Is your wallet stolen? Learn what to do!

Losing your wallet can be both intimidating and a potential threat to your CIBIL Score.

Imagine you are on vacation and enjoying a spot of holiday shopping when you reach into your pocket for your wallet and find… nothing. You now have a nightmare unfolding – that of contacting each bank and credit card issuer to have your debit and credit cards blocked or hot listed and reissued. Identification documents such as a driving license, PAN card or aadhar cards also need attention – after all, these are critical documents that can have far-reaching consequences if they fall into the wrong hands.

While all this may seem akin to the end of the world, it is not so. Before you start to panic, let’s see what all are the things you can do to mitigate the damage. The money in your wallet is gone of course, and that is possibly something you can’t replace, but for almost everything else, help is close at hand. Let’s take a look at all the available options – after you have calmed down somewhat, of course!

Is your wallet really lost, stolen or just misplaced? The first step would be to think back to when you last had your wallet. If you were at a mall or store for example, retrace your steps. Did you whip out your wallet to pay for your purchases and leave it at the counter? Would you have dropped it en route? If you’ve been home for a large part of the time, check thoroughly just in case it’s fallen or been dropped in some corner of the house.

However once you have established that it is indeed missing, read on to know what you should do.

Block all cards – Whether debit, credit or charge cards, call up each bank or card issuer and have all your cards blocked. If you do not have their helpline numbers at hand, log on to the website and get them. Once done, sit down calmly and make those all-important calls.

When you call the banks and/ or card issuers, be sure to mention that your wallet has been lost or stolen, as the case may be. If you can provide an approximate time in addition to the date that the incident occurred, it would help the financial institution to let you know whether any transactions have been carried out since. Finally, once you have the cards blocked, be sure to request for replacement cards.

Stop-payment – Whether a cheque or chequebook, do mark a stop payment against these instruments to prevent misuse. Be especially alert in case you had a bearer’s cheque in your wallet – these are not crossed favouring a particular payee’s account and hence can be misused by anyone to withdraw cash, especially if the payee details were blank.

File a police report – Now that you have ascertained that your wallet has indeed been lost or stolen, you would need to go to the police station (in the jurisdiction of where the loss/ theft occurred) and file a First Investigation Report (FIR).

List the contents – In addition to money, your wallet is likely to contain debit and credit cards, identity documentation, a cheque book or maybe even a cheque that you have been meaning to deposit or encash. Make a list of the contents as best you can remember so that it is just that much easier when you have to go about methodically getting things back on track.

Check your credit report – Do pull up a copy of your credit report from all the credit bureaus (namely, CIBIL, Equifax, Experian and CRIF High Mark) operational today, as this will help you check whether any credit – be it a loan or credit card – has been fraudulently obtained in your name. If you do see an unfamiliar account on your report, notify the concerned bureau immediately to track it down. You need to do this to ensure that you are not a victim of identity theft, and to keep your credit report clean.

Wallet Protection Plans

As the old adage goes, prevention is better than cure and while ensuring the safety of your wallet is not something that you can predict, you can however take adequate measures to minimise the damage and stress. Banks and other institutions offer a wallet protection plan that safeguards the contents of your wallet. On payment of a reasonable annual fee, some of the things your wallet is protected for include:

  • Replacing lost PAN card and driving license
  • Comprehensive fraud protection coverage – both online and offline
  • Blocking a SIM card
  • Emergency travel assistance (hotel and ticket booking)
  • Emergency cash limit
  • Emergency roadside assistance
  • Online locker

Of course, before signing up for any services be sure to first check with the organisation offering the plans, and then carefully read the fine print to know exactly what you are signing up for.

Understand the loan underwriting process

When you apply for a loan, as part of the process the information given by you is scrutinised and analysed in depth by the lender’s underwriting team before a decision is taken as to whether to approve or decline the said loan application.

What is loan underwriting?

Loan underwriting is the process wherein prior to taking a decision of whether to approve or decline a loan application, the lender (that is a bank or other financial institution) verifies the information provided by the applicant and confirms that the requirements as laid down by the lender for a particular loan facility are met.

Loan verification includes taking into account items such as employment or business history, salary or income and other financial statements, and the borrower’s credit history as detailed in the credit information report. Finally, it also takes into account the underwriter’s evaluation of the borrower’s credit needs and their intention as well ability to repay a loan they avail of.

The length of the underwriting process depends upon factors such as the completeness and complexity of the loan application received. It is also influenced by factors internal to the lender such as the underwriter’s experience as well as how busy the lender may be at the time. For example, if you apply for an education loan just before the start of a programme, it is likely that a lender already has their hands full with similar applications owing to the peak enrolment season and hence the time taken to process the application may increase.

