Will My Job Hurt My Credit Score?

Money is an important aspect of life. You almost need money to complete every task in life. Where do you get the money from? That’s right, by doing a job. A good job can determine what you do, where you stay, what you wear and how your lifestyle can be. Your job can impact you in lot of ways both directly and indirectly.

Will it impact your credit score? Absolutely not! Your jobs, the designation, take home salary, bonuses, etc. does not get reflected in your credit report. This does not mean your salary does not have power on your loan buying process. For example, you are applying for a credit card; the lender will ask you for your annual salary to set a credit limit on your card. This way your job indirectly contributes when you apply for a financial product or a credit line.

So what exactly may hurt my credit score?

Payment history, debt levels, age of credit, types of accounts and inquiries on your credit report are the five main factors which contribute to your cibil score. Your employment status, your incomes and gains are never reported to the bureaus.

If unfortunately you lose your job for some reason, that can indirectly affect your credit score and you will end up on the loan defaulter list. Losing your job can be a saddest thing that can happen to you. You join a firm with a lot of confidence expecting your position will be intact, but when a bomb is dropped on you of unemployment, you are shattered everywhere.

Let us see how a job loss can indirectly harm your credit score,

Behind on loan EMIs and credit card payments

There is a famous proverb stating “Money brings Money”. When you happen to be in a job, there are a lot of bankers and card lenders who offer you different financial products like loans and credit cards. Though we know, they are just our want not need; even then we tend to go ahead with it. Because you have a stable job and a fat cheque, you start spending and get used to a lavish lifestyle. After losing your job, you realize that the EMIs are pending and the credit card bills are overdue and you have no money to make the payment. This will definitely result to a dip in your credit score.

Take new loans to pay your bills

Now that you know that you are in deep trouble financially after losing your job, you will opt for a new loan. A new loan will come with new terms and a new EMI, because it is an urgent requirement you may end up paying more processing charges than usual. You may also try to get in touch with your credit card vendor and ask for a limit raise. Limit raise totally depends on the sole discretion of the card lender, who will check your cibil score first and then think of giving you a limit raise.

 

Unexpected expenses

Trying to close one financial hole after another can be stressful but if in between this process something unexpected happens, like a family member needs medical attention then you are in for another problem in your life. This will result to you finding another loan to fill this gap.

A job hunt

Maintaining a good credit score is really important, even if you have lost your job. Many employers check your credit report to understand your financial capability and determine if you are job worthy. A bad credit score can cost you your next job. So no matter how bad your financial situation is, always pay all your debts on time.

You should always save money and keep some amount as reserve for unexpected events in life. Even if you lose your job, the reserve money can help you keep going for at least till the time you find another job. Spend less, always focus on what you need rather than what you want, this will definitely help you in long run to save money and live in financial harmony.

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How Will Identity Theft Affect My Credit Score

Sneha, a well-settled entrepreneur, at 31 is well settled in Pune. She owns a house, two cars and few properties. These are solely her properties. She stays with a small family of 3, She, her Husband and a Daughter. She has put in a lot of efforts, in building the empire of her business and the properties she owes. She is a regular checker of her credit score and has made no defaults of any loan she had taken or any loan she has today. She has never made any late payments of any of the credit cards she peruses. Her credit score and credit report, both are in place.

A free CIBIL report is given every year by the bureau as per RBI regulations and she has taken well advantage of it. Now, she is planning for a business expansion. She goes to a bank and applies for a business loan. She is very well aware that a business loan is the unsecured – installment based loan. But with the past records and the payment history she has maintained, she is confident enough that her loan will get approved. While the finalization of the process, her loan was rejected. As she is a very old client, the bank manager explained to her that there is the cibil score goof up, and it has gone tremendously down in last 3 months. With looking in details, they came to a conclusion that it was a case of identity theft.

Let’s understand in detail, that what is identity theft. In this digital ear, everything is available online. There a few people who can hack into your systems and fetch the important and very sensitive and confidential data which then they use to make the theft. So, they will use your name, number, credit cards, aadahar card number and take a credit. Or the may make many multiple online transactions using this. Not only the hackers can do that, but if by mistake you have shared your confidential information somewhere, and it was meant to be destroyd but was not destroyed by any of the reason, some very over smart individual, will steal your identity and make the use of it.

