Don't sweat it. Easy hacks to get a healthy CIBIL score

There are no quick fixes to become credit healthy overnight and there is no magic wand that will make all your credit score woes go away. However we do have a few suggestions that can help you in being credit healthy without break into a sweat or racking your brains. You could use one or more of these suggestions simultaneously to work towards getting a good CIBIL Score.

Check the credit limit: Your credit card limit is Rs. 100,000 and you run a bill of average Rs. 70,000 per month but you manage to pay it all on time so there is no problem; right? Wrong!

Credit utilization ratio is a ratio between the total available credit limit available to a person and what he/she utilizes per month. A high credit card ratio even if you are able to pay it on time is not good for the CIBIL score as it is an indicator of credit hungry behavior. There are two ways of dealing with this; the first obviously is to lower the credit card spending and the second could be to get a bigger credit limit. One can get in touch with the existing card issuer and get the credit card limit enhanced; this is possible if the card holder is eligible for a bigger credit limit. If this is not possible then one could explore the option of getting another card issued, this will increase the overall credit limit available and the user can spread his/her expenditure across both cards.

Remove the irritants from the CIR: Sometimes there are some old issues that we seem to have forgotten but unfortunately (for us) Credit Information Report (CIR) continues to remember it and carries it forward. These could be an issue like an old credit card due which was not paid and has since then grown bigger due to fines and charges being levied over and over again. Also there could be an open loan which has been paid in full but an NOC has not been taken. Sorting out any such issue may take time and requires patience but removal of any such irritant is bound to have an immediate positive impact on the CIBIL score.

Check for mistakes: There are times when the cause of a low CIBIL score may not be your own mistake but a mistake by some other agency. This can be detected only if one scrutinizes their credit report carefully. Just point out the mistake to the credit bureau and they will do the needful and get in touch with the required agency to remove the error from the CIR. There is simple mechanism available both online and offline for removal of any mistakes from a person’s CIR.

Avoid making unnecessary loan enquiries: This is not something that you should do but something that you should not do! Do not make any loan enquiries till you are sure that you require a loan and till you are fairly certain that you meet the required terms and eligibility criteria laid down by the lender. When any loan application is made, the prospective lender seeks the applicant’s CIBIL Report; this is known as a hard enquiry and impacts the CIBIL score negatively. A loan rejection means that one has to apply for a loan again which will generate another hard enquiry. Finding out about a bank’s policies for loan sanction is not difficult, if you really need a loan then apply to a bank where you are likely to get the loan sanctioned. Not being credit hungry is good for credit health!

Nothing beats paying on time: This is the simplest yet the best and almost the most important aspect to be credit healthy. This cannot be a onetime effort but it has to be a habit; being disciplined in payments goes a long way in keeping the score in the green. A delay is generally due to being forgetful or lacking discipline so set up reminders, put in auto debit mandate, use post its or whatever it takes but do not delay payments.

So hopefully this Labor Day you can get a good credit score or you can at least strive towards one by following one of the above simple yet effective ways.

Author :- http://www.moneycontrol.com/
Reposted By :- http://credit4loan.com/

Applying for a job in SBI? Check your credit score with Cibil first

Hyderabad: If you want to apply for a job in State Bank of India (SBI), any default on loans or credit card payment will render your ineligible.
SBI, which is in the process of recruiting junior associates (customer support and sales) and junior agricultural associates in clerical cadre, has stipulated that candidates with poor credit record will not be eligible for jobs at the lender.
According to an advertisement released recently by the public sector lender, candidates against whom there is an adverse report regarding character and antecedents and moral turpitude are also not eligible to apply for the posts.
SBI has advised aspirants to check their credit history with the Credit Information Bureau Ltd (Cibil) before applying for posts in the bank. Cibil collects and maintains records of an individual’s payments pertaining to loans and credit cards.
“Candidates with record of default in repayment of loans/credit card dues and/or against whose name adverse report of Cibil or other external agencies are available are not eligible to apply for the post,” SBI said.
The move prompted some bank employee unions to request the bank to exempt students who have availed education loans from such rules.
The development comes against the backdrop of lenders, including SBI, facing flack for mounting bad loans, including the one related to United Breweries Group chairman Vijay Mallya’s Kingfisher Airline to which the SBI-led consortium extended loans amounting to Rs.9,000 crore.
“While we are well aware of, and fully appreciate, the concern for the alarming proportion of NPA (non-performing asset) severely affecting the financial health of banks, we think there would be a good number of candidates who have availed themselves of education loan from SBI or from any other bank for acquiring requisite qualification/s necessary to become eligible to get hired by potential employers, including banks,” the Bank Employees’ Federation of India (BEFI) said in statement.
“Such borrowers (those availing education loan) should not be equated and considered at par with wilful defaulters in the strict commercial sense of the term. It is very natural that this group of borrowers can start repaying their debts only when gainfully employed,” it added.
“Closing the doors of employment to them would not only put them to hardship but would also adversely affect the prospects of recovering the debts by the concerned lending institutions,” it said.
BEFI requested SBI to look into the matter and tell the authorities concerned to add an appropriate rider to ensure applicants who have availed education loan are not pushed out of the range of consideration for recruitment in SBI or in any other government lender.


