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  • WHY DOES A HIGH CIBIL SCORE NOT GUARANTEE A LOAN OR CREDIT CARD?

    WHY DOES A HIGH CIBIL SCORE NOT GUARANTEE A LOAN OR CREDIT CARD?

    Understanding Credit Behavior: Beyond the CIBIL Score

    One of the biggest myths about a High CIBIL Score is that it guarantees instant loan or credit card approval. However, sometimes even if you have a high credit score, it won’t guarantee approval. This is largely due to your credit behavior. Credit refusal relies not only on your CIBIL score but also on your entire credit history. Therefore, it is important to understand your credit behavior as a potential borrower.

    SIGNIFICANCE OF CREDIT BEHAVIOR

    A credit score is a complex topic because it is derived from various factors that reflect the borrower’s behavior. Credit behaviorally, pay debts and EMIs on time, and banks will mark you as a potential customer who deserves it. It is all about how you handle borrowed money. If you pay all debts and EMIs on time, banks consider you a potential customer with good credit. If you keep delaying payments, financial institutions will mark this as bad credit behavior. While many look for a credit report fixing service to address technical errors, maintaining consistent debt payments is the only way to ensure a high CIBIL score remains “good.”

    CREDIT UTILIZATION AND CREDIT BEHAVIOR

    Credit utilization implies the amount of credit you have utilized as expenses in accordance with your credit card balance or limit. It additionally considers the current credit limit that is being utilized. For instance, on the off chance that your balance is ₹300 and your credit limit is ₹1,000, at that point your credit usage for that credit card is 30%. It is prudent to keep your credit use proportion under 30%. The credit score can be drastically affected if you have the tendency of using more than 30 percent of your credit limit.

    Let us assume that your CIBIL score was 800 six months ago but because of your propensity for excessive credit use, it has dropped to 750. If your report shows high utilization despite low balances, consulting credit report repair services can help identify if your limits are being reported correctly.We are all aware that banks and financial institutions require a minimum score of 750 to offer an extended credit line. For the bank, excessive credit use is lucrative, as more money flows out faster than it flows back into the system. This is viewed as one of the parameters of bad credit behavior, and consequently, your loan application is probably going to be rejected.

    Even with a score of 750, excessive use of credit is viewed as a parameter of bad credit behavior, and your application is likely to be rejected. If your report shows high utilization despite low balances, consulting credit report repair services can help identify if your limits are being reported correctly.

    NON-PERFORMING ASSETS (NPAS)

    A Non-Performing Asset (NPA) refers to a loan or advance for which the repayment was not made after the due date of 90 days. It is actually considered to be a bad debt in terms of regularly scheduled payments. For example, if a company with a loan of approximately 10 million with interest-only payments of 50,000 per month fails to make a payment for three consecutive months, then the bank will identify that company’s loan as non-performing in accordance with its guidelines. A loan may also be known as non-performing if a company makes all interest payments but is unable to repay the principal on maturity.

    In recent researches, it came into spotlight that NPAs across India stand at ₹100 Millions. This is exceptionally perilous for the monetary strength of our nation and has consumed a piece of India’s GDP. Hence, banks are under a great deal of pressure from the RBI to control the rising NPAs. So, banks are bound to dismiss a loan or credit card application if the borrower has a bad credit behavior. Therefore, banks are concentrating more on credit behavior and credit score before approving loans or credit cards of an individuals or companies.

    WHAT IF YOUR LOAN GETS REJECTED DESPITE HIGH CIBIL SCORE?

    If your application is denied despite a good score, raise the issue with the concerned bank immediately. They will provide the exact reason, which may help you find what is wrong with your behavior. To ensure your data is accurate, you may want to check with a registered credit report agency in india to verify that no closed accounts are still showing as active or overdue.

    WHAT ARE THE WAYS TO IMPROVE YOUR CREDIT BEHAVIOR?

    Although there are many ways to enhance your credit score, likewise there are many steps to follow for the improvement of your credit behavior.

    1. ALWAYS MONITOR YOUR ACCOUNT HISTORY

    Once you’ve got your credit report, look for payment accounts due. Make sure you pay the full amount outstanding on or before the due date on each of your accounts.

    2. MAINTAIN OPTIMAL CREDIT UTILIZATION

    Keep the credit usage level at 30%. For instance, if you have a credit card or a store account with a limit of 1 000, try to keep the balance amount below 350

    3. IDENTIFY ERRORS AND RESOLVE THEM INSTANTLY

    Look for any errors and false information in your credit report and take active steps to pay all of your outstanding debts so that you can remove this information from your credit report. It’s better to contact CIBIL repair agency for resolving these types of misleading errors.

