lead to a situation where one goes bankrupt. One needs to pick up the loan and credit that can be repaid easily. One must not take loans for fulfilling desires that are beyond the means. This is the second most important tip to manage your credit well.
Remember, default on loans can lead to rupturing your credit profile and can force you to look for ways to improve CIBIL score.
Credit cards are too good not to be used. It gives one the flexibility to buy now and pay later. Not on this, the transactions also get rewarded in the form of points that one can redeem, frequent flyer rewards, free bees etc. And to top it all, one is also able to make that little extra interest by keeping money in an account for 30-45 days rather paying upfront.
While all this is good, one needs to understand that credit card is actually the biggest culprit to be pushing one into high credit exposure and or a debt trap.
Avoid using a card to the maximum limit and do not use beyond the amount that cannot be paid in full at the end of the billing cycle.
Keeping a tab on what is happening on your credit front is of high importance and the assumption is that one would review the liabilities frequently. However, keeping a Hawk's eye implies that one would need to keep the statements under scrutiny.
There have been innumerable instances of getting a wrong charge levied on your credit card or a wrong account getting mapped to the credit bureau report. One must tread caution against these hazards and review not only the credit card statements but also the CIBIL report frequently.
If you are not aware, please be advised that you can now obtain your free CIBIL score once every year from the bureau. So you must take advantage of the directive of providing the free report and check if all accounts are correctly mapped and status correctly updated.