Author :- http://www.livemint.com/
Reposted :- http://credit4loan.com/

Home loan delinquencies more than halve in last 5 years: Cibil

MUMBAI: The largest credit information company Cibil has said the proportion of bad loans in the housing segment has more than halved in the past five years.

The percentage of non-performing assets (NPAs) from the home loans segment has dropped to 0.57 in March 2015 compared to 1.06 at the end of 2010, it said in a report.
The company attributed the lower delinquencies to availability of timely credit information for lending.

It can be noted that all the lenders check the previous history of potential borrowers with a credit information company like Cibil before taking a call on the loan proposal. The past history also helps the lenders in pricing the product.



The Cibil report said Mumbai and Pune account for most such enquiries from banks for availing the details of potential borrowers, which is followed by Delhi and Bengaluru.

It said 3.9 lakh new home loan accounts were opened in the January-March quarter of this year.

It can be noted that in the face of slowing demand from the corporate segment, all banks have been focusing strongly on the retail segment, and within that the high value home loans have been a favourite.

Even though a longer tenure loan can result in potential asset liability mismatches, banks are interested in this stream as the segment is considered very safe because of the low probability of NPA.

On credit cards, which constitute a part of unsecured lending, the Cibil report said there was a growth in new accounts to 10.8 lakh for the January-March period, as against 8 lakh in the year-ago period.

On the asset quality in this segment, Cibil said there has been an improvement to 1.06 per cent as of March 2015 as against 3.27 per cent at the end of 2010.

The financial capital leads in the credit card applications as well, followed by Delhi and Bengaluru, it said.

Author :- http://economictimes.indiatimes.com/

Reposted By :- http://credit4loan.com

Applying for job in SBI? Check you credit historyApplying for job in SBI? Check you credit history

If you want to apply for a job at State Bank of India (SBI), any default on loans or credit card payment will render your ineligible.
SBI, which is in the process of recruiting Junior Associates (Customer Support & Sales) and Junior Agricultural Associates in clerical cadre, has stipulated that candidates with poor credit record will not be eligible for jobs at the country’s largest lender.
According to an advertisement released recently by the public sector lender, candidates against whom there is or are adverse report regarding character and antecedents, moral turpitude are also not eligible to apply for the post.
SBI has advised aspirants to check their credit history with CIBIL before applying for posts in the bank.
Credit Information Bureau Ltd (CIBIL) collects and maintains records of an individual’s payments pertaining to loans and credit cards.
“Candidates with record of default in repayment of loans/ credit card dues and/or against whose name adverse report of CIBIL or other external agencies are available are not eligible to apply for the post,” SBI said.
The move prompted some bank employee unions to request the banks to exempt students who have availed education loans from such rules.
The development comes against the backdrop of lenders, including SBI, facing flack for mounting bad loans, including the one related to Vijay Mallya’s Kingfisher Airline to which the SBI-led consortium extended loans now amounting to Rs 9,000 crore.
“While we are well aware of, and fully appreciate, the concern for the alarming proportion of NPA severely affecting the financial health of Banks, we think there would be a good number of candidates who have availed themselves of education loan from SBI or from any other Bank for acquiring requisite qualification/s necessary to become eligible to get hired by potential employers, including banks,” Bank Employees Federation of India (BEFI) said in statement.
“Such borrowers (those availing education loan) should not be equated and considered at par with “wilful defaulters” in the strict commercial sense of the term. It is very natural that this group of borrowers can start repaying their debts only when gainfully employed,” it added.
“Closing the doors of employment to them would not only put them to hardship but would also adversely affect the prospects of recovering the debts by the concerned lending institutions,” it said.
BEFI requested the SBI to look into the matter and advice the authorities concerned to add an appropriate rider to ensure the applicants who have availed education loan are not pushed out of the range of consideration for recruitment in SBI or in any other Government lender.
Author :-  http://www.dnaindia.com/
Reposted By :- http://credit4loan.com/

Try credit info firms for data on defaulters: RBI to RTI query

The Reserve Bank of India (RBI) seems to be confused about how to respond to queries related to the disclosure of wilful defaulters.

While the regulator had earlier dismissed a query filed by BusinessLine under the Right to Information Act, 2005 saying it did not have the resources to compile the list of defaulters, a second reply from another desk in the RBI has passed the buck on to credit information companies such as Credit Information Bureau (India) Ltd (CIBIL).