    4. FOCUS ON A CREDIT MIX

    Maintain a healthy mix of both secured and unsecured loans. That will set up a strong financial history. Ultimately, banks can recognize that you’re willing to repay the loans irrespective of loan types.

    Frequently Asked Questions (FAQs)

    1. Why was my loan rejected even though my CIBIL score is above 750?

    A high score is only one part of the approval process. Banks also look at your “Credit Behavior,” which includes your debt-to-income ratio, recent credit inquiries, and whether you have been a guarantor for a defaulted loan.

    2. Can a credit report fixing service delete legitimate negative marks?

    No. A legitimate credit report fixing service can only help you identify and dispute inaccuracies, errors, or outdated information. They cannot remove factual records of late payments or defaults.

    3. What is the role of a credit report agency in India?

    Agencies like CIBIL, Equifax, and Experian collect and maintain credit records of individuals provided by banks. They do not decide on loan approvals; they provide the data that banks use to make those decisions.

    4. How long does it take for credit report repair services to show results?

    Once a dispute is filed regarding an error, the credit bureau typically has 30 days to investigate and update the record. Total improvement in a score usually takes 3 to 6 months of consistent behavior.

    5. Does high credit card usage count as bad credit behavior?

    Yes. Even if you pay your bill in full every month, consistently using more than 30% of your limit suggests “credit hunger,” which can lower your score and signal risk to lenders.

    6. Is a “Settled” status the same as a “Closed” status on a credit report?

    No. “Closed” means the loan was paid in full. “Settled” means the lender agreed to accept less than the full amount due. A “Settled” status can negatively impact your credit behavior profile for years.

  • 7 MOST COMMON B2B DEBT COLLECTION MISTAKES

    7 MOST COMMON B2B DEBT COLLECTION MISTAKES

    While running a business, collecting the past due payments from your business customers can be one of the most daunting aspects. Here’s a simple fact: It’s easy to make a mistake when engaging in debt collection for companies that aren’t specialized in debt recovery. In fact, the debt recovery industry is so mired in regulation that the likelihood of making a mistake is quite high.

    If you are building your credit program, you may not be familiar with some common errors or mistakes that business owners make while collecting past due accounts.

    Here is the list of some common mistakes that may encounter while collecting b2b debts from your customers.

    1. UNAWARE OF THE EXPENSES THAT ARE INCURRED IN DEBT RECOVERY

    Before you focus on an initiative to recover your business client’s past due receivables, it is important to evaluate the costs that are imposed in debt recovery process and so, that you can know whether your collection efforts are going to be justified or not. During such circumstances, a collection agency will help you determine what those expenses are.

    2. HARASSING THE CUSTOMER UNINTENTIONALLY

    There are several laws that companies need to obey while seeking to get back their client’s debt. Such rules prohibit a debtor from intimidating or harassing a customer while attempting to recover a debt. Excessively persistent or forceful demands may constitute harassment which is contrary to the rules on debt collection. These conduct sanctions include punitive damages, or even litigation. Before dealing with debt collection, you need to make sure that you are aware of the debt collection laws in your area to avoid such penalties.

    3. NO CREDIT POLICY

    In general very few businesses have a credit policy which holds a potential impact while recovery of debts. A credit policy identifies low, medium or high risk clients. This segmentation will help you set guidelines on credit limits and help organize collections. If you don’t have a good credit policy, you could end up extending credit without taking precautions to everyone. That can leave you with a lot of unpaid debt from past due invoices.

    4. OUTDATED CLIENT RECORDS

    Unlike outdated client records, updated client records allow you to detect the raise of potential debt issues. It allows you to take control of a debt issue, rather than the debt that controls your business. We all know about seemingly prosperous firms that just went bankrupt because they didn’t have enough cash to keep doing business. If you allow bad debtors to dominate your corporation, you’ll probably follow the same path. The most useful resource when it comes to managing a business is an actual client record. It will help you monitor customer behaviour and curb debt problems before they are going to happen.

    5. IRREGULAR FOLLOW-UPS

    A clear follow-up strategy helps you get paid more quickly and avoid bad debts. Additionally, prompt collection of past due accounts will help you maintain a healthy cash flow. A good follow-up system includes getting in touch with debtors on time, setting credit limits, credit checks and implementing a good credit policy. Hence, following through on any past due balances is essential to increase your chances of debt recovery promptly and consistently.

