Be a self-credit watchdog and avail free credit score

It is an unsaid norm that one must never spare a freebie – not even a free credit score report. After all, it is the factor that ensures your financial future and well-being.

A healthy three-digit score, which is anything between 750 and 900, is more likely to get the customer access a wider range of credit cards, loans, or mortgage rate offers. Secondly, while a high score gets an almost thumbs up from the creditors, scores below the 750 mark raises suspicions in the minds of the lenders. This is a win-win situation for the credit-holders.

On the other hand, closer the scores are to 300, the higher are the chances of the loan application being turned down and even if it gets sanctioned, the borrower will have to agree to the terms and conditions set by the lender. Hence, it is necessary that credit holders get their credit reports regularly and not ignore the free credit score reports.

In fact, the Reserve Bank of India (RBI) has made it mandatory that all consumers receive a free credit score report annually from the credit bureaus that maintain their respective credit reports. 

Below given are a few advantages of credit score reports that every credit holder must avail

Benefits

• Aids maintaining good credit habit: Credit reports are similar to bank statements in nature. It helps the customer in keeping a track of his spending habits and check areas of overspending or indulgences.
• Helps identify inaccuracies: Often people don’t take an interest in scanning their free credit score reports. This is a grave mistake that they make for there could be errors or misprints in it that could be harming their scores and that too when they have been paying all your bills in time and maintaining all good financial habits. Just taking a few devoted minutes to scan the report would benefit them in more ways than one.
• Qualifies customer for fresh credit: With a credit report in hand the customer gets to know his exact financial standing. If the scores are low, the customer can work on improving them as it indicates a high-credit risk from the lender’s point of view. This could eventually lead the customer into paying high-interest rates.
• Signals identity theft: Identity theft is more serious in nature than inaccurate information on the report, and more frequent than one can think of. A free credit score report can help the customer find names, transactions, social security numbers that don’t belong to him. On identifying such fraud transactions the customer must immediately bring it to the notice of the credit bureau.

Conclusion

Being a self-credit watchdog is surely a good habit and believes us when we say that the efforts have its own set of advantages

How a firm’s credit rating impacts investors and borrowers?

The credit ratings are issued by Credit Rating Agencies (CRA) that assess and rates debtors based on their ability to pay back their interests and loan amounts on time.

Here, we would like to make it clear that people often misinterpret credit scores with ratings. Different agencies award individuals with scores (between 300 and 900) while different agencies are there for rating companies (letter grades with symbols like Aaa or B+ up to D). What remains common in both the cases is the fact that higher the scores, better is the borrower’s bargaining power and those with lower or poor scores or ratings are considered ‘risky’.

A firm’s rating is a guide to the investors, lenders, dealers, suppliers, etc., who evaluate the risk of timely payment of interest and principal on a particular debt instrument. Credit rating creates awareness about the concept of rating amongst corporations, merchant bankers, brokers, regulatory authorities, and helps in creating an environment that facilitates the debt rating.  

Below given are a few points that will help you in understanding the key benefits of having impressive credit ratings.

From an investor’s point of view

1. Provide insight: Ratings provide insight to investors about the financial credibility of the applicant entity. This gives investors/ lenders the confidence and helps them decide whether to invest in such companies or not.
2. Encourages trust factor: Good rating ups the image of the company. It creates a place of trust in the eyes of lenders about the applicant entity. High ratings assure them about the safety of instrument and minimum risk of bankruptcy.  In such cases, investors are even happy to do business with entities on low-interest rates and tenures that suit the entities.
3. Saves time and effort: Investors/ lenders save a lot of time, energy, costs and manpower by simply taking a look at the entity’s report. The investors depend on the rating to analyse the financial stability provided by the professional reporting agency.

From borrower’s point of view

1. Provide visibility to lesser-known companies: Entities that get a high rating for their instruments try to ensure healthy financial discipline. If the ratings are good, then investors will be willing to do business or give loan to them.
2. Better prospects: An entity with a good rating can approach more investors/ lenders having an upper hand while negotiating terms like tenure, interest rates, etc.
3. Provides/ interprets complex information at low cost: Firstly, as per the Reserve Bank of India (RBI) guidelines, credit rating agencies are required to provide a report to its clients free of cost. These agencies collect, assess and interpret complex data based on the information provided by financial institutions and other lenders.

A lesson for those who skip ‘check my credit score’ option

Credit scores indicate the financial health of an individual which is based on an individual’s or a borrower’s history of repayments and financial credibility. The scores prescribed by Civil range between 300 and 900 and scores above 700 and closer to 900 are considered happy scores.

Such dynamic scores are an assurance to the banks, creditors and lenders that the loan they give will be repaid. It gives them the chance to assess the borrower’s financial habits and whether he is responsible in money matters. However, there are people who have no credit history or have never taken a credit at all. Before we venture out on the topic in detail, let’s understand why it is important to have a check my credit score in the first place.  

