credit card

Avoid Falling into a Credit Card Debt Trap

Posted on by Credit Triangle

In the last couple of years, owing to increased awareness about credit cards and their ease of access, the credit card market in India has witnessed significant growth. Growing aspirations in terms of lifestyle and demand for credit have resulted in an increase in credit card issuances.

Though credit cards have several benefits, irresponsible usage can lead to the piling up of your credit card debt.

Ways to avoid a credit card debt trap. 

Understand the card 

Credit cards come with a range of interest rates, fees, and reward programs. Look for one that best suits your circumstances. Some of the important details to take note of are the rate of interest, grace period, membership fees, and renewal or annual fees. Take care to understand how the card works and how the interest is applied.

Can’t afford it; don’t buy 

Credit cards are not a source of free money. In fact, using a credit card is like taking a loan. A simple way to avoid card misuse is to charge only those purchases to the card, which you know you will be able to afford even at the end of the month. A mobile phone worth Rs.40,000, might look affordable in the first week of a month, but too expensive in the last week.

Learn to budget your needs and wants by creating a realistic plan of how much you can spend. Do not overuse your credit cards. Ensure that the usage on your credit card is no more than 40% of your credit limit.

Remember the due date 

Staying on track with your credit card payments is one of the best ways to avoid credit card debt. The late payment fees along with the accruing interest rate can lead you into a debt trap. Also, paying your dues on time (preferably earlier than the due date) is important in maintaining a good credit score. Any delays can impact an individual’s credit score negatively.  It is advisable, therefore, to set up timely reminders for your due dates.

Pay the full amount 

Paying your entire balance each month can help you avoid credit card debt trap. As far as possible, pay your credit card dues in full (avoid paying only the minimum amount due).

Make payments easy 

To protect yourself from damages, pay on time. But it may so happen, that you forget to pay the credit card bill on time. To avoid such instances, simply create an electronic clearing system mandate with the bank to automatically debit the credit card bill amount every month.

Credit cards can be a smart tool if used the right way, especially to ramp up a good credit score. To make the most of it, educate yourself on how each credit card works, understand the policies and try to make payments on time.

Credit Triangle is a one-stop solution for all your credit and finance needs. We help you with credit health management, repair, and improvement.

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Have a Low Credit Score? Don’t Worry, It Can Be Fixed

Posted on by Credit Triangle
CIBIL score

Credit health is a state of complete financial well-being. The absence of indebtedness merely does not mean than one is credit healthy. Credit health has several components including a good track record, a good credit score, good income-expense ratio, absence of delinquency, healthy debt burdens loads, the ability to access credit on favorable terms and a host of other parameters.

Consider the case of Rajesh Gupta, who was running from one bank to another, desperately looking for a mortgage loan. However, his loan application was rejected by all the banks. He then approached a known NBFC (non-banking financial company) for a loan and managed to get his loan approved, but at a rate that was 1.5 per cent more than what private banks were offering. On his friend’s suggestion, he approached a professional company that worked in areas of improving one’s credit health and signed up with this company. His credit score at that time was 623, which was why most private banks had refused to lend him.  The professionals at the credit repair company worked on his credit health and brought got his credit score up to 815. Now, he is going in for a loan with a MNC bank at a much lower rate.

Let’s take another case of a customer, whose credit report had a delinquent account tagged, which he claimed was not his. He did not know about this and had applied for a loan for his son’s higher education. Though he had already visited the bank and also the bureau to get it rectified, nothing happened. He then approached a professional credit health improvement company, which helped him get this account off his credit report. He is finally able to send his son abroad for higher studies.

Credit Score and its importance
An individual’s credit health is measured by a three-digit number in his/her credit report, called the credit score. A Credit Score denote an individual’s creditworthiness. In other words, it is a numerical measure of an individual’s Credit Character. Credit Scores in India range from 300 to 900 irrespective of the credit bureau from which these are generated.  A score of 750 and above is considered to be a good score.

Gaurav Wadhwani, founder, Credit Triangle, says “Credit score has relevance in almost every facet of life from loans, rates of interest on loans, telecom connections, jobs, to insurance premia, etc.”