    FAILING TO COMMUNICATE ON A DAILY BASIS

    Lack of timely and regular communication with debtors will leave you with huge sums of unpaid debts. It’s important to always note that communication is a key to the relationship between debtor and creditor. Companies that use only one or two methods like sending emails and letters to reach a past due clients aren’t going to be reliably imaginative enough to get the job done. A telephone call is surely one of the best channels of communication, and it becomes even more difficult to ignore someone when they speak directly to you.

    WAITING TOO LONG TO HIRE A COMMERCIAL B2B DEBT COLLECTION AGENCY

    Most businesses are too patient when it comes to debt collection, and wait too long before contacting a commercial debt collection agency. The main reason behind this phenomenon is the fact that their account receivables do not set the payment deadlines. It is prudent to be rather impatient when it comes to debt collection. Waiting longer to employ a debt collection agency to recover your past debts is one of the most common mistakes that companies make when they try to collect past debts.

    It can be challenging to receive payments on time. When trying to recover your past due debts, one of the best things to do for your company is to hire a commercial b2b collection agency as soon as your client is already 90 days late in paying your invoice. At Kenstone Capital, We help you cultivate and retain positive working relationships with your customers by providing our clients with non-contentious solutions through our amicable debt collection services. We specialize in helping businesses to collect their past due receivables. Call or email us for a free consultation and get a free price quote!

  • HOW TO BOUNCE BACK FROM A LOW CIBIL SCORE?

    HOW TO BOUNCE BACK FROM A LOW CIBIL SCORE?

    It is no more difficult to bounce back from bad credit if you are keen to follow the right steps to set up yourself for financial success by paying off left debt. Although there are many reasons for a Low CIBIL score, likewise there are many ways to rebuild your credit score but which may take time and requires focus on the basics. Enjoy yourself with the lord of ocean.

    HERE ARE THE FEW STEPS TO FOLLOW TO RECOVER FROM LOW CIBIL SCORE:

    1. CHECK YOUR CIBIL SCORE AND REVIEW IT REGULARLY

    Before we get into the tricks and tips, it’s important to check your CIBIL report regularly as it helps you to fix the credit score whenever you notice any inaccuracies in the form of defaults or delays in payments. So, that you can always contact the bank and can set right your CIBIL. This will ultimately helps you in increasing the credit exposure.

    2. MAKE THE PAYMENTS ALWAYS ON TIME

    Being late for credit card and loan payments is always the primary reason for a bad credit score, as it is 35% worth of your total. Make it as a top priority to pay off all unpaid debts as soon as you can overcome your personal crisis. If you have various credit cards and personal loan accounts, merge all these loans and take out a single loan to make them pay off.

    3. LESSEN YOUR PRESENT EMIS TO 30 PERCENT OF YOUR MONTHLY INCOME

    Your EMI to income ratio should not exceed 30 per cent of your net salary. Any amount that goes beyond this reduces your financial capacity to repay your loans responsibly. So, it’s better to maintain this ration on your EMIs and construct your credit score effectively.

    4. KEEP THE BORROWING TO A MINIMUM

    If you’re applying for too many loans or you’re too close to your credit card’s limit then your CIBIL score is likely to drop as such practices indicate a credit-hungry behavior. The best thing to do is not to take out a loan until it is absolutely necessary and always make sure that you are not close to your credit limits. This appropriately helps to recover from bad credit.

    5. ENHANCE YOUR CREDIT SCORE BY MIXING IT UP

    Never settle down for unsecured loans, i.e. credit cards and personal loans. Go with mixed credit bag as it includes both unsecured loans like personal loans and secured loans likes car or home loans which helps to build a better profile, because banks can recognise that you’re willing to repay the loans irrespective of loan types.

    6. DON’T KEEP APPLYING FOR CREDIT IF IT IS REJECTED

    Whether you have applied for a loan or credit card, and your request has been denied, the whole information will be recorded in your credit report. When you subsequently apply for loan in some other bank, they will see your low score and the previous rejection, and may refuse your application. In such cases the best thing to do is not submit again and wait until the score improves.

    Even though it’s fact that a poor credit score can adverse your future credit requirements, the situation isn’t beyond repair. The only thing you need to keep in mind is that it takes at least a couple of months for the scores to grow, so you need to wait a bit for your scores to show some change.

    Remember, a good CIBIL score will help you gain access to credit and loans whenever you need it. To get things right, all you need is patience and diligent effort. Let’s start rebuilding your score and work towards your financial goals and dreams.