What happens in such cases? When any of this occurs, it becomes an identity theft where the credit transaction is done from your account but not by you. You come to know about it when either you check your credit report in detail by yourself or if you have applied for a credit and it got rejected due to this reason. Let us now see, how can identity theft affect the credit score.

  1. Sudden dip in score

If in the month of May you checked your free cibil score, and it was 783. now just as an example mentioned above, you applied for some loan and it got rejected. Now when you investigate, you came to know that your score is 620. There is the sudden dip of 163 points in your score. While seeing the report minutely, you come to know that there are many transactions which are not made by you and a few credits which you have not applied for! Terror number one.

  1. Rejections in loans or credit cards.

As there is a sudden dip in the score, the credits or the loans you must have applied for, which are in pipeline will get rejected.

  1. Longer run effects

The negative flags, stay on your report for much longer time. Nearly a decade. Now, since you have not made payment by yourself, why would you pay the same? Makes sense, so in those cases, you would need to raise the dispute so that it can get off your report in the meanwhile.

  1. Fear always

Since once this has happened, you will always be scared to share your confidential information even to those whom you would actually have to share in case of taking credits or any important things.

Always make sure while applying for credit cards or any loans, do not share each and every detail with everyone. Also, whenever you share the important documents write the propose of in on the photo copied document in order to not get it stolen. While sending these details, be cautious. If possible send it in encrypted form or try not sending it online. Stay alert and stay accurate & updated. Do not neglect thing which can affect your score!

How to Make a Good Credit Score Even Better?

We live in a time where having a good score is crucial for financial security and a comfortable life. However, the question is- what exactly is a good score?

Generally speaking, if your CIBIL score is below 600 then it’s considered a low CIBIL score, and if it’s above 750, then it’s considered a good score. But here is the thing- you should never be happy with your score.

It should be one of your continuing goals to improve credit score even if it’s good enough. This is because if you stop caring, your score can drop over time and become a “poor score” one day without you even knowing. In addition to that, working towards the best possible score ensures that when you need a loan or a credit card, then you are able to obtain them without any problem and at attractive terms and interest rates.

How do you make a good score better?

There are many things that you can do to take your score from “good” to “great”, such as:

Don’t Break the Streak

Since you don’t have a low CIBIL score, it means that you have been paying all your loan EMIs, insurance premiums, and credit card bills on time. So, if you want to increase your score, even more, it’s important that you never break this habit. In fact, you should do whatever it takes to never miss a single payment.

Your repayment history is one of the biggest factors to affect the credit score. In some credit rating agencies, it can make for as much as 30% to 40% of your entire score! Thus, the only way to improve credit score on a constant basis is to be punctual with your payments at all times.

Create a Healthy Credit Mix

Did you know that by simply increasing the variety of credit in your report you can easily increase your credit score by 10% to 20% or even more?

A lot of people are able to push their score only to a limit because their credit report is based on just one type of loan or credit card only. So, if this is the case with you as well, then you can add new credit profiles to your portfolio and see the magic happen! For instance, if your experience with credit in life is only on the basis a personal loan, then you can apply for a credit card or a car loan. You are sure to notice a major improvement in a short period!

Develop a Habit of Frequent Report Checking

If you can’t remember when the last time you checked your credit report was, then it’s something to worry about.

Monitoring your credit report is extremely important when you want to increase your CIBIL or credit score as much as possible. This is because it helps you track your progress and alerts you when or if your score starts to drop.

Checking your CIBIL report frequently also helps you prevent identity thefts and other frauds that can rob you of your savings and even greatly harm your credit profile as well.

Put an End to Your Credit Card Debt

If you love to use credit cards but make minimum payments more often than not, then it’s possible that you have a huge debt on your card(s) which is really bad for your score.

Although technically you are allowed to make minimum payments to avoid penalties and other kinds of charges on your credit card bills, from your credit score’s point of view, it’s bad. In fact, if you apply for a new loan then it’s quite possible that the lender will reject your loan application even if your score is high because of your high debt.

