How To Maintain A Crackling Credit Score This Diwali

The festival of lights is almost here and preparations are on in full swing. It’s that time of the year when you are allowed, or in fact supported, by your loved ones, to spoil yourself with all good things from clothes, to jewelry, to sweets…just about everything. So while you are basking in the festive mood, we don’t want to dampen your spirit. But being the righteous financial advisers that we are, we would like to, well, advice you! Diwali is celebrated to commemorate the victory of Lord Rama over his Arch-nemesis, Ravana. Likewise, we humans, with our limited competencies, should strive to overcome our financial evils. So here’s a list of simple things that would not just help you have a sparkling Diwali, but will also earn you a bomb of a credit score (or at least save you from ruining an existing one).

1. Give your card a break: Even as Diwali approaches, a number of special offers and schemes start flashing the market. These fancy advertisements combined with the festive fervor, beguile people into spending frantically. At such times, it requires a lot of effort to keep your credit card swipes under control and not give in to consumerism. As a rule, shop what you need rather than what is on offer, and remember to restrict your spending to at the most 50% of your credit card limit.

2. Plan your shopping in advance: Don’t wait to buy new clothes till the Diwali Diya is in your face. Begin shopping much in advance. This way, you get a lot of time in your hands to surf your options. Also, during festivals, the flight tickets touch the sky and you end up spending thrice the amount unless you are heedful enough to book your holidays months in advance. Planning saves you from spending all money at once and spread your spends across a few months. Buy big ticket items such as TV, Fridge, Laptop etc on EMIs instead on credit cards to give you some breather.

3. Stop forgetting due dates: It’s easy to forget the due dates when you have so many other distractions during Diwali. Have a calendar handy and also keep your partner or close ones informed about the same. In this way, you will be reminded of your dues and would be automatically prompted to spend mindfully. If you forget your dues frequently, it will show up in your Credit Score.

4. Protect your family’s future: Just like you would want to protect your kids from the fire crackers, you need to protect your family from the financial demons too. It is important to plan in advance so that you secure their future even when you are not around. The idea is to have a right mix of investments such as in FDs, PPF, PF, Mutual funds, SIPs, Equity or a real estate. Consult the right advisers to obtain a personalized plan for you.

All the above pointers will ensure your family has a great Diwali while you have a crackling credit score! So here’s wishing you a very happy Diwali from CRIF India. Have a sparkling one!

Planning To Buy A Car This Festive Season? Here’s a Checklist Before Signing That Car Loan!

Festive seasons in India come along with a lot of offers and deal on cars, adding more festivity to the season. Be it Diwali or Durga Puja, there will be discounts and offers galore on varied products and it is in your best interest to avail them before it’s gone.

The car is one of the most thoughtful purchases that one has to do. It not only is confusing amidst an enormous number of options but is also a little nerve wrecking when a loan has to be taken for the same. If you are planning to buy a car that you have wished for then we have a list of things that should be on your checklist before you hop on to a decision or before you apply for a car loan, making things uncomplicated.

Did you decide what car you would go for? The first thing is to plan what car you really want to buy and is also a practical option for you and your family. It is wise to decide a car that fits the needs and does not compromise with your dreams too. As a novice driver, you must not invest in a high-end car or for that matter a new one. Choose the car that matches the purpose.These are few parameters that will definitely help you decide the right car model that will suit your needs:

  • Firstly according to your needs to choose a car category, from a hatchback to a sedan to MUV to SUV, there are many options in the market.
  • Fuel-type – To choose which type of fuel the car will be consuming is important as eventually it will become a major part of your monthly expenses. Petrol, diesel or CNG, choose whichever suits your budget.
  • Thirdly, choose between manual and automatic cars according to your comfort.

Have you checked your credit score?
Credit score and history should first be in place before you start planning to apply for your car loan. The foremost step is to visit an RBI-approved credit bureau website like CRIF and check your credit-worthiness. A higher score means a better chance of loan approval and lower will be the interest rates. One will have a greater probability of approval of the loan if he/she has a score above 700.

Have you made a checklist of the documents?
The lenders often check your credibility and a list of documents before granting the loan. The list includes proof of identity, (such as PAN, Driving License Number, Aadhaar etc) your income proof (salary slips for last 3 months, Form 16 for last 2-3 years etc), credit and bank history (bank statements for past 6 months), proof of residence (electricity bill, driving license).