What are the factors considered while underwriting loans?

Sound underwriting comprises of many aspects – judgement, experience and the underwriter’s ‘gut feeling’. This makes the process both subjective as well as objective. It is subjective to the extent that the underwriter forms an option about the borrower and their repayment capacity basis relevant opinions or impressions formed while reviewing the application. The objective view comes from understanding and analysing in depth the verifiable facts (such as income, other loan outstanding, past repayment track record) available before making the loan decision.

Let’s then take a quick look at the credit decision process.

Calculation of monthly expenditure: When a lender reviews your loan application they take into account the monthly outflow that you have, factoring in any obligations you may have, including monthly household expenses etc.

Existing debt repayment: When you have an existing loan the lender will take those into account as well, to determine whether it is possible for you to take on a further debt burden.

Monthly income: Not only is your cash outflow taken into account, but also what it is you earn each month, be it by way of a salary or a business income. This amount can also include any interest income (from investments such as fixed deposits) or rental income (from a property you are renting out), as it is an amount that occurs with regular frequency and can be relied upon when calculating the amount of debt you can undertake.

Debt to income ratio: What an underwriter does when assessing your loan application also includes determining just how much your current debt (or outstanding) is in comparison to your income. When your income holds its own against the outflow, the outcome is considered to be favourable and increases your chances of getting a loan. This is because you come across as someone who can handle debt well.

Review of credit profile: An important part of the process is scrutinising the applicant’s credit profile, i.e. pulling a copy of the credit report from a credit bureau to estimate the individual’s creditworthiness. This report is carefully scanned to check for loan defaults, skipped payments, account write-offs etc.

Keeping all the above factors in mind, the underwriter will review the applicant’s profile in entirety before making a decision either way. This in-depth analysis helps them to understand the risk involved in lending to a particular customer.

Loan underwriting and CIBIL scores

If your CIBIL score is good, the options available to you are a lot more, and most banks and financial institutions will be willing to lend you the loan amount you are looking for, whether to purchase a house or a car.

But do keep in mind that a credit score is one of the parameters that a lender uses while evaluating a loan application and is not the sole factor taken into account by any means. It is primarily a guideline and not used in isolation to other factors. If your credit score is low, it is not a given that a lender will reject your loan application outright; they are likely to weigh the other parameters as well, before taking a decision either way. Of course, the terms at which you may be offered the loan could likely be less competitive especially with regards to the interest rate than they would be otherwise, but a low score definitely is not the end of the road.

In conclusion

The loan underwriting process is a judgement call and underwriters are also human beings, willing to take a risk on those they believe will turn out to be ‘good’ borrowers! It is advised to check your CIBIL report before applying for the loan.

CIBIL score repair made easy!

Karan was looking to upgrade from his existing two-wheeler to a car and approached his bank for an auto loan. He was shocked to learn that his loan application was rejected on the grounds that his CIBIL score was low. Neither did Karan know much about his score, and nor was he aware as to why it was so low. Taking this as an opportunity, Karan analysed his spending behaviour pattern and religiously monitored his CIBIL score.

Does Karan’s situation sound unfortunately too close to home? Are you also looking at ways and means to better your own credit score? If yes, you’re in the right place – read on to know more!

In today’s financial environment, your credit score is akin to your passport to good credit when you require it. As in Karan’s case above, he was unable to obtain credit when he most required it, and hence when he eventually did get the loan it was at a higher cost and seeing that the price on the car also went up in the same period, he wound up spending more money than he would have otherwise.

What is a credit score?

A credit score is a three-digit representation of your creditworthiness, i.e. the likelihood of a borrower going to default on a loan. It is derived from your credit report which is a detailed analysis of your credit behaviour, both past and present.

When you approach a bank or other financial institution for a loan, the first check thye conduct prior to taking a decision as to whether to lend is to call for a copy of your credit report and go through your credit score. Typically ranging between 300 and 900 a higher score equals better chances of loan approval at the most competitive interest rates and other terms.

What then is the CIBIL score?

There are four credit information companies or credit bureaus licensed to operate in the country by India’s apex bank, the Reserve Bank of India (RBI), namely CIBIL, Equifax, Experian and CRIF High Mark. Of these CIBIL is the oldest bureau and hence very often, the term ‘CIBIL score’ is used interchangeably with ‘credit score’.

However, bureau reports and scores are both available across all four bureaus and if you wish, you can obtain a copy of your report from any or all of these bureaus. While the score itself may differ from one bureau to another, the analytics on which it is based is similar as all bureaus take into consideration the same factors when calculating the credit score.

What are the factors that impact the credit score?