The importance of a good credit score and credit health can hardly be over- emphasized. In spite of this, Credit score remains one of the most ignored aspects of financial health and this can have an adverse impact on one’s ability to borrow. There needs to be more awareness about credit health and credit scores.
Credit health improvement firms work towards making their customers credit healthy by restoring, enhancing and protecting their credit. Various services offered by credit repair firms include: credit health improvement and tracking (compilation of reports from all bureaus, analysis of multiple reports, error tracking and reconciliation), score improvement programs, debt reconciliation/settlement and assistance in loan processing.

On the operations front, Gaurav Wadhwani said, “Credit health improvement companies offer unique programs and guidance to assist customers in availing loans, credit cards and other credit facilities on more favorable terms through enhanced credit health.”

To resolve a customer’s credit issues, these companies first aim to interpret his/her credit reports accurately. This is followed by a process of identifying errors in the credit reports, if any, followed by a comprehensive analysis. In the final phase, these companies lay down a detailed roadmap for the customer to improve his/ her credit health. These companies handhold customers through each stage of their customized programs, till their credit issues are resolved and their credit health enhanced.

Credit score is a crucial indicator of an individual’s credit health. It is important to remove all discrepancies from your credit report in order to improve your credit health. Sensitizing people about their credit behavior and score would help them manage their finances better and improve their credit health.

Credit Triangle is a one-stop solution for all your credit and finance needs. We help you with credit health management, repair and improvement.

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Resolving a CIBIL Dispute

Posted on by Credit Triangle
CIBIL Dispute

A credit report is a comprehensive chronicle of an individual’s credit history, and hence is a good indicator of your financial health to banks and other financial institutions. Credit reports are generated by a credit bureau. The four retail credit bureaus in India are CIBIL, Equifax, Experian, and CRIF High Mark. CIBIL is the oldest, and hence very often, a credit report is understood as one from CIBIL. However, all bureaus provide similar reports, and a consumer can choose to obtain a report from any or all of them.

Identifying errors in a Credit Report

Given that a credit report plays a significant role in the loan approval process, it is essential that all the information contained therein is both accurate and updated. Any error in a credit report can adversely impact your financial plans. Hence, any incorrect or erroneous information needs to be addressed at the earliest.

Some of the errors include:

  1. Incorrect account balance – Generally, an institution submits information to a bureau on a monthly basis. If you do happen to check your report before the latest information has been reported and updated, there is a possibility that it would show up on the report as an overdue amount on the existing loan or credit card account. However, if it is over two months and the information still does not reflect – and shows the said account as overdue – a dispute can be raised, to have the same corrected.
  2. Incorrect personal information – This includes details pertaining to name, address, date of birth, PAN card, etc.
  3. Ownership – An important piece of information, this covers both personal details as well as details pertaining to the accounts (both loans and credit cards). If you find that the accounts captured in the report do not pertain to you, do flag this immediately to the concerned bureau.

If you find any inaccurate information in your credit report, you can raise a dispute with the concerned bureau. Remember, any incorrect information that stays on your record will pull down your credit score.

Raising a dispute

The credit report contains four sections – credit score, personal details, account details, and inquiries. If any of these details need to be corrected or updated, the bureau in question would be able to assist you. This, simply put, is known as a dispute.

Identity theft is a serious error that occurs when someone steals your personal information to apply for a loan or credit card. If the application does go through, and the individual who has stolen your identity is not able to repay, it will reflect on your credit report as a default. If you see enquires (for a fresh line of credit that you have not applied for) in your report, do raise a dispute immediately.

This also highlights the importance of regularly monitoring your credit report.

Dispute resolution process

This can be carried out online by following a very simple process:

  1. Fill and submit an online dispute form, with details of the information you wish to dispute and submit for correction.
  2. Based on the type of dispute, the bureau will investigate your claim and will take it up with the concerned credit institution.
  3. Upon getting a revert from the institution regarding the claim (whether valid or otherwise), the bureau will make the necessary changes after the credit institution submits the correct/ updated information.
  4. This information will now reflect in the revised credit report.

Once you have submitted your request, the bureau typically reverts within a turnaround time of 30 days. This of course may differ, subject to the time taken by the concerned financial institution to revert to the bureau.