When people with no credit history approach creditors, they give rise to the following three concerns

• The applicants intention to pay is not clear to the lenders as they don’t have a proven track record
• It is difficult to believe that with so many banks and financial institutions aggressively selling their credit cards and loans a person with a stable job does not have a credit card or consumer durable loan
• It also means that the applicant may probably not be having a stable source of income which puts a question mark on his repaying capacity.

Hence, most applicants with ‘0’ or ‘-1’ scores are turned down unceremoniously.  

What -1, 0 scores mean to creditors?

Scores that are ‘-1’ means you have no credit history making it difficult for the lenders to assess your repayment capacity. This type of score is also known as ‘NH’ or ‘No History’.

‘0’ scores mean that credit history information of less than six months is only available to the lending firms. These are also known as ‘NA’ or ‘Not Applicable’.

Don’t lose hope

Though those falling in the above two categories are heavily liable for loan rejection of applications not all is doomed as they still stand a chance of negotiating with lenders. Of course you may not get the best of terms, but then the EMIs could be lower and they could sail through the loan term with reasonable ease and raise scores for future financial dealings.

In conclusion: Lenders, creditors and banks are always, and rightly so, more comfortable to fund tried and tested customer at lower rate of interest than giving loan to a new or high risk customer even at a higher rate of interest.

So, if you do not have a great credit score. Don’t worry anymore. Check out more information on the topic by logging on to https://creditsscore.in/how-to-check-credit-score.

Ditch your debt, Check credit score online

Living in debt isn’t a good feeling. It has an impact on the mental and financial health of the borrower and poses a major hazard in monthly budgeting as well. Even if the borrower happens to be a financially responsible person and confident about repaying the debt, the credit status plays on his conscious as well as his sub-conscious mind. On the other hand, the joy of repaying a debt is beyond words. However, paying a loan is easier said than done. In reality, there could be a huge period and various practical reasons before the debt are paid off.

But there is one thing that we as borrowers can do and that is to check credit score online. If we have been following good financial habits, our good credit scores will give us that wee-bit of happy streaks now and then.

Below given are a few reasons why one must make it a habit to run a regular credit score checks.

1. Let’s you know your financial standing: Skipping or ignoring your credit score status could be dangerous to your financial health if not fatal. It doesn’t matter if the scores are poor or great – what is important is to know where you stand.
2. Helps maintain accuracy in a credit report: Credit scores are processed after going through several hands and companies at financial institutions and credit bureaus. This increases the possibility of human error even though it may be finally computed by machines. Hence, one cannot rule out the possibility of your scores suffering even if you may not be at fault. Frequent and thorough check credit score online of reports ups the chances of spotting these errors and thus, upping the scores through rectification.  
3. Reduce the possibility of loan rejection: This is essential if you have to apply for a loan. Applying for loans without knowing your scores could lead to rejection (if the scores are low) which would result in a hard pull and eventually hurt the scores.
4. Fetch options for better offers: This is indeed a great advantage. Knowing your scores could land you with better options of having pre-approved loans and credit cards, lower interest rates on loan amounts, easy repayment tenure and much more.
5. Lets you know what hurts your scores: Doing so lets you manage your finances in a manner that will aid the scores growth. If the scores are poor, you can get to know that in time and start work on improving them and if you already have good scores, you can make efforts to keep it status quo or even on bettering them.

So, it is advisable to check credit score online regularly to enable you to be on top of your debt and scores.

Check out https://creditsscore.in/check-my-credit-score for more on how to check credit score for free.

Be wary of credit score repair agencies that make fake promises

People struggling with finances could easily fall prey to companies offering quick-fix remedies to falling credit scores. Financial experts have time and again warned against indulging in such activities as there is no such remedy that can help scrub your credit files. All these companies can do is initiate steps to ensure that their customer’s credit reports are errorless and provide you with the best possible credit score for your situation.

Most of these agencies have a great understanding of the nuances of laws about consumer protection, financial issues and easily exploit policies to benefit their customers, yet they cannot cast a magic spell to boost credit scores overnight. They won’t be able to do any good to the debts that sit on the individual’s report or remove valid negative items from it. For example, if there has been a negative marking concerning a missed or delayed loan payment or credit card balance on your credit report it is bound to stay there for at least seven years. Anyone who tells you that the negative marking could be erased could be misleading you.

Credit score repair companies are ideal for those who lack negotiating skills, are too busy with their careers, believe in outsourcing financial dealings to professionals, etc. Of course, these companies charge a hefty sum for the services which is fine when compared to the attention and devotion finances require.

How do credit repair companies work?

Credit repair companies work in sync with your creditors and bureaus. They can remove the negative marking ‘only’ if there is an error and by disputing it on your behalf. They keep a check for any irregular activities or breach of identity, interact directly with creditors, chalk and plan for your savings and spending habits, get you the best interest rates for mortgages and loans, and much more.

Do all credit score repair companies operate lawfully? 