How much down payment can you afford? Now a day’s car dealers tie up with various banks and lenders, bringing in the possibility of 100% finance. Though it may sound very enticing once you start evaluating the options you will know that more the loan, higher the EMI. Make sure you have most of the amount ready as the down payment which eventually helps in the lower loan amount, thus a lower EMI.

What is the tenure of the loan? The repayment through EMI depends on the tenure of the loan. It is feasible to take a longer tenure loan (say for 5 years or more) if your income is on the lower side as it reduces the portion of the EMI as the loan amount is spread over a longer time and a shorter one (3-5 years) if you can afford it.

What are the loan rates? Car loan interest rates start at 8.7% per annum, depending on your car model, repayment capacity, employer, etc. At first check with your bank if they have any offers or any deal that gives lower interest rates. Secondly, visit all the online lending marketplaces and compare carefully all the deals to get the best one. Make sure a detailed inquiry is done by you before you finalise on a deal.

What kind of credit behaviour do you have? Do not make multiple inquiries in the same bank as it indicates that you have credit hungry behavior which eventually does affect your credibility and credit score. When you ask for a loan from a bank and get rejected for the same then you should not go back to the same lender again without fixing the glitches in your application profile.

Have you read the fine print? Lenders charge this fee to cover the cost incurred while evaluating your loan application. This is usually a non-refundable fee. In festive seasons and other offers, many lenders waive off their processing fees to attract business. Ensure that such lenders are not charging a higher interest rate or other charges to offset their loss from the reduction of processing fee.

Finally, did you take the test drive? When you choose to buy a new car or an old one never skip the luxury of getting a free test drive. It will help you take a decision which is often one of the biggest dreams that one fulfills with their hard earned money.

Your dream car is an emotional & financial investment and you would not want to take a hasty decision about it. Hoping that buying your new ride is easy now with all the information assimilated in this article. Out of all the steps, make sure to first check your credit score with CRIF before you apply for your car loan.

Checking My Credit Report Affects My Credit Score? Or Not?

We know how important a credit score is in our everyday lives especially in our ability to take loans. Did you know it is equally important to check your credit score at regular intervals? There are a number of reasons to do so – some of them are to keep a track on your credit standing and take necessary steps to improve or maintain the credit reports and credit score. While we all know that checking your credit score is important, one thing that bothers a lot of consumers is if checking their own credit report will hurt their credit scores. We are breaking down the entire process to give you a crystal-clear view.

What does ‘credit report check’ or credit score check mean?
A credit report check, also known as an inquiry for credit score is either done by you or by the potential lenders of loan or credit cards such as banks, NBFCs and other financial institutions. A bank checks your credit score usually when you apply for a loan or a credit card to know the creditworthiness of the applicant. Further, a bank can also check your credit history and credit score while you are a loan or card customer of the bank to monitor its portfolio of customers.

Credit Report Check shows or not Hard Inquiry Vs Soft Inquiry
A credit report check or a credit inquiry can be classified into a hard inquiry or soft inquiry. Hard inquiries occur when you apply or request for a new credit card or a new loan or a line of credit like increasing the credit limit on a card. Such inquiries leave a footprint on your credit history and show up on your credit reports. Too many hard inquiries over a short duration have a negative impact on your credit score, especially if the credit keeps getting denied.

Hence, it is advisable to limit your applications for credit card or loan. Make sure you’re only applying for credit only when it really is necessary. Select a credit card and a bank after doing research rather than blindly applying for credit with many banks. Want to know about the ways that can positively impact your Credit Score? Read our blog, “4 ways to Build a Great Credit Score.”

On the other hand, soft inquiries occur when an individual checks his own credit report and credit score. These are the type of inquiries that do not show on the reports, no matter how many times you check your credit report. Even if these appear on your credit report, these will never affect your credit score despite you checking five times in a single day.

When you are pre-approved for a special credit card offer or personal loan, it is very likely that the Bank would have carried out a soft inquiry on its existing customer base, such as you. Banks periodically review its existing pool of customers for assessing risk of its loan portfolios and finding out good customers whom to make pre-approved loan offers. Since these are soft inquiries, you do not need to worry on any negative effect of these checks on your credit score.

If you want to still keep a record of the inquiries just to stay more informed about them, CRIF can help you with the annual credit report with details of hard inquiries in your credit report.