What happens once the dispute is resolved?

Upon resolution, the bureau will share a revised credit report with you. However, if you are still dissatisfied with the resolution, you can choose to contact the concerned financial institution directly or you can also raise the dispute with the bureau again.

The errors in your credit report need to be addressed on priority, and once the dispute is resolved, it would improve your credit score.

Credit Triangle is a one-stop solution for all your credit and finance needs. We help you with credit health management, repair, and improvement.

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Think Twice Before Becoming a Guarantor to a Loan

Posted on by Credit Triangle
Credit health management service.

Credit score is a numerical measure of an individual’s credit character. It is a critical factor while availing loans and credit cards from banks and financial institutions.

 Individuals having a low credit score can face problems in getting approval from banks while applying for any kind of loan or credit card. Poor credit health could result in a loan being rejected or a higher interest rate being charged on the loan. 

Banks typically ask for a guarantor when they are not fully confident of the borrower’s ability to repay the loan or if certain eligibility criteria are not met by the borrower. A guarantor is a person who guarantees to pay for the debt, if the primary borrower defaults on the loan obligation. 

Being a guarantor is not a mere formality to help the borrower, the guarantor is equally responsible for paying off the loan. A guarantor to a loan acts as a co-signer of sorts, in that he can pledge his own assets or services if incase the principal borrower cannot perform his/her obligation.

 Let us take the example of Harish, a 27 year old youth from Delhi, earning a decent salary. Harish wanted to buy a house for his parents and was confident that his home loan application would be approved by the bank. However, he was taken by surprise, when the bank rejected his application.

 The reason for his loan rejection was that he had signed as a guarantor for one of his friends, who had defaulted on loan repayment, and this in turn lowered his credit score.

 Individuals should be careful while signing as a guarantor for a loan taken by another person, as it can have a negative effect on his/her credit health. If the primary borrower repays the loan provided by the banks and financial institutions properly, the guarantor will benefit from it as it would reflect in his credit report. On the other hand, if the primary borrower defaults on the loan, this would have a negative effect on the credit score of the guarantor. Not only this, the guarantor will be liable to pay on behalf of the primary borrower.

 An individual should become guarantor for a loan taken by his/her relative or friend, only if he/she is confident of the latter’s financial situation.  Being a guarantor on a loan entails as much risk as being a borrower of the loan and could affect your credit score negatively too. As a result, one could face problems while applying for loans and credit cards. This is exactly what happened with Harish.

 One should, therefore, be extremely careful while guaranteeing a friend’s loan. Even if the guarantor has a good repayment track, the defaults made by the primary borrower can affect the creditworthiness of the guarantor.

 Hence, one should be fully aware of the pros and cons associated being a guarantor, before helping your friend or relative in getting a loan

Credit Triangle is a one-stop solution for all your credit and finance needs. We help you with credit health management, repair and improvement.

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Rise in Cyberbullying Among Children

Posted on by Credit Triangle
Risk in cyberbullying

Children are online now more than ever. Increased availability of smart gadgets along with unmonitored access to the internet has, however, resulted in a significant rise in the number of children falling prey to cybercrime.

According to a report by McAfee Corp, over 85 per cent of Indian children reported
being cyberbullied as well as having cyberbullied someone else. Cyberbullying occurs far more often than parents think. And in many cases, children are keeping it from their parents.

Cyberbullying refers to the use of digital technologies to harass, threaten, embarrass, or target another person. It can take place on social media, messaging platforms, gaming platforms and mobile phones. It has been observed that young children or teenagers are the primary and easy targets for criminal activity.

Bullying in any form has serious repercussions. Cyberbullying, however, may be particularly damaging as it can occur at any time, day or night, and be perpetrated by anonymous sources.

Cyberbullying has damaging emotional and psychological effects. It can lead to feelings of humiliation, anger, isolation, low self-esteem, depression and anxiety. Cyber bullying in children may also lead to behavioral changes such as loss of interest in academics, use of drugs/alcohol. Being aware of the effects of cyberbullying would not only help you in supporting your child, but also make you aware of signs that may be a reason for concern.