When it comes to credit score, it’s important to remember that you must not rest on your laurels once you have secured a good position. You must always pay attention to your finances to ensure that your score not only stays high but also makes an improvement over time as well.

How lenders estimate credit for mortgage loan requests?

Are you facing a financial crunch? Are you in need of urgent funding? You may approach a bank with a mortgage loan request.

Financial crisis is a very common problem. Your existing property can however take care of your crisis. A mortgage loan helps you to raise funds to meet financial shortage. This is a Secured Loan in which you keep your immovable property (home) as a deposit and take money from the lender. The borrower needs to repay the loan via regular monthly installments within a particular period of time.

But before you do that, you must know how lenders estimate credit for mortgage loan requests.

Mortgage Loan Eligibility   

Both salaried as well as self-Employed individuals can apply for a Mortgage Loan.

To avail a mortgage credit, you need to carry out certain minimum eligibility conditions. The following are some of the factors considered by the lenders while determining your eligibility for a mortgage loan:

  • Minimum age: You should be minimum of 21 years of age at the time of the loan application.
  • Annual income: What income is required to qualify for a mortgage loan depends on the lender.
  • Existing liabilities (if any): Your monthly liabilities are taken into consideration (say living expenses, other EMIs and bills)
  • The valuation of your property (to be mortgaged): The lender generally approves 80% of the registered value of your property as the loan.
  • Number of dependents: If you are responsible for the livelihood or upkeep of some members in the family; they are your dependents (spouse, kids, and parents).
  • Total work experience and stability in current job: How long you have been in the current organization or business, your qualification definitely play a vital role in assessing your loan eligibility. Lenders prefer stability of job and prefer those who are employed for at least two years.
  • Proper financial documents: You should have proper and relevant financial documents (pay slips, ITR, bank statements) to avail the loan.

Basically after gathering information about your income and debts the lender assesses your credit profile. They determine how much you could afford to borrow. Before prequalifying, they adjudge your ability and willingness to repay the loan.

For ability check, the emphasis is put on your income and job stability. However to check willingness to repay they would ask you the purpose of property use. They would check your credit report to closely study your previous history of meeting any such commitments.

Your credit report speaks volumes about your credit repayment history. Looking into your report if the lender finds the report is plagued with derogatory remarks and red flags, it might reject the loan application. The red flags indicate that you didn’t make timely payment of loans in the past or settled with the bank (that is again did not pay in full). In case there is any delinquency, then a valid reason for the same has to be given with proper evidences. All in all, low CIBIL score literally could scupper your mortgage application.

You are usually entitled to get a Loan Against Property (LAP) up to 80% of the registered value depending on your repayment capacity. It is important to keep in mind that every bank has its own set policy to evaluate your property and assess the borrower’s eligibility to repay the loan.

If you have a good monthly in-hand and you are not servicing any other loan, you are eligible to get 60 times your monthly net income as a loan. However if you seek bigger amount you can use home equity to raise the funds.

So whether you are looking for additional funds to meet educational expenses, marriage expenses, medical expenses or even business reasons you need not worry! If you have a property in your name you can use LAP from any of the banks such as HDFC home loan and meet the financial obligations.

It is important to understand here that there are no fixed rules to estimate the eligibility for mortgage. Each lender would consider an application on individual basis.

Being a borrower however you should do a proper homework and know the amount of loan you seek. You should negotiate as much as possible on loan duration and rate of interest. You should ask the lender if there are any prepayment charges. With a home equity at stake you should not leave any stone unturned to ensure the affordability of the loan.

How Can a Free Credit Report Help Indian Credit Users?

Are you planning to get a loan? If your answer is “yes”, then maybe you should take a look at your credit report first. You will be surprised to know how many loans get rejected on the account of a poor credit score.

There are countless Indian citizens who use credit cards, or have a loan under their name, but few realize the importance of their credit rating, which is affected by their credit behaviour. The following are the major credit bureaus of India that provide standard credit reports to the banks for consideration. If you have ever applied for a loan or a credit card, then be sure that your bank obtained your credit report from one of the following credit bureaus:

  1. Credit Information Bureau India Limited(CIBIL)

CIBIL is the most popular credit bureaus of India that the majority of lending institutions are associated with. It was the first credit bureau of India, and had recently partnered with TransUnion, which itself is one of the world’s most reputed credit rating and analytics companies.