“Banks and financial institutions have been advised to submit the data regarding wilful defaulters and defaulters to Credit Information Companies and not to the RBI from December 2014 onwards. Therefore, we do not have the information,” the RBI said, in response to an RTI filed by BusinessLine.

In an earlier reply, dated April 7, the regulator had said: “Compilation of the same (list of wilful defaulters) would disproportionately divert resources.”

This comes even as pressure builds on the central bank to put in place a system that would name and shame wilful defaulters. The Supreme Court had recently said that it was in favour of making public the list of defaulters. The apex court has observed that “the RBI is supposed to uphold public interest and not the interest of individual banks”, nor is the central bank in “any fiduciary relationship with any bank”.

However, the central bank has so far refused to make the names public on the ground that it would affect companies’ health if they are in genuine difficulty and “may accentuate the failure of the business rather than nursing it back to health”.

Various bank associations and unions are demanding a more pro-active response by the RBI. “If publication of the names of defaulters would defame them or result in loss of business, why is no such consideration being shown for the common man who avails a bank loan? …when it comes to industrialists, all soft options are being advocated,” said a statement from the All India Bank Employees’ Association.

More than 5,600 defaulters:

According to one estimate, there are more than 5,600 wilful defaulters, who together owe more than ₹60,000 crore to banks.

Indian National Bank Employees’ Federation General Secretary Subhash Sawant said the RBI’s argument that it cannot allot resources to draw up a list of defaulters does not hold much water because banks have been computerising their operations for the past 15 years. All the information is available at the click of a button.

Author :- http://www.thehindubusinessline.com/

Reposted By :- http://credit4loan.com/

When netas are wilful defaulters, they cut across all party lines

If the Kingfisher Airlines loan default case unravels the alleged nexus between bankers and businessmen, a close look into the list of wilful defaulters disclosed by Credit Information Bureau (India) Limited (CIBIL) and banks spells out names of at least five politicians, across the political spectrum, who are directors in companies that owe around Rs 900 crore to Indian banks.
The Indian Express looked into cases where the default amount is in excess of Rs 50 crore for one individual.

A detailed questionnaire sent to the five individuals or their companies, seeking their responses over the defaults, went unanswered.
In terms of the loan default amount, Jivraj Surani of JB Diamonds tops the list. The former Gujarat BJP vice-president who was a close aide of former Gujarat CM Keshubhai Patel owes Rs 466 crore to three banks as per the CIBIL report.
In 2007 Gujarat state elections, Surani campaigned for Gujarat Parivartan Party headed by Patel and later joined the Congress.
Next on the list is Shibaji Panja who set up RP Infosystems in partnership with Kaustuv Ray. Reported to be an aide of West Bengal CM Mamata Banerjee (who in the past has denied any association with him), Panja was also a member of the task force attached to the state’s department of information and culture and a member of the tele-academy set up by the chief minister. Panja has been announced a wilful defaulter by five banks for loan default aggregating to over Rs 180 crore.

In February 2015, Panja was arrested for allegedly fraud related to a Delhi-based company amounting to around Rs 18 crore. Earlier, the economic offences wing of Delhi Police had issued a lookout notice in that regard. The arrest followed a complaint by an official of Delhi based IFCI Factors, an IFCI group company, where it alleged that Panja, who was the managing director of RP Infosystems, had taken a loan of Rs 10 crore against a bill pending payment in 2010.

Another politician on the list is Kadir Rana who was elected to the Lok Sabha from Muzaffarnagar seat in 2009 as a Bahujan Samajwadi Party candidate. Kadir Rana’s name appears on the list of wilful defaulters for loan default of over Rs 90 crore by two of his companies — Rana Udyog and Rana Global. Along with these two companies, Rana Alloys and Haridwar Iron and Ispat Rolling owned by his close relatives have also defaulted on loans amounting to around Rs 135 crore. In 2014 Kadir Rana, along with several others including his relative Noor Saleem Rana, were chargesheeted by the SIT for Muzaffarnagar riots. Noor Saleem Rana is also a director on one of the Rana Group companies. The list also includes the name of Jasbir Singh Khangura or Jassi Khangura, a hotelier and former Congress MLA from Halqa Qila Raipur constituency in Punjab (2007-2012), for having defaulted on a loan of Rs 70 crore taken by his firm Macro Dairy Ventures which sells products under the brand TruMilk. He contested from Dakha constituency of the state in 2012 but failed to get re-elected. Khangura came from UK to India in 1990s and set up Hotel Park Plaza in Ludhiana. He is married to Raman who is granddaughter of former Punjab CM Partap Singh Kairon. Another politician whose name figures in the list is Ashok Kumar Bajpai, a former Congress party member who later joined BSP in 2007 and then joined Janata Dal (United). Bajpai’s name has been listed alongside the loan default of Rs 63 crore by Parerhat Gas. Bajpai’s mother, Rajendra Kumari Bajpai, was also a Congree leader and she served as minister of labour and social welfare, was a close confidant of Indira Gandhi. Rajendra Kumari has also been the Lieutenant Governor of Pondicherry.