Ways to respond to cyberbullying:

  • If your child is being cyberbullied, this needs to be reported the appropriate
    authorities (social media companies, school officials, or even the police.)
  • It is important to be aware of the laws surrounding cyberbullying.
  • Encourage your child not to respond to cyberbullying. Doing so just makes the
    situation worse.
  • Do not dismiss your child's feelings. Communicate with them daily and keep close tabs on changes in mood and behavior. Seek the help of a healthcare
    professional if you notice any changes at all. Do what you can to make them feel empowered.
  • Refrain from taking away their computer or shutting down their social media
    accounts. This can exacerbate feelings of loneliness and isolation. Instead, make your children aware about safe online habits and practices.
  • Installing effective security software with parental control on all devices can
    help parents monitor their kids’ online activities, limit screen time and ensure
    that their kids remain safe in the digital world.

Being aware of the signs and effects of cyberbullying, and following healthy internet
habits, would go a long way in ensuring a safe online life for your child.

Credit Triangle is a one-stop solution for all your credit and finance needs. We help you with credit health management, repair and improvement.

CIBIL score

Credit solutions for those without any credit history

Posted on by Credit Triangle
Credit solutions

Your credit score has a significant bearing on your financial health. It impacts your ability to get finance on the best terms, be it a car or home loan, or even a personal loan.  

What is a Credit Score?

A Credit Solution is a three-digit number that denotes an individual’s creditworthiness. The credit bureaus use the detailed credit history in your credit report to determine your credit score. It ranges from 300 to 900. When a lender evaluates your credit application, they rely on this information to make a decision. A higher score typically results in better terms of credit.

Unfortunately, having a low CIBIL score is not out of the ordinary, but with some effort, you can turn your credit score around and ensure that your financial future remains secure. 

At the other end of this spectrum are people who do not have any credit history, which also puts them in a similarly difficult position to get a loan or card at competitive interest rates. 

Building credit history

If you are new to using credit or currently have a low score owing to shaky credit history, don’t worry, it’s not time to hit the panic button yet. With some diligence and monitoring, you too can achieve and maintain a good credit score. 

Ways to help you build a solid credit history:

  • Check your credit report – The first step to get you started is to call for a copy of your credit report from a credit bureau. Go through your report carefully to ensure that all the data mentioned therein is accurate. If you notice any errors, bring them to the attention of the concerned bureau immediately. This will not only ensure that your credit history is accurate but will also protect you against identity theft.
  • Apply for a credit card – When you don’t have any credit history to build on, the best way to begin, is to get yourself a credit card. However, ensure that you make payments in a timely manner and ideally in full so that this card starts to reflect positively on your credit report.
  • Apply for a secured credit card – It’s possible that a credit card issuer may be unwilling to issue a card to a first-time user without any prior credit history. In such an instance, it is possible to approach your bank for a secure credit card, which is typically issued against collateral such as a fixed deposit. The limit on such cards will be capped at a certain deposit percentage if you have no or a low CIBIL score. This is a good way to build a robust credit score over time.
  • Apply for an add-on credit card – If the above two solutions are not feasible, you could consider requesting a family member (parent, sibling, or spouse) to apply for an add-on credit card. With this card in your name, you will build a score. Do keep in mind that your financial habits will reflect on the credit report of the primary cardholder, and vice versa.
  • Apply for a consumer loan – Another way to obtain a credit score without any previous history is to opt for a small ticket consumer loan, to purchase any white goods such as a microwave oven or even a mobile phone. Make sure you repay EMIs in a timely manner. 

Tips for good credit behaviour

Sometimes, it takes credit to build a credit history. Become financially responsible and display good credit behaviour in order to be able to get finance when you need it the most. With good financial habits, your credit history gets a solid foundation and you can get further credit with relative ease.

Once you have established a credit history, it is crucial to monitor your credit score regularly. Making all your payments in a timely manner and in full is a good habit that helps in maintaining a robust credit score in the long run.

With the above tips and tricks, get started on your healthy credit journey today!

Credit Triangle is a one-stop solution for all your credit and finance needs. We help you with credit health management, repair, and improvement.