Keep a check, always.
Consider your credit scores as a pie that represents your financial being. Your pie is divided into slices, each of which constitutes of different factors. One large slice is your timely payments, another is your length of credit history and yet another is total credit used. And then there is a tiny slice which represents your hard inquiries. It is essential to control your hunger and not to bite this slice. This diet won’t help you to lose weight but can definitely help you gain some points on credit score. It is essential to keep your credit on a check as it gives you an accurate position of your credit standing.

To ease out the hassle of keeping a check on your credit score, you can contact CRIF. It is an RBI-approved credit information bureau that gives trusted and accurate results of the credit score.

7 Surefire Ways To Improve Your credit Score

Your financial health is as important as your physical health. Certainly then, your credit score is a vital indicator of the former. Whether it’s the new apartment you are eyeing or a business that you are planning to set up or simply the medical expenses of your loved ones, a loan could be required anytime. As such, the first thing a bank looks for, before lending money, is whether you qualify with the required credit score for a personal loan or a car loan or a consumer loan. This is to ascertain your risk value to the bank. Following are just some of the key ways to ensure you keep your credit score, well above average.

1. Pay your dues on time: This is the single most important factor which influences your credit score. Clear your outstanding dues on time. When you spend from your credit card, make sure you don’t just pay the minimum amount required to continue the usage but pay in full or the maximum amount which you can afford for that particular month.

2. Cut your Credit Cards: Although there is no restriction on the number of cards one can use, it is better to have only as much as you can pay for. For instance, if you have multiple credit cards, then your total credit increases, but then you may also have to pay a minimum amount to maintain the cards. And It’s easy to lose track of the payment dues especially if they fall on different dates and have a variable amount. A series of defaults is good enough to pull your score down. A better way to increase your credit limit and decrease spend ratio is to have no more than 3 credit cards at a time. If you have only one, and you are paying the dues on time, then nothing like it. One more benefit of minimizing your credit cards is cutting down the probability of identity fraud, by restricting the loopholes leading to your account.

3. Use your Credit Card responsibly: Most of the time, rampant usage of Credit cards is accountable for a low Credit score. It is a good practice to use your Credit card with the thumb rule that you restrict your spending upto 30-35% of your credit limit. If you frequently need more money than that, then you may opt for another Credit card. Think of your Credit Card as a necessity, not as a luxury.

4. Old is gold: A good history of timely payment exhibits responsible behavior. Do not hasten to erase your records from the accounts once you have paid your dues in full, because a trail of paying EMIs on time is actually a score booster. Also, in case of credit cards, if you are planning to discontinue the excess ones, make sure that you retain the older ones and eliminate the newer ones. A credit card with a long history of timely payments indicates a good track record.

5. Limit your loan applications:It could happen that you apply for a loan at a bank, but it gets rejected owing to a low credit score. In such case, do not hasten to re-apply with another bank as they would be able to see your rejection by the previous bank. This could further hurt your credit score & make things worse. In case of Credit cards, applying for multiple cards at a time indicates a credit hungry behavior.

6. Be cautious with inquiries: Whenever you want to buy a new car or a new house, you would want to opt for a loan. And it’s a common practice to enquire with various banks to compare and contrast the interest rates before you crack the perfect deal. However, banks check your credit score everytime you enquire. Such an enquiry is termed as hard enquiry. A number of consecutive hard inquiries is enough to hurt your credit score. In fact, as an immediate consequence, it may even affect the amount of loan that you are entitled to.

7. Keep a track of your Score: Checking your credit score regularly is a good and harmless practice. It helps you keep a check on your financial health and accordingly devise adequate measures to rectify it. You can check your Credit score for FREE and obtain a detailed report by availing CRIF services. You’ll be required to input some basic information and answer a few questions to get to the report. There’s no limit to the number of times you can check as this is a soft enquiry and does not affect your Credit score.

5 Financial Lessons To Learn From Ramayana, This Dussehra!

The festival of Dussehra epitomizes the victory of good over evil. The mythological stories associated with Dussehra teach us to curb our greed and ward off bad intentions that may harm us in the long run. We often draw inferences to conduct our life’s daily routines from our ancient epic saga’s. As you gear up for Dussehra puja this year, we have a suggestion for you! How about taking a new and fresh perspective at your finances in a whole new way? Here we are chalking out a few financial planning lessons that can be acquired from the Ramayana and imbibed for leading a healthy financial life.

