Rajen B. Shah, a trader, was shocked to find out that his credit card application had been rejected. He never thought this could happen to him. He was a respected man of the society and paid his taxes on time. What could go wrong? Was being an add-on card member, without using the facility on that card affecting his score? Was becoming a guarantor to someone else’s loan causing a glitch? How could he plan more effectively?
“By failing to prepare, you are preparing to fail.”
― Benjamin Franklin
This quote by Bejamin Franklin goes miles in explaining the importance of being prepared. One can never underplay the significance of planning. One should always be prepared. A little planning in the right direction will take you a long distance and planning for your CIBIL score is one such thing. If you have not planned in the past, you can begin now to improve credit score.
You CIBIL score is your entire credit history summarised and represented by a number. A CIBIL report shows your past credit record that you may have taken advantage of, like car loan, credit card, or used an overdraft facility. Your current credit score is calculated on the basis of your credit activities as shown under the ‘Accounts’ and ‘Enquiries’ section of your Credit Information Report (CIR). Your score will range between 300 and 900 wherein a score of 750 and more is generally considered good.
Your CIR will reflect your name, date of birth, contact number, PAN number, your employment history alongwith your monthly or annual income that will be reported by banks and other financial institutions to CIBIL. It also shows the details of all credit facilities used by you with several details of the lender, the amount, the type of facility etc. and is stored for atleast up to 3 years. Every time a bank or any other financial institution pulls out your report that too is recorded in your CIR under the section “Enquiries”. Do note, higher number of enquiries shall negatively affect your credit score.
Experts believe that you must check your CIBIL score atleast once a year to avoid any unanticipated shocks in future. There are several factors that may affect your credit score and you may not even realise them. For example, you are an add-on card holder. You do not use the card. You are not liable to make payments on that card. Yet, it shows up on your CIR. Although, you may not be using the card or its facilities or responsible for its payments, still a default on the primary card payment by the primary card holder will negatively affect your score as well as the score of the primary card holder. Rajen’s primary fault was that he did not plan adequately for his future credit needs.
Incase you notice that being an add-on card holder to a primary card that is riddled with default payments, then the first thing that you should do is get that card cancelled and disassociate yourself from that card. Make sure that it is reported to CIBIL and it reflects in your CIR.
You may, out of sheer goodwill, become a guarantor to a loan. A guarantor is basically someone who promises to repay the loan to the sanctioning financial institution, incase of a default payment. Thus any default payment by the primary loan applicant will affect your credit score too. It will reflect in your CIR as well.
It may happen that payments for your previous loan accounts or credit cards may have been settled and those accounts may now be closed. Yet they reflect in your CIR or your name appears in the CIBIL defaulters list. It is likely that this information was not reported to CIBIL and thus it was not updated. You can raise a CIBIL dispute and ask the financial institution to send your records to CIBIL.
There are several ways to manage your score. You just need to be careful of what you do and how will it affect your credit score. You may not even realise how some of your actions may affect your credit score. Therefore before taking any financial decision, no matter how irrelevant it may seem, it is advisable to analyse how it may affect your own credit score.
We plan for a number of things every day. Make it a habit of planning for your future credit needs. Life is unpredictable for all. The need to avail credit may arise any time and then, the time to plan for it may be too short. Hence, the time to start planning is today.
Happy Credit to you
Could not find mangalore city in page to apply for cibil report, can you help me?
Good Morning Mr Hegde,
Thank you for highlighting the issue. Our IT team has been informed about the same and will add your city asap in the list. Request you to please let us know your email id or contact number to keep you posted about the same.
Alternatively, you can reach us via :
– sending email on firstname.lastname@example.org
– call us on 6788 6788
Right now my credit score is 525 and I had 4 credit cards in 2008 and defaulted on all the cards because of no job and other responsibilities.
I know it was my fault so now I want to improve my score how I can do that??
If I do not pay or settle those card payments how long these debts will be on my account?? (Reason I still do not have that much money)
Please answer my questions and how you can help me in getting out of this?
Thanks & regards,
Good Morning Mr Sharma,
We can definitely help you to resolve your issue. Our counselor will analyze your report and prioritize the accounts which needs to be resolved at the earliest. They will also help you to manage your funds and accordingly help you to close down all your impaired accounts one by one. Not paying off the debt is no option. To clear your report you need to pay it off the bad debts and how to do that is guided by the counselor. You can get enrolled with us by visiting our website http://www.creditsudhaar.com by filling up the form online or by calling us on 6788 6788.
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