Author :- http://indianexpress.com/
Reposted By :- http://credit4loan.com/

Directors of over 1,000 listed companies have links to wilful defaulters

Mumbai:
At least 1,219 directors on the boards of listed companies have links with companies that are so-called wilful defaulters.
Why is this number significant?
Last month, capital markets regulator Securities and Exchange Board of India (Sebi) said that it was looking to place capital-raising restrictions on companies with links to wilful defaulters. “No issuer shall make a public issue (of securities) if the issuer company or its promoter or its director is in the list of the wilful defaulters,” said the market regulator’s press note released on 12 March.
A wilful defaulter is a company or individual that does not plan to repay a loan, diverts funds to a purpose different than the one for which it was borrowed , or sells the asset acquired with the borrowed capital without the lender’s knowledge.
As of June 2015, the latest period for which data has been collated by Prime Database, at least 1,219 directors who served on the boards of companies which were declared wilful defaulters also serve on the boards of other listed companies.
That number is likely to have increased.
The number of wilful defaulters rose to 7,129 as of December 2015, from 6,458 in June that year, according to information available with Credit Information Bureau of India Ltd (Cibil). Prime Database’s numbers include only those firms tracked by Cibil. Three other repositories also hold defaulter information: Experian Credit Information Co. of India Pvt. Ltd, Equifax Credit Information Services Pvt. Ltd and High Mark Credit Information Services Pvt. Ltd. There are 1,000 entities in the other three, including overlaps.
There is a debate if all directors should be painted with the same brush.
A January 2015 Sebi discussion paper said that “even though independent directors/nominee directors are distinguished from other promoter directors of companies that are wilful defaulters, such directors are brought within the purview of the Master Circular for the purpose of declaring them as wilful defaulters”.
The same paper, however, also noted the Gujarat high court’s observation that extending this to all directors is not appropriate. Experts point out that lenders and private equity investors also have board representatives in the form of nominee directors. If these entities have advanced capital to a company, they may have taken a board seat. But they would have had limited control if the company decided to default.
Final Sebi regulations are awaited in this regard.
In case companies want to completely dissociate themselves from anyone who has been a director on the board of a company that is a wilful defaulter company, over 1,000 listed firms will need new directors.
As it is, there is a shortage of directors after recently introduced rules limited the number of multiple directorships a person can hold. Individuals can serve on the boards of only seven listed companies at the same time. These tighter rules were announced in February 2014. Whole-time directors cannot be on the boards of more than three listed companies. And independent directors can only serve two consecutive five-year terms.
“There is a demand for good directors, irrespective of the impact these guidelines have on demand,” said Amit Tandon, founder and managing director of proxy advisory firm Institutional Investor Advisory Services India Ltd (IiAS).
It’s not just directors who will be affected if Sebi decides to crack down.
The regulator has also said that no fresh registration will be granted to intermediaries who are in the list of wilful defaulters. Tejesh Chitlangi, partner at IC Legal, said that Sebi will have to be cautious in implementing the restrictions since an absolute prohibition on registering any entity having a promoter or key person tagged as a wilful defaulter may inadvertently impact those that have limited control over the company’s actions.
“This can substantially impact their future operations and hence should be dealt by Sebi on a case-to-case basis rather than creating absolute prohibition,” said Chitlangi.
The jury may be out on whether everybody deserves the same treatment, but a hard look at company boards may be overdue.

Author :- http://www.livemint.com/
Reposted By :- http://credit4loan.com/

Vijay Mallya effect? Directors at over 1k listed cos linked to wilful defaulters

Mumbai: A month after capital markets regulator Securities and Exchange Board of India (SEBI) hinted at imposing capital-raising restrictions on companies declared wilful defaulters, fresh set of data collated by Prime Database has revealed that at least 1,219 Directors who serve on boards of listed companies also serve in the same capacity at companies which have been declared as such.
The number of Directors cited by Prime Database corresponds to the information available with Credit Information Bureau of India Ltd (CIBIL).

“No issuer shall make a public issue (of securities) if the issuer company or its promoter or its director is in the list of the wilful defaulters,” SEBI said in a press note dated March 12.