Not necessarily. There are a lot of companies that could not deliver what they promise. So, if you decide to work with a credit repair company, make sure you hire a legitimate and reliable one. The best way to go about it is to hire companies that are reputed and time-tested. This way, it will save you a lot of trouble and even your data and credit report would be safe. 

For your benefit, we tell you to be wary of credit repair companies that make tall claims about polishing your credit scores and erasing negative markings from the credit reports.

Log on to https://creditsscore.in/, for more information on how to stay wary of companies that promise to up scores in seconds. 

How peer-to-peer loan boost credit scores?

Peer-to-peer (P2P) loan system is successful alternate financing across which has already gained roots and is a very attractive investment option for investors. P2P loans work differently than getting a traditional bank loan. While P2P allows borrowers to check rate without affecting creditsscore, a user’s request may be turned down if the score is below 630. These loans are the most common forms of personal loans.

People opt for P2P loans as a way to pay down debt more quickly at lower interest rates.  P2P loans are also referred to as person-to-person lending and social lending, and companies that offer P2P loans are called P2P lenders or marketplace lenders. In India, the Reserve Bank of India (RBI) has already acknowledged this innovation and framed regulations for the sector to avoid any mishaps. It is offered to those who are at least 18-years of age, hold a verifiable bank account and a Social Security Number.

What are P2P loans?

This financial innovation directly connects verified borrowers seeking unsecured personal loans with P2P lenders. Verified borrowers are listed on the P2P lending platform and investors can see the details about the borrowers before lending money to them. Once the application is submitted, the investor may offer the user a variety of loan offers. Selecting any one of the offers requires the user to submit a hard credit check which impacts the credit score. Once approved the funding happens directly in the account within 14 working days.

How P2P loans boost creditsscore? 

Soft pull: The initial P2P loan process extracts a soft pull which does not impact the credit score at all. So, if the loan gets rejected, the inquiry will still not impact your scores. However, if the loan gets approved and funded, the inquiry reported is reflected as a hard inquiry.

Predictable payment: P2P loans are reported as ‘instalment debt’ for which there is a fixed repayment period. The user is mentally prepared to pay the set amount of money that is due every month lessening the chances of missing payments and damaging the scores. This makes the loan predictable for the lender as well as the borrower.

Better cash flow: Those opting for P2P loans get it on lower rates which allow free flow of cash. This allows the user to have more financial flexibility and he continues to pay his debts and overall obligations with responsibility. This is good for a healthy score.

A P2P loan is a powerful tool that ensures and motivates the user to pay off his debts quickly once and for all. And that does wonders for his creditsscore.

For further information log on to https://creditsscore.in/. 

Know more about credit rating

A lot has been said about credit ratings that influence the financial strength of companies and their ability to meet debt repayment obligations. The credit rating is determined after weighing the liabilities and assets of the firm. The ratings are assigned by a Credit Rating Agency (CRA) and it takes into accounts factors like firm’s financial statements, type of debts, previous credit repayment history and future capability, etc. Each of these factors contributes to computing the company’s rating.

The process of credit rating starts after a rating request from the issuer, signing of a rating agreement and paying a requisite fee. The process, by all accounts, is extremely intensive. Both negative and positive factors affect your firm’s ratings. The CRAs assign the rating to debt instruments like non-convertible/partially convertible debentures, short-term debt, bonds, fixed deposits, etc., and not to equity instruments. These agencies owe a huge responsibility to the lenders/investors; and irrespective of any issues, they are liable to ensure transparency in the rating exercise.

Before we move on, it is important to realise that credit rating is not a guarantee, but merely an opinion of a rating agency.

Just check out on points on which ratings can be delivered.

• Credit ratings are provided on 
• Bond/debenture - issued by corporate, government etc.
• Equity shares -  issued by companies, but is not mandatory in India
• Medium-term loans (Public deposits, CDs etc.) – rated on fixed deposits taken by companies 
• Short-term instruments – the rating of commercial papers is mandatory
• Real estate, builders and developers – 
• Chit funds - rated on their ability to make timely payment of prize money to subscribers
• Collective investment schemes – rating depends whether the scheme will be successful or not 
• Insurance companies - rated based on their claim paying ability
• Borrowers 
• Banks – ensures their credibility and the capacity of repaying customer’s deposits
• States – helps attract investors from within the country and abroad
• Countries – aids interested foreign investors and lenders to know the repaying capacity and willingness of the country to repay loans.

  Keep a track of your ratings

Keeping a track of your company’s rating ensures there are no errors on your file.  Once the rating is assigned and accepted, the CRAs are liable to perform periodic surveillance of the credit quality of the rated instrument/ company. The ratings keep changing depending on the company’s financial performance and the CRA may notify it from time-to-time.

So, check your credit rating regularly and get in touch with the credit reporting body if you need your company’s report needs to be corrected.

To find out more about matters that could affect your firm’s ratings stay around and log on to https://civilscores.com/credit-rating.