    Are you looking to improve your LOW CIBIL Score? Contact us

  • KEY CHALLENGES OF B2B DEBT COLLECTION

    KEY CHALLENGES OF B2B DEBT COLLECTION

    Many companies work hard to maximise debt collection performance by closely working with their collection teams and Debt Collection Agencies (DCAs). However, many business owners encounter many challenges on a daily basis due to lack of proper planning while collecting the debts from their customers.

    LET’S HAVE A LOOK AT THE CHALLENGES OF B2B DEBT COLLECTION AND THE STEPS TO OVERCOME THOSE!

    HELPING CLIENTS WHEN THEY RECEIVE DEBTS FROM OTHER BUSINESSES

    To become successful, every company must strategically balance its costs with its revenue. When you look at your summary of cash flows, you may find that some losses are not due to routine operating expenses, but rather due to the money owed by other businesses.  Unfortunately, sometimes these losses may exist for a long time.

    It is no more surprising that most of the companies rely on one another and work together to achieve better results. While working together, other business owners should understand the importance of prompt invoice payment, as delay of payment will throw off the budget and operations. While you place more emphasis on handling your employees, monitoring operations, and aligning your books, the very last thing you have to worry about is undertaking collections from obstinate firms that are reluctant to pay. Keep an eye on your finances by allowing us to manage your debt collections from business to business.

    A DISTINCTIVE STRATEGY TO COLLECT B2B DEBTS

    Whether you are a vendor, supplier or offering other business benefits, your customers need to pay their invoices in a timely manner so that you can keep track of your profits. Many key differences distinguish consumer collections and B2B collections which may often won’t work properly. Hence, our law firm has come up with innovative approaches on behalf of our clients for recovering company debts.

    It is always noticeable that certain companies ‘ debts tend to be higher than the individual customers ‘ debts. Therefore business-to-business debts will have a greater impact on your profit margin and could even negatively impact the profitability of your company in the case of premium clients. In this scenario, when filing for bankruptcy and wrapping up operations, a debtor can try to postpone any payments. At that time you’ll never see a dime even after the company closes. This situation is more common than you think, as many owners choose to shut down their business rather than continuing to increase their debt.

    Since B2B debt collections are specific, never employ a consumer collection agency to recover debts from business customers. Call us for the assistance and successfully handle B2B debt collection.

    AN ON-GOING GUIDANCE TO MAINTAIN YOUR B2B RELATIONSHIPS

    Once companies try to recover debts from customers, they are reluctant to maintain a relationship with that customer. Consequently, consumer collection departments and agencies often use blunt or even threatening methods to receive payment. If you want to treat your business customers differently, particularly those who can place large orders once their budgets are back on track, then approach us as we treat b2b collections with a view to maintaining relationships. Secondly, when dealing with your business clients, we never use threatening or unprofessional methods. We keep it professional so that we don’t impact the company’s image at all— because we reflect you.

    Most B2B collections start with a letter of demand, where all it takes is a letter from an accomplished tax attorney to reassure an owner that you are adamant about debt recovery. Upon receiving the letter, the company may want to prevent further legal action and may reach out on the debt.

    In some circumstances, a business may suffer a temporary setback or lack of liquidity that prevents it from paying debt right away. At that time, we may reach an agreement that the company will be able to make lower payments or implement an instalment plan instead of paying off the debt in total simultaneously.

    Contact us for Assistance Today

    If you are an owner of a business and are owed to payments from another business, especially if that debtor company knows how to avoid payment, the path to recovering the debt can be extremely challenging. In such cases, you should focus on running your company, not constantly struggling for payments with other businesses and allow us to seek payment on your behalf of B2B debts. Call or email us online to discuss how we can support you today.

  • WHAT IS THE SARFAESI ACT?

    WHAT IS THE SARFAESI ACT?

    The supreme court, in their latest judgment, has extended the SARFAESI act to cooperative banks. SARFAESI Act or Security securitization and reconstruction of financial assets and enforcement of security interest act, 2002, were earlier applicable to commercial banks only. This change adds some new advantages to the cooperative banks.

    In this article, we will talk about what exactly is the act and how it helps the banks.

    WHAT IS THE SARFAESI ACT?

    This act was passed in December 2002 to help loan lenders to retrieve their money from borrowers who are unable to pay their dues. This act helps Financial Institutions in loan Money retrieval by permitting them to quickly sell resources of the person who failed to pay the loan amount.

    Before 2002, banks had to take a long path involving the judiciary to recover their loan amount. This entire process was highly time consuming for the bank and elongated the next loan sanctioning period.