1. Destroy the financial evils on your wealth creation journey:

During the Lanka war, Lord Rama along with his army fought with bravery against various hardships to attain victory. Viewing the festival from a finance and investment perspective; the festival imparts a vital lesson of ridding away from all the demons that pose as an obstacle to financial planning and wealth creation journey. Surmounting credit card debts, binge-spending, timing the market, booking losses amongst many other hurdles are the real enemies on our wealth creation journey

2. Lead a disciplined life:
Lord Rama practiced “dharma” meaning one has to be upright, responsible and disciplined in life. The same theory of righteousness can be applied to our finances as well. We must save wisely, spend cautiously and invest smartly to lead a disciplined financial life. It is essential to inculcate good habits like following a financial plan, repayment of EMI’s and bills on time, and many such actions that affect the overall financial health in a crucial way.

3. Protect your hard earned money:
Dussehra teaches us to draw our own “Lakshman Rekha” in order to safeguard our finances. Protecting your money means shunning all the evils that negatively impact your financial well-being. You can always protect your finances by choosing to invest in the right places to save on tax or insure for right cover to protect your family like Lakshman Rekha was there to protect Sita. While you do that, keep a tab of credit scores too as they can paint your financial picture either green or red! CRIF allows you to check your credit score free once a year and what better occasion than Dussehra to do it. Check your FREE credit score now.

4. A life of patience and persistence:
Lord Rama along with Lakshmana and Sita were exiled to the woods for 14 years; he accepted his fate and maintained composure. When the Lanka war broke out; Lord Rama fought with patience and perseverance without giving up or using short-cuts These two incidents in the Ramayana signify the importance of being patient and perseverant in the hardest of times. Irrespective of the ups and lows in the market, as an investor you should be patient enough to let thing start working according to your financial goals.

5. Clean your slate and start fresh:
The Lanka war of 14 days marked the defeat of evil and paved way to newer paths. Undo your bad decisions that you’ve taken in the past related to your finances by making some relevant and good decisions to streamline your financial picture for better money management. The first action you should be taking is improving your credit score as that itself can influence a lot of your decisions. Remember to check your credit score with CRIF, one of the most trusted credit bureau that enables you to keep your financial records straight.

A country, where people know how to spend, will be a country where people will eventually learn to invest intelligently. We are gradually migrating towards financial maturity rather than merely a nation of tight-fisted spenders and savers.

Just entered your first job – Start Building your Credit History too

It is simply a great feeling when your first salary gets credited into your bank account. Getting financially independent is certainly an achievement, but at the same time, it comes with equal responsibilities. Knowing one’s urge to spend and more so these days over digital means, banks start approaching you for credit cards and you also start getting excited and apply for a couple of most rewarding credit cards. But alas! the credit card application gets rejected. The Reason, you don’t have any credit score – i.e. no history found in credit bureau. However, you shouldn’t worry, as building a credit history is not a tough thing to do.

The first steps to Building a Credit Score

The best thing you can do is to just start off with applying for a credit card with the banks you are holding a Savings Account already or where you open your Salary account. You can also apply for one of the basic cards, to begin with rather than going for the most premium card the bank has to offer. Specially designed credit cards are now being offered by banks to those who have just joined the workforce. If you are employed in the public sector or with reputed private companies, you may be eligible for a credit card based on your salary slip. If you are not getting a credit card even from the bank where you have salary account, you can apply for a secured credit card against a fixed deposit – you can begin with as low as Rs. 20,000.

Another way of building your credit score could be exploring the exciting zero-cost EMI offers offered by financiers for mobile, bike or laptop. These also require a credit score for approval, however, many of the lenders approve loans for people with no credit score.