CIBIL works along with TransUnion to provide credit reports of Indian citizens to private and government banks, along with other NBFCs. A CIBIL score ranges from 300-900, and is based on your credit usage, and repayment history.

  1. CRIF High Mark

CRIF High Mark is another highly recognized credit bureau of India that calculates credit score on the scale of 300-900, just like CIBIL. While the company is one of the top finance companies in the continental Europe, in India also the company has quite a reputation for its credit calculation and analytics standards.

You can obtain your CRIF High Mark score online for a modest fee.

  1. Equifax

Equifax is a US-based company that specializes in solutions for consumer, commercial, and workforce domains. In India the company works under the name ECIS, which stands for Equifax Credit Information Services Private Limited. It was renamed as the company collaborated with other financial institutions, namely Religare Finvest Limited, Sundaram Finance Limited, Union Bank of India, etc.  Just like other credit bureaus, you can get a copy of your credit report from ECIS online.

  1. Experian

Experian India is a fully owned subsidiary of Dublin, an Ireland-based Experian LLC, and operates as Experian Credit Information Company of India Private Limited. One of the reasons why Experian stands out from other credit information companies, is its proprietary statistical algorithm. This is why your credit score provided by Experian could be quite different than the one provided by other credit bureaus.

All the four major credit bureaus of India charge a certain fee for providing your credit report. However, there is a thing called “free credit report India” too. There are several websites that can calculate your approximate credit score by analyzing your payment history, credit usage, and some other factors that affect your score. While this leaves some room for error, you can certainly get a general idea of where you stand with your creditworthiness.

Here are a few ways a free credit report can be helpful to you:

  • Credit Health: A free credit report allows you to understand your credit health in a simple manner. The standard credit report can be quite complex for an average person to understand, but free credit report is simple and intuitive. Without going into unnecessary details it simply highlights what’s relevant to you.
  • Analytics: With a free credit report you can track your payment history, and your current stand with loan and credit card debt. Using it you can manage your payments accordingly. You can also check the score variation by month, and pinpoint the weak areas thus.
  • Credit monitoring: Of course, one of the best advantages of using free credit report is that you can use it to monitor your score easily. Before apply for a loan or a credit card you can check your report first, and if your score is low, then you can improve it first. With a high score your loan approval chance increases greatly.

If you are looking for an easy-to-understand yet premium free credit report tool, then simply fill out the form at freescoreindia. It offers an almost-accurate credit report which you can refer to if you don’t want to pay for the standard report, or just want something simpler.

Why is it Important to Monitor Your Free Credit Reports?

How would you feel if you want a home loan for your dream house but no bank would approve your loan application? Not very good, isn’t it? That’s exactly how Mr. Sindhu was feeling as he was becoming frustrated with the rejected loan applications that he had submitted to various banks.  After a few of his initial applications were rejected he thought he needs to try harder, and he sent many more applications to other banks simultaneously. However, contrary to what he expected none of the applications was approved. He was clueless, unsure of what to do. Fortunately, when he talked to his friend about the problem he, his friend, advised him to get a free cibil report online and analyze the same. He took his advice and got his copy of free credit report India. To his dismay he found that his friend was indeed right as he noticed that his CIBIL score was quite low.

A large number of people are so caught up with their lives that they hardly get time for paying attention to their CIBIL report. However, when a time comes when they need a loan they realize that their negligence has caused their score to suffer and so they face tremendous trouble in getting their application approved.

If you will talk to any credit management expert they will undoubtedly emphasize on the importance of credit report monitoring. Not only monitoring of credit report is a smart habit it has a number of advantages too. Here are some of the best advantages of monitoring your credit report-

1) Maintaining High Credit Score

One of the primary advantages of monitoring credit report is easy maintenance of high credit score. By regularly monitoring your report you can detect problems that are lowering your score early and fix them before a lot of damage takes place. This way you can keep up a decent score without working too much.