    The inception of the SARFAESI Act in 2002, the financial institution was grant power to sell the attached assets of the borrower upon unsuccessful repayment.

    The bank would take over the ownership of the assets. It keeps the banks out of judicial involvement and therefore saves them a lot of time.

    However, this act had disadvantages for unsecured lenders. Some of these were taken care of in the insolvency and bankruptcy code, 2016.

    WHY IS THIS LAW NECESSARY?

    In the 2002 version of the law, there was no provision for cooperative banks. In 2003, the central government released a new statement, which talked about integrating cooperative banks under the rest of the banks in the SARFAESI act.

    However, the actual amendment enacted in 2013 only, the cooperative banks were formally inducting in the financial institutions’ league under the SARFAESI act.

    Many people raised questions about the changes made in the act. On 5th May 2020, the final decision to induct cooperative banks was validated by the supreme court.

    It helps the cooperative banks quickly recover their loans, helping them save time and making the loan sanctioning and recovery process shorter for both the bank and customers.

    If we look at the Indian banking system’s statistics, 2020 has around 1500 urban cooperative banks and about 95000 rural cooperative banks.

    If we look at the statistics, various cooperative banks have around 1500+ and 95000+ branches in the urban and rural provinces, respectively.

    Looking at these statistics regarding the size of cooperative banks in the Indian banking system, we can easily understand this act’s importance.

  • WHAT’S THE IMPACT OF CHEQUE BOUNCE ON YOUR CIBIL SCORE?

    WHAT’S THE IMPACT OF CHEQUE BOUNCE ON YOUR CIBIL SCORE?

    The most important aspects you need to consider while applying for a loan from any bank or financial institution is your credit score which is often considered as a CIBIL Score. Maintaining a consistent CIBIL score is one of the most significant considerations if you intend to take out a loanin the near future as it helps the bank to determine the financial ability to return the money within the specified period along with due interest. Have a look at the casino lord of the ocean.

    When we’re talking about CIBIL score, one of the main hindrances that can limit your credit score is a bounced cheque. Although it may have an adverse effect on your CIBIL, it’s not the same in all test bounce situations.

    In this post, we’re letting you know what the CIBIL score is and what the optimal CIBIL score you should strive to maintain. Along with that we will get you know about how your credit score is impacted by a cheque bounce events and also point out variables that have no impact on your CIBIL score.

    WHAT EXACTLY THE CIBIL SCORE IS?

    In simple words, CIBIL score is a numerical interpretation of your ability to pay your credit or, in other words, it illustrates how regular you are when it comes to debt payment. Generally, a CIBIL Score is calculated and provided by the Credit Information Bureau India Limited (CIBIL). The CIBIL score range ranges between 300 and 900. The higher the score, the better a loan will be for you. Anything more than 750 is considered as a better score for credit.

    DOES THE CIBIL SCORE IMPACT CHEQUE BOUNCE?

    In general, a check bounce situation occurs when your bank account has inadequate funds for redemption through a cheque. In such circumstances, the financial institution returns the cheque to the withdrawer quoting the reason as “insufficient funds.” When applying for a loan or credit card, this can probably create major problems for you in the future because banks feel insecure about lending to someone who has already been unable to pay their debts.

    Hence, it is always recommended that your bank account must have sufficient funds when you are applying for the loan such that banks and lending institutions are sure of your financial stability and do not hesitate to give you the money.

    NOW GET A PRECISE VIEW ON THE FACTORS THAT DO NOT AFFECT YOUR CIBIL SCORE

    INVESTMENT PORTFOLIO

    Generally, banks are not at all concerned about your division of assets or savings, they care about whether you are able to pay your debts within a time or not. Most people are afraid to apply for a loan because they feel that their credit does not have sufficient amounts of investment. However, it may be reinforced that your investment portfolio does not make any differencewhile deciding your CIBIL score.

    PREVIOUS LOANS

    For those people who all are thinkingabout previously obtained loans make them unable to apply to subsequent loans, it should be noted that having a successive loan does not adversely affect your CIBIL score until and unless are consistent with your EMI payments.

    INOPERATIVE SAVINGS ACCOUNT

    Maintaining a low balance in your bank account is not at all a reason that lowers your CIBIL score. Typically, account holders are under the impression that their CIBIL score will fall with a low balance in their bank account. It should be noted, that a CIBIL score is only for information about any credit and the borrower’s repayment, and is not concerned about the amount of credit that the account maintains.