Maintaining a good Credit Score

Since now you have begun building your credit history, here are a few tips to maintain a good credit score too:

  • Use your Credit Card, though control your spends: Just getting the credit card will not get you good credit score. Try spending only up to 40% of your credit limit to keep the balance low it will help you repay the full amount on the due date.
  • Repay your card dues and EMIs in time: A consistent regular repayment on your card dues and EMIs will definitely help you with a good score. If you took an education loan, repaying when EMI’s become due also helps you build a credit score. If you become delinquent and default on your education loans, your credit score will be negatively impacted because the lender will report that you are not in compliance with the terms of your loans.
  • Limit Your Applications for New Card or Loan: Too many credit inquiries on your profile by banks whether they be for a credit card or a loan also can also bring down your score, so make sure you’re only applying for credit only when it really is necessary. Select a credit card and a bank after doing research rather than blindly applying for credit with many banks.
  • Checking your Credit Score regularly: Don’t lose the good credit score you’ve worked for! Just like a car that fails to work if not maintained, credit history too can fail to work if it is not maintained. Tracking your credit score every quarter helps you stay on top of your own credit report and thus, maintain a good credit score.

Now that you have mastered the art of building and maintaining a good credit score, pat yourself on the back and start dreaming for the better things in life, right from the newly launched bike to the latest I-Phone to a swankier car and a beautiful house, you can have it all…!!


4 Proven Hacks to Build a Great Credit Score

Building a good credit score is very similar to building a good reputation; both require an immense amount of work and patience. Loans are a crucial part of the modern man’s life and building a rock-solid credit history is of paramount importance for getting a big loan approved. If you are successful in maintaining a high credit score your quality of life will take a 180-degree turn as you will be able to buy all the luxuries in the world for yourself and your family.

But the sad part of the story is that your scores can drop real quick for the smallest of the reasons. It can be disheartening to know that you have a low score when you open your credit report. But hey, do not be discouraged, you can still work things out! Wondering how? Look no further, we have compiled a list of 4 things you can do to build a great credit score.

Repay your card dues and EMIs in time:
Yes, however stereotypical this suggestion sounds it is actually true. Every credit risk analytics expert swears by this strategy. A consistent regular repayment on your card dues and EMIs will definitely help you with a good credit score. If you become delinquent and default on your loans, your credit score will be negatively impacted because the lender will report that you are not in compliance with the terms of your loans. Even if you missed a payment, do not sulk in worry. Get up and bring your loan to regularity now.

Utilize your card with caution Don’t use the card to its full capacity:
Having a credit card is not your ticket to go overboard on shopping! Things can take a detour and you may soon find yourself in a pool of debt. Using the card to its full capacity is never the right thing to do. Try spending only up to 40% of your credit limit to keep the balance low it will help you repay the full amount on the due date and also keep your credit score in low.

Limit your credit card applications or loan:
Too many credit inquiries on your profile by banks ‘whether they be for a credit card or a loan’ also can also bring down your score, so make sure you’re only applying for credit only when it really is necessary. Select a credit card and a bank after doing research rather than blindly applying for credit with many banks.

Checking your Credit Score regularly:
Don’t lose the good credit score you’ve worked for! Now’s definitely a good time to ask yourself if you’re being proactive about protecting your financial health. Management guru Peter Drucker said that you can’t manage what you can’t measure. To manage over your credit and your financial life, you must measure your creditworthiness through the credit score regularly. Tracking your credit score every quarter helps you stay on top of your own credit report and thus, maintain a good credit score.

So there you have it, all you need to do is blend these simple steps together and make a great recipe for a good credit score! If you still feel uncertain about how to build and maintain your credit score, you can read our BLOG or feel free to get in touch with us!


4 Ways Credit Score Can Impact Your Financial Life

Credit Bureaus such as CRIF are dedicated organizations set up to assess the risk of a loan being given to an individual or a business by banks and financial institutions. Various factors like paying your EMI’s and card dues on time, how long you have had and used credit, number of credit inquiries you have made in a particular amount of time etc. are considered to determine a person’s credit score.

Having a good score with credit bureaus is one of the most prominent characteristics of a responsible person. A good credit history indicates that a person is in control of his/her finances and has made past payments on time without any negative remark. Generally, the higher the number, the more trustworthy you appear to lenders. The lower your score, the more difficulty you will face. We take you through the potential effects a credit score can have on your financial life:

1. Incurring Lower Interest Rates on Loans
If you are in the good books of credit bureaus, then you’re most likely to incur lower interest rates on loans while, on the other hand, you might not get a loan at all if you have a poor credit score. For a score with a range between 300-900, a credit score of 700 or above is generally considered good. People who keep paying timely installments on their loans and credit card dues get extensions on limits subsequently when their credit limit gets stretched. A good credit gives you the negotiating power when applying for a loan in terms of interest rate and loan amount.