A credit score is determined on the below mentioned parameters which are determined from your credit history:

  • Repayment track record or payment history
  • The amount you owe lender(s), or the outstanding due on your loans/ credit cards
  • Credit history
  • Credit mix, i.e. type of loans including secured loans (such as housing or auto loans) and unsecured loans (for example, personal loans or credit cards)
  • New credit, i.e. the number of times you apply for fresh loans or credit cards, which indicates your financial solvency and dependency on debt

What causes damage to the credit score?

Below are some of the factors that impact your credit score:

  • High credit utilisation ratio
  • Delay in bill or EMI payment, or skipping a payment altogether
  • Applying for multiple lines of credit, for example: several credit cards to enjoy the initial benefits on joining
  • Having no line of credit can also go against you, hence for instance, getting a credit card to establish good credit history is a prudent alternative

How does one repair the credit score?

The first thing to do would be to call for a copy of your credit report from any of the credit bureaus. With the process being online, it is simple and hassle free and your report (together with the score) will be made available you upon payment of a nominal fee. Once you have received the report, do go through it at length and check for any incorrect or inaccurate information therein. Every error in the report can cost you – you score can take an instant nosedive – and hence it is of utmost importance to ensure accuracy of information.

If you do have information that requires modification/ updating, do contact the concerned bureau at the earliest and request for it to be rectified. This will ensure that your score goes up, as your data is now maintained correctly.

Of course, the above does not apply in case you have unpaid loan EMIs or credit card payments against your credit report. In such instances, the only thing to do would be to make payments towards any outstanding debt and once cleared, request for the data to be updated with the newest information.

In addition to this, plan and budget your spends, and do not tack everything on to your credit card when out shopping. Further, do not utilise your credit card limit to the max, an ideal credit utilisation ratio across all your cards does not exceed 30 percent of the total card limit.

This will help you going forward as well, in making sure your card complements your lifestyle and does not entirely sustain it.

A credit health management company can also help, by assigning you a trained credit counsellor who will work with you to improve credit score over a period of time. While the task may seem challenging and uphill, it is not entirely impossible and with time, patience and financial discipline it is indeed something that is achievable. Credit Sudhaar, India’s premier credit health management company is one such organisation that you could approach.

The bottom line

A large part of your financial future depends upon your credit health so it is never too late to know more about your credit score and if it warrants attention, to do so before it is too late.

CIBIL is keeping an eye right from your first credit card

Have you ever wondered as to who keeps a watch on your financial dealings when it comes to having availed of credit, be it a loan or a credit card?  Do you have a credit bureau watching you, or is it the lender or both? Here is a brief insight into the world of credit health.

Tell me more about CIBIL and credit bureaus

CIBIL is India’s oldest credit information company, or credit bureau, that has been licensed to operate by the Reserve Bank of India (RBI). CIBIL was incorporated in 2001 and has been providing credit bureau services since 2003 for banks in India. A credit bureau generates credit information reports that provide a wealth of information regarding an individual’s credit history, both past as well as ongoing. These credit reports are summarised by credit scores, which typically range between 300 and 900. A high credit score indicates better repayment behaviour and satisfactory credit hunger of the consumer.

In addition to CIBIL, there are three more credit bureaus, namely Equifax Credit Information Services, Experian Credit Information Company of India and CRIF High Mark Credit Information Services. These bureaus were granted licenses in 2010 and since then have been working closely with banks and financial institutions to fill in gaps that were present in the market at the time when there was only one credit bureau.

These bureaus also have expanded the data coverage and introduced specialised segments such as microfinance (MFI) loans. This data is also now available with the credit bureaus in addition to the commercial loans and consumer loans data traditionally available with the bureaus. There is a mortgage check repository also and a separate database for fraud checks; bureaus have also been working to get more and more data into their databases and like in some other countries with time telecom and insurance data may also come to credit bureaus in India. This will greatly help a lender establish whether they want to extend a fresh line of credit or not. For example, if a borrower features in a fraud report, the next lender they approach for credit of any kind is likely to decline the application.

Credit bureaus and the RBI

As per the Credit Information Companies Regulation Act, 2005 (CICRA) the RBI is the regulator for credit bureaus and over the years has brought in several robust guidelines and policies to monitor bureaus. As per the latest guidelines, lenders are required to submit data to all bureaus. This means that every bank or financial institution is required to become a member with each of the bureaus present today. This is a significant move to ensure that credit history and repayment behaviour of all types of borrowing is available with all the bureaus.

Apart from bureau data, the RBI also requires credit bureaus to share a list of wilful defaulters, and this data is published on the RBI website.

What does a credit bureau check?

A credit bureau maintains the credit history of a borrower, detailing in its reports the repayment track record of a borrower. When you approach a lender for a loan or apply for a credit card, the first thing the lender does it to pull a copy of your credit report, which helps them gauge both the willingness and ability of a borrower to repay any outstanding debt.