    SPOUSE’S CREDIT SCORE

    The other myth about CIBIL score is that your spouse’s credit score influences your own score. Indeed, it can be made clear here that this is not the case unless both the husband and the wife seek a joint loan. Lenders should realize that, when it comes to finances, a husband and wife are completely separate entities and the efficiency of a partner in terms of credit payment does not impact each other. It is also advised that a joint loan can only be received if there are tax benefits or if the partner is a qualified employee as such an advantage strengthens your CIBIL score together.

    MULTIPLE CREDIT CARDS

    Many people often believe that having multiple credit cards would dissuade them from using loans and would affect their CIBIL score negatively. In essence, however, if a person pays his / her credit card bills in time and in full, having multiple credit cards cannot be dissuasive when they are extending their loans. In reality, it only allows the financial institution to get a better understanding of your financial payment scheme and therefore makes them better serve.

    Are you looking to improve your LOW CIBIL Score? Contact us

  • WHAT IS THE CIBIL SCORE REQUIRED FOR BUSINESS LOAN?

    WHAT IS THE CIBIL SCORE REQUIRED FOR BUSINESS LOAN?

    Business owners usually need financial help over and over again. To turn the entrepreneurial vision into reality or to keep an existing company afloat, they borrow money from banks and financial institutions. The loans with attractive interest rate fuels such businesses and enables people to engage in healthy economic trading. You can find more information about the lord of the ocean slot machine free play. Unfortunately, not every business can get such good loans.

    A business with a low credit score will not be qualified to receive a loan quickly. Hence, to increase your chances of getting a loan instantly with a better interest rate, higher amount, and a longer tenor, you need to acquire your CIBIL Company Credit Report (CCR), understand the business loan types on offer, and the evaluation methods.

    If you are not sure where to start, fret not. This article will guide you suitably in this area.

    What is a Company Credit Report?

    CIBIL produces Company Credit Report (CCR) based on the data submitted by banks and financial institutions. CCR is not a credit rating. Instead, it is a record of a company’s credit history. Banks review your company’s credit report to assess your loan applications.

    CIBIL produces Company Credit Report (CCR) based on the data submitted by banks and financial institutions. CCR is not a credit rating. Instead, it is a record of a company’s credit history. Banks review your company’s credit report to assess your loan applications.

    What does a Company Credit Report Contain?

    1. Report Order Number: Number which is generated when the customer’s company report is accessed from CIBIL.

    2. Report Summary: Comprises a number of financial facilities and institutions which have granted you loans and so forth.

    3. Profile Section: Contains company name, class of activity, DUNS number, etc.

    4. Credit Facility Details: Contains credit facility details availed by a firm.

    5. Credit Type & Enquiry Summary: Includes loan types availed and the number of inquiries made by institutions in the last 24 months.

    6. Credit Facilities Guaranteed: Contains credit facilities assured by the borrowing entity.

    7. Relationship Details: Includes the details of Directors, Partners, Shareholders, and Holding Company, amongst others.

    8. Inquiry Details: Comprises details of the number of times the company’s credit report has been demanded by a credit institution.

    9. Guarantor Details: Includes the details of individuals or business entities guaranteeing the credit facility availed by a firm.

    What are the Evaluation Parameters Used by Lenders?

    Lenders use CCR to make informed decisions based on the following parameters.

    1. Capital

    Before approving your business loan application, the lenders will inspect the class of capital the owner has devoted to his firm. Hence, prior to applying for any loan, he has to make noteworthy investments to be entitled to acquiring a loan.

    2. Collateral

    Your business loan gets approved quickly if the application consists of several types of collateral in the form of equipment, accounts receivable, inventory, and property, amongst others.

    3. Leverage

    Your amount of debt on a company’s balance sheet will be scrutinized by the lenders.

    4. Gross Profit Margin

    Your net sales minus the cost of sold goods will also be analyzed.

    5. Reimbursement Capacity

    Lenders evaluate a loan application based on the repayment history of the firm to decide if it has a good track record. Defaults or late payments by a company will result in the loan application being rejected.

    6. Turnover

    Lenders will examine the annual sales volume of sales taxes as well as discounts.

    7. Inventory

    Lenders review the company’s goods and raw materials, which are ready for sale.

    8. Liquidity

    The amount of working capital of a company will be reviewed by the lenders.

    What does not affect your Company’s CIBIL score?

    Your credit score will not be affected by the following:

    1. Current account
    2. Savings account
    3. Investment account
    4. Savings held in the past
    5. Trading accounts
    6. Fixed deposit accounts
    7. Your education level
    8. Your ethnicity
    9. Your annual income
    10. Your gender
    11. Your race

    How to Check the CIBIL Score for Business Loan?