The numbers cited by Prime Database are based on data as of June 2015.
According to CIBIL, the number of wilful defaulters in India has risen from 6,458 in June 2015 to 7,129 as of December 2015. Among these, Maharashtra has the maximum number of defaulting entities at 1,366 (Rs 25,689 crore), followed by Delhi at 627 (Rs 8,654 crore), West Bengal at 1,059 (Rs 6,426 crore) and Tamil Nadu at 447 (Rs 5,213 crore).              
Data with CIBIL further show that a total of 1,027 firms have directors with links to defaulting companies on their boards. The finance sector leads the pack of 1,027 firms which have such directors on board with 158 companies, followed by textile (81), trading (65), IT (58) and steel (56) among the top five.
The actual number of Directors at listed companies also serving on Boards of companies listed as wilful defaulters may be higher than what has been cited above, said a report in Mint. This is because it does not track It does not factor in the information available with three other repositories that also hold defaulter information. These include Experian Credit Information Co. of India Pvt. Ltd, Equifax Credit Information Services Pvt. Ltd and High Mark Credit Information Services Pvt. Ltd., it said.
The information comes at a time when banks have been hit hard by an increasing number of bad loans weighing heavy on their balance sheets. The case of industrialist Vijay Mallya, who is in thick soup over loans of Rs 7,600 crore it owes to a consortium of banks, has been the latest in the series of recoveries gone woefully bad.
A wilful defaulter is a company or individual that does not plan to repay a loan, diverts funds to a purpose different than the one for which it was borrowed , or sells the asset acquired with the borrowed capital without the lender’s knowledge.
While action against erring companies has been well-received, there is a debate if all Directors should be painted with the same brush.
“Even though independent directors/nominee directors are distinguished from other promoter directors of companies that are wilful defaulters, such directors are brought within the purview of the Master Circular for the purpose of declaring them as wilful defaulters,” said a January 2015 discussion paper  floated by SEBI. The same discussion paper also noted the observations of the Gujarat High Court that found extending this to all directors as not appropriate.
In the current situation, if companies choose to completely distance themselves from anyone who has been a director on the board of a company declared a wilful defaulter, over 1,000 listed firms will need new directors.


Author :-http://www.indiatvnews.com/
Reposted By :- http://credit4loan.com/

Here’s how you can get a good CIBIL score at young age

A good CIBIL score is not an option in the day and age that we live in today. If you have just started working or paying your own bills, soon you would think of buying a house, car and taking credit for the same. A good CIBIL score of 750 and above will open up doors for you and you will be able to receive a loan at competitive rates of interest.

However, anecdotal evidence suggests people in their 20s are most likely to fumble on credit, because they do not have adequate information about what impacts their CIBIL score. Thus, as soon as they lay their hands on credit, the damage is already been done.

In case you do not falter with your CIBIL score, here are some pointers that will help you build a good credit profile, which will help you get a good CIBIL score right from the start.

Understand what impacts your CIBIL score
You need to understand how CIBIL score works and what impacts your CIBIL score. There are a lot of factors that impact your CIBIL score in various measures. From payment history, credit utilization, age of credit, debt mix to number of inquiries, a mix of all these factors affect your CIBIL score.

READ ALSO: 6 things about CIBIL every young adult should know

Choose your first credit card wisely
Now that you have understood what impacts your CIBIL score, you must be eager to build a good CIBIL score yourself. Unlike popular perception, credit cards are not evil and can prove to be an important tool for credit building, only if used well.

You should check not just the rate of interest that the card is charging you, you should also look out for factors such as fee, reward points and the likes and get a card that is best suited to your profile.

For instance, if you intend to use your credit card for purchasing fuel, get a card that has the highest fuel surcharge. Also, do not fall for teaser offers such as waiver of annual fees in the first year that card issuers try to entice you with. There are cards that have no annual fee at all, but come with a lower credit limit. When you are starting out, such a card may be ideal for you. Once you take your credit card, it is important to use it well, so make it a habit to spend small amounts on your card and pay your outstanding amounts in full each time before the end of your billing cycle.

Clear your education loan
The cardinal mistake most young people make is that they immediately switch over to a life of luxury as soon as they get their first job and become slack about the repayment of their student loans. If you have a student loan, make it a priority to clear your outstanding loan as soon as you can. Live the frugal life that you did as a student and try and prepay the education loan that you had availed of. Not only will you have the pleasure of being debt free, it will be a great way to build your credit profile as well.

Inculcate good financial habits
This is a no brainer, but the crux of building good credit and maintaining a good CIBIL score. Just like you have to eat healthy and exercise in order to build your physical health, similarly, you must maintain good financial habits with regards to your credit such as timely repayments of all your credit, especially your credit card, keeping your credit utilization low and maintaining a good mix of credit.

Finally, and most importantly, keep a strict vigil on your CIBIL score and CIBIL report and make it a habit to check your CIBIL score periodically.

Just inculcating good financial habits will ensure that your CIBIL score remains high not just as you begin your life independently, but through the rest of your life.

Author:-http://www.businessinsider.in/
Reposted By:- http://credit4loan.com/

Lending institutions prefer clients with credit score of 800 and above

The launch of India's first credit score for individuals, the Cibil TransUnion Score, last week was a landmark event in the country's credit evolution. While the score has been used by loan providers for almost three years, the Credit Information Bureau (India), in an attempt to improve transparency in the use of information during loan evaluations, now provides the score to individuals as well.