Bureaus however do not make any changes or modify this data either in entirety or in part. They merely put together the data received from their member institutions, i.e. banks and other financial institutions. Essentially, bureaus don’t track individuals they only maintain and organise the data submitted by lending institutions.

Hence, from the time that you obtain your first credit card and right up to your existing home loan, for example, the lender(s) you have borrowed from will be the entities that monitor you closely, and not CIBIL or any other credit bureau. This monitoring is translated into your credit health, which needs to be maintained as you would your physical well being.

How does one track the credit score?

The first thing to do is to call for a copy of your credit report from either one or all bureaus. Once you receive the same do go through it at length and also check the score. If you think the score is not on par or you need help to improve credit score, consider availing of the services of a credit health management company. In tandem with trained credit counsellors you will be able to restore your credit score and even enhance it over time.

Therefore be it your first credit card or current home loan, make sure you maintain credit health.


Dummies Guide to the CIBIL Defaulter List

CIBIL defaulter list

Being credit healthy is the key to an individual’s financial fitness and in today’s times is an important aspect that cannot be overlooked. Whenever you apply for a loan or credit card, the first piece of information that a lender considers is your credit score, an integral part of your credit report. Not just restricted to loans any more, globally credit scores are used by telecom and insurance companies to evaluate prospective customers as well as employers as part of the hiring process. Landlords too factor in the credit score when deciding whether to rent out property to an individual.

What is a credit score? Does it differ from a CIBIL score?

A three-digit indicator ranging between 300 and 900, a credit score tells a lender about an individual’s creditworthiness, and whether lending to a person would be risky. Higher your score better are the chances of your loan or credit card application being approved. A credit score is generated by a credit information company, or credit bureau, based on the information provided by its members (banks and financial institutions).

In India, there are 4 credit bureaus licensed to operate by the Reserve Bank of India, namely CIBIL, Equifax, Experian and CRIF High Mark. Of these,the oldest bureau of them is CIBIL and hence credit scores are often called CIBIL score colloquially. However, all bureaus generate scores, and you can avail of a report from any or all of these bureaus.

What is a CIBIL defaulter list?

When a person defaults on a loan, i.e. fails to make payments towards EMI or does not pay off credit card outstanding, it eventually becomes a payment default. Categorised into buckets, a lender will take increasing action as the number of days past due also increase.

When an individual defaults, the lender puts them into a loan defaulter list, which may then make it difficult to avail of credit subsequently. These lists are often shared with other financial institutions as well.

However, CIBIL itself does not maintain a loan defaulter list. This is because CIBIL does not generate the information in the CIBIL report itself, it is based on what its members i.e. lenders provide. Hence, CIBIL will neither modify information in the report of its own accord, nor classify any customer as a defaulter.

If you wish to get your name struck off from the lender’s loan defaulter list, consider getting in touch with the lender and working out a suitable repayment solution. What you would then need to do is contact the concerned credit bureau (where the data has been reported) and file a dispute.

How do you raise a CIBIL dispute?

The first step would be to call for a copy of your CIBIL report, at a nominal fee. With a quick and hassle-free process, your credit report would be delivered to you within a short time span. Once you have the report, go through it at length and check for any discrepancies. Remember, every small error in your credit report can have a negative impact on your score; hence it is imperative to ensure that all the data contained in the report is accurate.

There can be various types of inaccuracies in a report, for example, basic information such as your name or date of birth could be incorrect. However, what impacts your score is incorrect account information, and this requires immediate rectification. Let us assume there is a loan account on your report that you are not aware of: you could well be a victim of identity theft in this instance, wherein your personal information has been used to avail of a loan by someone else. However, any default in payment on such a loan will continue to reflect on your credit report. It is also possible that owing to an ongoing dispute with a credit card issuer, you have not made a payment as per the due date. However, even after settlement of dues it is possible that the credit report shows a skipped payment, as the records have not been updated.

How is a CIBIL dispute resolved?

When you identify an error in your report, contact the credit bureau at once. With easy to access online dispute redressal mechanisms, it is easy to initiate the process. Of course, do remember to have concrete proof – such as a payment acknowledgement from the lender – when you file a dispute. CIBIL will then take this up with the concerned lender, and depending upon the lender’s decision (whether to accept or reject the dispute), corrected data will be sent back to CIBIL. This entire process can take up to 30 days, depending upon the time taken by the lender to revert to CIBIL.

In conclusion

Seeing the necessity of maintaining a clean and good credit history, you should check your report at regular intervals and ensure that there is no incorrect information therein. Else, do make sure that you raise a dispute and have the same rectified, in order to be able to avail of the best credit solutions when you actually do require them.