2) Identity Theft Prevention

One of the best ways you can prevent yourself from an Identity theft is by monitoring your credit report. By checking your credit report every once in a while you can notice the signs of identity theft. For instance, if you find unknown names, account numbers, or unfamiliar transactions in your report you could be victim of identity theft.  You can immediately contact your bank and file an FIR to prevent any further damage. On the other hand, if you don’t have the habit of checking your report frequently you could become a victim of identity theft and not even know it. By the time you come to know about the situation it could be too late.

3) Detecting Inaccuracies- One of the most common reasons why people get a low credit score is discrepancies in their report. Wrong or inaccurate information sent by your bank could easily cut a huge chunk of score from your report. By developing a habit of frequent credit report monitoring you can detect these mistakes and have them corrected by either contacting your bank or the CIBIL authority itself.

4) Managing Finances- You can manage your finance better if you keep a track of your transactions, EMIs, and credit card payments.  Your credit report carries the information of all your recent transactions, bills, and payments, thus, allowing you to easily manage your finances. You could have your own separate file of finances but a credit report works as an excellent finance summary.

A lot can go wrong if you don’t pay attention to your credit report. Many people don’t take their credit score seriously and pay heavily for the same in future when they least expect it. Thus, it is better to detect upcoming issues sooner and nip them it the bud rather than be careless and find yourself swamped in a mess of problems later.

What’s In Your Credit Report

Your credit report contains information regarding your credit history. The report shows the kinds of credit that you use, whether or not the bills have been paid on time, status of your credit accounts, loan repayments and the duration for which your accounts have been open. A credit report gives lending institutions a full view of your credit history. Besides this, the report is used by the credit bureau to generate your credit score. Banks and other financial institutions will take credit score and report into account, along with other details, to determine if you are eligible for a loan.

 

Enquiry and account information are two important aspects of your report that are studied in great detail by financial institutions. The enquiry information contains details regarding your loan applications. If financial institutions see multiple enquiries have been made in a short period of time, they will be cautious about entering into an agreement with you. The reason being, multiple enquiries reflect a credit hungry behaviour, which is a put off for lending institutions. The account information section shows details concerning your credit facilities. It contains the name of the lending institution, account number, kinds of credit facilities, loan amount and EMI payments.

 

Besides the account information and enquiry information sections, a CIBIL report will also contain CIBIL score, personal information, contact information and employment information. CIBIL score is a three-digit number ranging from 300 to 900 and the closer the score is to 900, the better. The personal information section contains details regarding name, date of birth and identification proof such as PAN number, passport number etc. The contact information will contain the address and telephone numbers. And finally, the employment section will reveal your monthly as well as annual income.

 

Your CIBIL report will reveal a number of things about you to the financial institutions. It shows the lenders how well you manage finances, if you are financially disciplined, whether you can be trusted with repayments etc. They will determine your creditworthiness by what they see in your report.  Hence it is very essential to maintain a healthy report and a good score. If you get the opportunity to avail freebies such as free credit report India or check my CIBIL score online free, make every use of it.

 

It is important to review your report just like you do for bank statements. Get into the practice of checking the report at least two or three times a year to avoid any unnecessary surprise. By regularly checking the report, not only can you spot errors (if any) and get them corrected, you can ensure that you do not fall victim to identity theft. If you see open accounts that you had nothing to do with, bring it to the notice of the credit bureau and the respective financial institution.

 

The Credit Information Bureau of India, at the moment, does not provide free credit reports. However, according to recent news articles, the bureau will soon begin to provide individuals with one free credit report a year. They are likely to begin doing so by the end of the year, according to news reports.  The purpose behind this is to help people check their scores and raise a dispute if they spot any discrepancies.

 

While you may not be able to avail free credit report India from the credit bureau right this moment, you can check free credit report India from the website of Freescoreindia. Freescoreindia has tied up with Credit Sudhaar to provide free credit reports. I, as a client, can also check my CIBIL score online free through the company website. In order to check my CIBIL score online free, I would be required to provide basic information regarding name, email ID and contact number. The reason why I, as a client, am trying to check my CIBIL score online free also needs to be stated.

 

It is of utmost importance to check your score and report at regular intervals. Hence if you ever see the option to check free cibil report India or check my CIBIL score online free, do not let it go. Be wise and stay updated about what is in your credit records. Striving to maintain a healthy report and a score above 750 will help ensure that you have a smooth financial journey.