CIBIL TransUnion Score

An individual's Cibil TransUnion Score provides loan provider with an indication of the "probability of default" of the individual based on their credit history. What this means is that the score tells a credit institution how likely is that an individual will pay back a loan (should the credit institution choose to sanction the loan) based on the individual's past pattern of credit usage and loan repayment behaviour.

Given that the Cibil TransUnion Score is a loan-evaluation tool developed to help loan providers, the first logical question that comes to mind is: 'What difference does it make to me'?

The answer is that the higher your Cibil TransUnion Score (ie, the closer it is to 900), the more likely you are to get your loan application approved.

The reason being that a score closer to 900 provides the loan provider more confidence that the individual would be in a good position to repay th ..

What does the data say?

The best way to analyse the impact the Cibil TransUnion Score has on an individual's loan application is to observe the lending behaviour demonstrated by credit institutions over time. The table gives data of loan sanctioned by loan providers based on an individual's Cibil TransUnion Score in 2008 and 2010.

The data tells us that 90% of new loans sanctioned in both 2008 and 2011 were to individuals who had a Cibil TransUnion Score of 700 or more.

However, the data also indicates that over three years, lending institutions preference has shifted from individuals with a Cibil TransUnion Score ranging between 750 and 799 in 2008 to individuals with a credit score of 800 and above in 2011.

Hence, you will have to maintain greater financial discipline to secure credit in future.

It is important to note that loan providers also consider your total income, overall debt burden and how you fit into their internal credit policy before deciding upon your loan application. Hence, if your EMI to income ratio is over the set cut-off percentage, your loan application may get rejected despite having a credit score of 847.

Simply put, the Cibil TransUnion Score is like the marks one earns in school examinations. Higher marks (credit score) increase the chances of your being accepted in a college (getting a loan approved), but they don't guarantee your admission. A more overall evaluation of your extracurricular activities (income level, overall debt burden) is required before you are granted admission.

Similarly, different colleges will have different cut-offs with regards to the marks (credit score) required to gain admission.

Author :- http://economictimes.indiatimes.com/

Reposted By :- http://credit4loan.com

Don't let CIBIL score stand between you and your dream job

Next time you appear for a job interview, be prepared to answer questions not only related to your area of expertise but also your credit history. Does this sound surprising to you? For some it may come as a surprise, while some may get the feeling of 'been there done that'.

Either ways it is important to understand that the CIBIL score (or rating by any other agency) is increasingly being used to screen prospective employees.

Why Do Employers Want to Check CIBIL Score

When companies hire new employees, they want somebody who has integrity so that the person can be trusted; they want a person who is well organized and a person who is focused on the job.

Any organization will obviously try to avoid employing somebody who has a criminal background, is debt ridden or simply isn't trustworthy.

One common practice by organizations is to get feedback from old employers about a candidate's performance; this helps them in assessing and screening a candidate by getting the opinion from peers or seniors with whom he has worked in the past. A credit report is a summary of a person's credit history; it also offers valuable insight into the financial health and also to an extent gives a peep into some personality traits of a candidate.

A prospective employee who is debt ridden or is defaulting on his payments spells trouble. This not only means that he could prove to be potential liability to the company in case of litigation but also indicates that he might not be able to focus on his work due to impeding or ongoing financial crisis. The company may have to cut a sorry face in front of its clients and vendors in case the knowledge of his/her default are made public.

A company may find it hard to trust such a person as his/her integrity is doubtful. Non-payment of dues or settling with debtors can be an indication of just bad intention and unwillingness to pay what is owed by him/her. An organization will shy from hiring such a person especially in positions of higher management, financial/banking sector or where the employee has to deal with customer funds or sensitive data. Such positions require people who demonstrate unquestionable honesty as they are dealing with sensitive information and other people's funds.

A low CIBIL score also indicates that a person is sloppy with his finances, is disorganized and lacks planning and organization skills. Why would somebody want to hire somebody who cannot manage their own finances?

What Should You Do Before an Interview?

Maintaining a CIBIL score is a long term process and there is no quick fix. CIBIL score can be accessed by the individual or lenders, companies cannot access it. Thus an organization will have to ask the interviewee to submit his/her credit score.

So before appearing for the interview have a look at your credit report and if possible a few weeks in advance of appearing for the interview. Make sure that all your current dues are paid and at least for the current month there are no delays. In case there is some error by an agency, get it rectified. Though getting an error removed is not difficult but it may take some time, so if you check your CIBIL score well ahead of the D day you will have sufficient time to get the mistake removed.