    You can check your CIBIL score through online as well as offline methods. To get your company’s credit report online, visit www.cibil.com, and submit all the required identification and address proof documents.

    To learn your score offline, you can either apply for a credit report via post or visit the bureau by yourself. In case, if you are applying via post, you are required to furnish some of your documents. Once the authority verifies and authenticates the document, your credit report will be sent to you by mail.

    Note:

    1. As per RBI guidelines, you are entitled to obtain a free credit rating check once a year. If you have already availed this free check in the year, you can get it again by making payment to the CIBIL.

    2. There are multiple credit bureaus in India, and each of them uses its dedicated scoring procedure that has nothing to do with CIBIL. So, don’t be confused by them. The TransUnion CIBIL agency is the one we are speaking about in this article.

    How to improve your company credit score?

    If you need a business loan, you are required to improve the current CIBIL score as early as possible. However, this task might not be that easy. We have mentioned some of the ways to improve the CIBIL score that offers a better chance of getting a business loan sanctioned. Let’s explore more about it below.

    1. Sustain credit utilization ratio beneath 30% of the overall credit limit
    2. Abstain from being a guarantor for a co-borrower or anyone
    3. Refrain from making pointless loan inquiries
    4. Try not to close any old bank accounts or credit cards
    5. Identify and resolve the inaccuracies in the credit report earliest
    6. Pay off all credit card dues and debts in the form of EMIs on time
    7. Develop a balanced mix of credits, and opt for unsecured loans
    8. Request the bank to raise your credit card limit

    The Bottom Line:

    Remember not to fret, even if you have a low CIBIL score. Your loan application will still be approved but at a higher interest rate. By following the measures highlighted here, you can obtain the sweet spot to seek business loans. So, keep these things in mind and gain control over your business credit report in a shorter period.

    Are you looking to Improve your Company Credit Score? Contact us

  • 10 MUST-TRY WAYS TO IMPROVE YOUR BAD CIBIL SCORE

    10 MUST-TRY WAYS TO IMPROVE YOUR BAD CIBIL SCORE

    Do you have a low CIBIL score? Fret not. We show you ten different ways in which you can improvise the score over time. However, before proceeding, let us see what a good score is, and its benefits. 

    WHAT IS CONSIDERED A GOOD CREDIT SCORE?

    TransUnion CIBIL is one of the popular credit bureaus generating credit scores in India. This CIBIL score can range anywhere between 300 and 900.

    A score closer to 900 is interpreted as good or excellent, while anything between 300 and 549 is deemed to be poor by financial institutions. Score from 550 to 700 is considered fair. A score belonging to a poor or fair category can be improved if appropriate methods are followed.

    ADVANTAGES OF GOOD CIBIL SCORE:

    • Cards with great benefits and rewards
    • Higher credit card limit
    • Easily avail pre-approved loans
    • Quick approval on credit applications
    • Get loans with longer-term
    • Gain negotiation power
    • Discount on loan handling and other fees

    Do you wish to obtain these benefits? But, do you have a poor CIBIL score? Read on to know how to improvise it.

    1. BE DISCIPLINED WITH THE PAYMENTS

    Repaying your outstanding debt on time will have a significant influence on your CIBIL score. So, be disciplined when it comes to paying EMIs. If in case you delay the payment, you have to pay the penalty and also won’t be able to achieve a good credit score. A simple step is to set a reminder for EMI payments, so that you don’t miss the date.

    2. CUSTOMIZE YOUR LIMITS

    Your credit usage ratio will also have a significant impact on your CIBIL score. Reaching the limit will lower your credit score. So, to improve your score, start restricting the credit utilization as per the assigned limit. You can contact the lender to customize your credit limit based on your expenditures.

    3. MAINTAIN OLDER CREDIT CARDS

    Continue to maintain all your old credit cards as long as you can pay your bills fully on time. With this approach, you can form a strong and lengthy credit history, which gradually increases your score and helps you maintain a good CIBIL score throughout.

    4. AVOID MULTIPLE DEBTS AT A TIME

    Take only a minimal number of loans in a fixed period. It’s a good practice to take a loan only after you repay the previous one so that it keeps your CIBIL score from colliding. Applying for several loans at once will prove that you are running out of cash, and thereby lowers your CIBIL score further.

    5. CHOOSE A LONGER TENOR

    Opt for a longer tenor for repayment while borrowing a loan. This ensures a lower EMI so that you can make payments on time without any hassles. Your CIBIL score will improve if you don’t delay, default, or skip paying EMIs.