2. Get Home Loans Processed Swiftly
Owning a home sweet home is the dream of every individual. If you are looking to buy your dream apartment, there are two things you consider: a pretty home and a not-so-pretty home loan. However, what matters the most in swift approval of your home loan is your credit score. Home loan limits are dependent on income but a poor credit history might cancel out / nullify your chances of getting one irrespective of how much you are currently earning. On the other hand, with a good credit score, the chances of loan approval are higher. This is because the lenders consider you as trustworthy. Read our blog 4 things to consider Before You Apply for a Home Loan to land into your dream apartment.

3. Employment Prospects
The penetration of credit score has gone beyond as an integral part of the loan approval process for banks. It is increasingly being used as the selection criteria before scheduling interviews. Employers in banking and financial services (BFSI) are checking credit scores of candidates as a part of their employee verification process before hiring them. So if you are searching out for a job, then not only preparing for the job interview but checking your credit score and improving it also becomes indispensable. A lower score can thrash your desires of a dream job.

4. Others
Globally a credit score is also used by the insurance firms to set the premium charges on their policies. Even telecom companies use it to set the security deposit that they require before giving a connection or decide the credit limit. this is beginning to happen in India as well, as insurance and telecom companies have begun using credit scores. We are already seeing early use of Credit Scores to establish credibility of the groom in case of arranged marriages and of the tenant in case of rentals.

Hence a bad credit score affects many more aspects of your life than what you must have imagined. Any bad credit decisions will keep you on the back foot. It may not put an end to your financial journey, but it definitely slows it down. Though there are lenders who might be willing to offer loans even with a low credit score the rate of interest tends to be significantly higher in such cases. Hence it is prudent to maintain a good credit history. Like an annual health check-up do a regular credit score check too, to take charge of your financial life. You can get your credit scores in a few simple steps by visiting


4 Things to Consider Before You Apply For A Home Loan

A home sweet home is a personal asset that you have dreamt of owning for a long time now. If you are planning to buy a home, there are two things that you think of: a pretty home and a not-so-pretty usually-unavoidable home loan. However, what matters the most is qualifying for the home loan. It is very important for lenders to assess your repayment ability, which is essentially evaluated on the basis of your earnings, expenses, savings, work profile, financial capability and repayment history of loans and other dues. A bad credit score and the ghosts from the past, i.e. your credit debts or poor payment history can pose a problem while qualifying for a home loan. Here are 4 important tips to check before you go for a home loan:

1. Check Your Credit Score: A credit score lays the foundation for your easy home loan application process. This score depends on how consistent you are or how good your record is for paying your EMIs and credit card dues. The credit information report (CIR), which contains your Credit Score, is basically the credit history of your borrowings from different institutions such as banks or NBFCs (Non-Banking Financial Company) or Housing Finance Companies (HFCs). A trusted credit bureau prepares and maintains your credit records and shares it with the banks/lenders whenever an enquiry is made by the loan provider. The higher the credit score, the higher the chances of the loan getting approved. And also once can expect the best rate of interest on the home loan as a bonus. Ensure you check your credit score at least six months, preferably 12 months, before you plan to buy a home.

2. Consider your budget, down payment and EMI: Define your budget for buying a home, how much money you can consider for down payment and how much of home loan would you require. Typically, you can get 80% of the value of the property as a home loan if your income seems sufficient. Identify the EMI range that you are comfortable with, as that will help you decide the tenure of the loan. You can use online EMI calculators to play with various options in helping you here. In case your income is not sufficient, you can think of adding your parents or spouse as a co-borrower.

3. Documents Required for Home Loan: Before you go and apply for a home loan, it is necessary to understand the necessary documents required and ensure they are available before you approach a bank or housing finance company. Here is a list of documents that you should be ready with:

  • Income Tax Returns or Form 16 for past 2-3 years make sure all taxes are filed
  • PAN Card – the lender would carry out a PAN Verification to know its authenticity
  • Aadhar Card – the bank would also do an Aadhaar verification to verify your identity
  • Bank Statements for past 6-12 months for a bank account where your income and expenses reflect. Make sure you maintain a reasonable balance in this account over past 6 months.
    – Last 3 Months Salary Slips if you are salaried
    – Application Form with Photograph Duly Signed

4. Identify the right banks and lenders: Avoid applying to many lenders at the same time, as many credit inquiries can negatively impact your Credit Score. It doesn’t mean that you should not compare your options. Identify the banks or housing finance companies which have pre-approved the property where you plan to buy a house as that can reduce your loan approval time. Understand the eligibility criteria of such lenders in terms of the cutoff for credit score and the loan scheme (processing fees, the rate of interest etc.). Select one or two lenders which best match your requirements and get your loan sanctioned from them before booking the property.