In case there is no time to do so, you can explain to the interviewer about the mistake and if you have a reasonable explain they will be willing to accept what you have to say. Again if in the past you defaulted on a payment or there is some other reason that has pulled the score down and you have logical explanation (job loss, illness, error, fraud) those interviewing will not hold it against you. The key here is to be prepared and have a plausible but honest explanation.

So here is another reason to be credit healthy; getting the job you deserve and desire. Like stated above there might not be sufficient time to improve your score, so it is better to prepared at all times. Check your CIBIL report from time to time and take action as and when required. It would be sad if were to lose an opportunity despite having the right qualifications just because you were not careful about your CIBIL score.



Author :- http://www.businessinsider.in/
Reposted By :- http://credit4loan.com/

4 Factors That Affect Your Credit Score

A credit score is your credibility quotientthat a creditor or banks will check before approving your loan application. A CIBIL scoreis a three digit representation factor evaluated using factors that can prove your debt repayment worthiness. The highest score you can max in a CIBIL report is 900. Higher the value, greater is our credit worthiness.
If you have a poor rating, here are 4 factors that will help you increase credit score.
Clear your outstanding against your accounts
Make payments on time and clear outstanding dues ASAP
Major percentage of your CIBIL score calculation depends on how responsible you are at making on-time payments. Missing a payment only a couple of times in a quarter can slide your credit rating significantly.
If you have a poor rating, start your CIBIL score calculations using the report available online. Collections against your name arise due to non payment of debts to the collection agency or to the bank. If there is a dispute with the lender, raise it online using CIBIL Consumer Login.
You will be able to see the names of lenders who are awaiting your debt repayment.
Use Card responsibly
Don’t max out your threshold for any card
Whether you have one card or many, crossing the limit will bring your credit score down. Increase your credit score by utilizing the cards responsibly. Use them only in case of emergency or cash deficit in your regular account. Never use your card facility to repay another debt. It will reflect in your CIBIL credit report negatively.
In case you are unable to see your credit credibility, use CIBIL consumer login to verify open card utilisation rate. Higher the card utilization rate, higher will be your chances to improve CIBIL credit score.
How to find Open credit card Utilisation rate?
Divide your existing total balance in cards by the number of total open credit card limits. The percentile factor is your Utilisation rate.
CIBIL disputes related to credit card may take more than three months to get reported. To reach maximum score, maintain a good credit card utilisation rate by paying off balances in other cards. This is a good way to negate the difference arising from the disputed card limit.
Perform a CIBIL score calculation every month instead of doing it quarterly,especially if you have more than one credit card from different agencies.
Reduce instances of Hard Credit enquiries
More enquiries cut down your credit credibility
Many financial advisors acknowledge the significance of the total number of hard credit enquiries. Use CIBIL consumer login to identify total number of hard credit enquiries made into your credit report. An enquiry is an event when a bank, loan provider or a credit card issuer checks into the credit history before approving an application.
Following cases will lead to chance occurrence of credit card enquiries.
Loans: Auto, Education, Business, Personal
Credit card
Mortgage
To increase credit score adequately, avoid applying multiple lines of credit at the same time. It shows poor credit credibility in the recent run.
History of credit
Account opening date and mode of last activity
Checking your credit report will reveal a lot more information about credit trends from your account. It shows how long you have been nursing an account and how it is used. Longer the credit history, easier it is to resolve the CIBILdispute arising due to one off instance of loan repayment default.
To improve score, maintain your oldest accounts and nurse them respectfully rather than opening a new account. Also, avoid shutting down your credit card even if it is proving hard to maintain.
CIBIL score calculation is done by tentatively breaking down your payment history, your account activity, existing and new credits and your response towards debt repayment.
written by Arun Ramamurthy, author of “Unlock the Power of Your Credit Score” : India’s first book on credit scores


Author :- http://www.siliconindia.com/
Reposted By :- http://credit4loan.com/

NCDRC raps StanChart for spoiling customer's credit record

The National Consumer Commission upheld the decision of the State Commission asking Standard Chartered Bank to pay a compensation of Rs2 lakh for negligence and reporting the customer as a defaulter to CIBIL

 

The National Consumer Disputes Redressal Commission (NCDRC), while holding Standard Chartered Bank (StanChart) guilty for spoiling one of its customers’ credit record, asked the lender to pay Rs2 lakh as compensation. 

 

"It is not disputed that the complainant made full payment of transactions carried out through credit card and opposite party (OP-StanChart) issued full and final settlement account on 25 October 2002. It is also not disputed that OP by mistake/ negligence has shown name of complainant in Credit Information Bureau (India) Ltd (CIBIL) defaults on account of which, complainant’s application for education loan of Rs4 lakh from State Bank of India was rejected," said Justice KS Chaudhari, presiding member in the order.

 

The case related with Vadodara-based Hanumesh Bandurao Kulkarni, who despite paying all his dues while closing a credit card with StanChart, was shown as defaulter in CIBIL report. This defaulter remark prohibited him from obtaining a loan of Rs4 lakh for his daughter's education. 

 

On 5 September 2001, StanChart issued a credit card to Kulkarni, who used it only twice for withdrawing Rs4,000 and Rs3,100 on 15 September 2001. Kulkarni paid Rs500 on 17 February 2002 and Rs2000 on 15 April 2002 against the withdrawals. Citing defective services from the lender, Kulkarni then decided to close the credit card.

 

On 2 October 2002, he paid Rs7,000 to StanChart against full and final settlement for his credit card. StanChart, on 25 October 2002 issued a full and final settlement account statement and closed Kulkarni's credit card from that date. 

 

Later in 2013 or after 11 years from closing the StanChart credit card, Kulkarni applied with SBI for an education loan of Rs4 lakh for is daughter's higher studies. However, SBI rejected his application on 31 July 2013 with a remark "CIBIL defaults, file rejected'. 

 

On enquiry, Kulkarni found that StanChart has mentioned his name as 'defaulter' in the records of CIBIL. The amount mentioned in the credit report was Rs2.95 lakh as on 1 August 2013, which increased by around Rs20,000 to Rs3.15 lakh on 14 November 2013.

 

Kulkarni wrote several letters to StanChart for rectification of the error but the Bank did not take any care. He then approached the Banking Ombudsman at Ahmedabad. While admitting the facts, StanChart on 23 December 2013 assured the Ombudsman that it will remove Kulkarni's name from the CIBIL records within 10 days. However, the Bank failed to do so. It also failed to issue no dues certificate to Kulkarni, as agreed before the Ombudsman.

 

Kulkarni, citing service deficiency on the part of StanChart, then filed complaint before the District Consumer Forum. The Bank did not appear before the Forum. The Forum then issued an ex-parte order asking StanChart to remove Kulkarni's name as defaulter from CIBIL records, issue a no dues certificate and pay a compensation of Rs1 lakh. It also asked StanChart to pay Rs50,000 in the State Consumer Welfare Fund.

 

Not satisfied with the compensation, Kulkarni then approached the State Commission. While partly allowing the petition, the Gujarat State Consumer Disputes Redressal Commission, enhanced the compensation to Rs2 lakh. This led Kulkarni to approach the NCDRC.

 

In his petition, Kulkarni contended that since his loan proposal was rejected, he was forced to obtain a loan of Rs70,000 from other financial institutions at an in interest of 23% per annum, by pledging gold ornaments worth Rs2 lakh. 

 

"Even if it is taken a true fact, (the) complainant (Kulkarni) was paying Rs700 per month higher to the financial institution against the interest payable to SBI at a rate of 11% to 12%p.a. Complainant has already been awarded compensation of Rs2 lakh by which he can very well pay full loan of Rs70,000 obtained from financial institution and still he would be saving Rs1.30 lakh," the NCDRC said in its order

Author :- http://www.moneylife.in/Reposted by :- http://credit4loan.com/

All that you should know about your CIBIL score

Often, while applying for a loan, we are clueless about what our credit history is all about. The typical jargons used for credit score such as CIBIL report and CIBIL TransUnion Score unnerve us and we often end up feeling confused by the end of the loan application. But hey, don't worry! Harshala Chandorkar, senior vice president, Consumer Services and Communications, CIBIL told BI India some of the common myths about credit score.

CIBIL decides the cut-off score for credit institutions

CIBIL does not recommend any cut-off score to banks to help them arrive at any lending decisions. Each bank has a different risk appetite and they decide what the cut off score should be for their bank. What may be a good credit score for Bank A may or may not be a good credit score for Bank B.

In addition to a good credit score credit institutions may also consider other critical factors like your income to debt ratio, your residential status, professional qualifications etc. while deciding on your loan application. Therefore along with a good credit score you must also ensure that all these factors are well placed before applying for the loan.

Banks and credit institutions can access an individual's CIBIL Report

Consumers can directly access their own CIBIL Report and CIBIL Transunion Score on CIBIL's website in 3 easy steps. A user will have to fill up an online form and make a payment through net banking, debit, credit or cash card. The final step would require online authentication based on the user's credit history.

If you are successfully authenticated, your CIBIL Report and CIBIL TransUnion Score will appear on the screen and you shall also receive it via e-mail. If you fail the authentication then you can upload a scanned copy of your identity proof and address proof on CIBIL's website. The report will then get delivered to you via express delivery.

A poor score will haunt me forever.

An individual with a low credit score can gradually work towards improving it. Credit report and credit scores are dynamic and change according to the credit behavior of the borrower. Once the borrower has paid all the unpaid EMIs and has again started regularly paying the installments on the loan, his credit report will improve and reflect the regular payments accordingly. The credit score may also improve gradually.


Author :- http://www.businessinsider.in/
Reposted By :- http://credit4loan.com/