Taking into consideration all the above points will prepare you well for your home loan and thus, improve your chances for a quick home loan approval. If co-borrowers are being considered for, do ensure you prepare them to check their credit score and keep their documents handy.

Take the first step now towards your dream home. Check your credit score on CRIF today!


How I Raised My Credit Score By 250 Points

I had already unfolded the climax in my previous blog, on how I was being denied higher education due to my own credit mistakes. This blog is essentially the return of the hero who fights with bad credit and lives happily after with a great credit score.

850. That was the number printed on my latest CRIF Credit Report. Read ahead to know – How I Raised My Credit Score By 250 Points.

Credit Score = Trust?

One of the premises of a civilization or society is its need for safety. It is because of this need for safety from the wild did the early human start forming communities. Humanity has evolved and advanced a lot from them, but the basic need for safety is perennial. It is very important to have those few trustable companions or entities who make us feel safe.

Since the age of the Kings and the Landlords, the practice of lending also pivoted around the similar element of trust. Lending has transformed from being a local, personal referral based activity now into a very large industry backed by digital systems and a sense of trust emanating from the use of data sciences. The industry allows instant lending and peers to digital peer-to-peer lending on basis of data-backed trust that the person taking the credit will pay back after the pre-defined time. This data-backed trust comes from the “credit scores” provided by the Credit Bureaus by understanding behavioral patterns from the millions of records of individuals such as you and me.

I realized that I had to improve my credit score from 500 so that a bank can begin trusting upon me to repay its money. In my quest to improve, I began analyzing my credit report against the five major factors that form the basis for a credit score. And voila, I had devised a clear plan of action to seize control of my credit situation-

  • Payment History : my credit report clearly reflected my negligence around making payments towards my credit card dues. I would generally pay up money only after many follow-ups from the credit card companies, perhaps this was one of the most important factors barring me to pursue my dreams. I immediately cleared pending dues on all of my credit cards and vowed to now pay full dues at least 3 days prior to the due date.
  • Age of Credit : I had 4 credit cards. Since now I have to pay on all cards in time, I decided to close 3 of these cards. I decided to maintain the oldest credit card I had, as the higher age of credit means a better credit score.
  • Credit Utilization : The average spend on each of these 4 cards was nearly 80% of the assigned credit limit. This meant that the credit utilization ratio was 80%, which ideally should be 30-40%. The credit card I chose to retain was linked to my salary account. My banker helped me get the credit limit of this card increased. This enabled me to enjoy higher credit just with one card, but have a low utilization. I crossed my heart to not use above 25% of the allowed credit limit at any point.
  • Type of Credit : I pledged to explore a car loan (secured loan) and diversify from just having credit cards (unsecured loans). And the next year when I had a slightly better credit score, I took two additional loans, one for buying a car and the other for buying a laptop and paid them off in the same year. This allowed me to add different types of credit as well as provide better evidence of my credit behavior.
  • Number of Credit Inquiries : This did not seem to be a problem for me, however, I have since then avoided unnecessarily applying for credit cards or loans.

12 months of discipline had helped me improve my score from mid 500s to 670, it helped me get a car loan — but it wasn’t enough to help me fulfill my dream. After another six months of care, my credit score was above 750 and I was packing my bags to leave for an MBA. All I needed was a basic understanding of credit score and discipline to follow my plan. Last month I repaid my education loan but still continue to follow the rules I set for myself 5 years ago. As you read my story, let me tell my credit score as of today stands above 850.

Today, in parts of the world, your credit score can stand in your way of getting accepted as a tenant, employee or even spouse. Hence it is becoming paramount to manage your credit score to maintain your credibility not just for getting loans but for fulfilling your dreams. Don’t let your ignorance hamper your dreams.

Get Educated and Educate Others. Journey to happy credit starts here – CRIFHIGHMARK CREDIT REPORT

About the Author: Subhankar Mishra works as Service Delivery Manager at CRIF High Mark, India’s largest Credit Bureau database.