    6. CHOOSE DIFFERENT CREDIT FORMS

    While applying for funds, ensure that you borrow a healthy mix of credits, including both secure and unsecure loans, with a long and short tenor. It builds a robust CIBIL score and helps you access low-interest rates for your personal loans in the future.

    7. DON’T APPLY FOR CREDIT IF REJECTED

    If you have been applying for a credit card or a loan continuously, even after it’s been rejected, it impacts your CIBIL score negatively. All such information will be recorded in your credit report, and the other banks will be able to see your previous rejection and may reject your current application based on it. The subtle tactic is not to apply again and wait until the score improves.

    8. DON’T OPT FOR JOINT APPLICANTS

    Sometimes, being a joint applicant makes you suffer even if you are not at fault. That is, if you are the joint applicant for a loan taken by someone else, and if they have defaulted on payments, you too will be at a loss as it will reflect in your credit report. Hence avoid being a joint applicant or ensure that the payments are made on time.

    9. MAINTAIN LOWER FREQUENCY OF APPLICATIONS

    Avoid applying for credit cards and loans many times as the bank will ask CIBIL for your credit report every time. This inquiry will be recorded in the credit report and can lower the score after each request of your report. It shows you are credit hungry even if you are capable of repaying the amount on time.

    10. CHECK YOUR CIBIL REPORT

    There are certain cases where CIBIL makes mistakes while updating the records. This brings down your score, although you are not to blame. To avoid such unnecessary problems, check your CIBIL report regularly. This helps you recognize the errors and correct them by submitting a CIBIL Dispute Resolution Form online. And, thereby, your CIBIL score will improve.

    Build up your credit score with these smart moves. Practice it often and don’t forget to keep a tab on your EMIs and credit card payments.

    Are you looking to Improve your BAD CIBIL SCORE? Contact us

  • Crucial CIBIL Score for Home Loans: Unlocking Your Dream Home

    Crucial CIBIL Score for Home Loans: Unlocking Your Dream Home

    When you apply for a home loan, the lender will consider various factors to determine your eligibility for the loan. One of the most important factors is your credit score, also known as CIBIL score. Your CIBIL score is a three-digit number that ranges from 300 to 900, and it reflects your creditworthiness. In this article, we will discuss how your CIBIL score affects your eligibility for a home loan and what you can do to improve your score.

    Why CIBIL Score Is Important for A Home Loan?

    Your CIBIL score is one of the primary factors that lenders consider when evaluating your home loan application. The score indicates your creditworthiness and how likely you are to repay your loan on time. A high CIBIL score indicates that you have a good track record of repaying your debts and are more likely to make timely payments on your home loan.

    On the other hand, a low CIBIL score indicates that you have a poor credit history and are less likely to repay your debts on time. In such a scenario, lenders may consider you a high-risk borrower and may either reject your loan application or offer you a higher interest rate. Therefore, it is important to maintain a good CIBIL score to increase your chances of getting a home loan at a lower interest rate.

    How Is Your CIBIL Score Calculated?

    Your CIBIL score is calculated based on various factors such as your credit history, repayment history, credit utilization ratio, and the length of your credit history. Here’s a brief explanation of each factor:

    Credit History – Your credit history is a record of your past borrowings and repayments. It includes details of all your credit accounts such as credit cards, personal loans, and other loans. The longer your credit history, the higher your CIBIL score.

    Repayment History – Your repayment history is a record of your past repayments. It includes details of your loan and credit card payments, including any late payments or defaults. Timely repayments help to increase your CIBIL score, while defaults or late payments can reduce it.

    Credit Utilization Ratio – Your credit utilization ratio is the ratio of your credit card balance to your credit limit. A high credit utilization ratio indicates that you are heavily dependent on credit, which can reduce your CIBIL score.

    Length of Credit History – The length of your credit history is the amount of time you have been using credit. A longer credit history indicates that you have been using credit responsibly, which can increase your CIBIL score.

    How To Improve Your CIBIL Score for A Home Loan?

    If you have a low CIBIL score, there are several steps you can take to improve it before applying for a home loan. Here are some of the ways to improve your CIBIL score:

    Pay your debts on time – Timely repayments of your loans and credit card dues are essential to maintain a good CIBIL score. Set up reminders or automatic payments to ensure that you never miss a payment.

    Reduce your credit utilization ratio – To reduce your credit utilization ratio, try to pay off your credit card balances in full every month. If you are unable to pay off the balance, try to keep it below 30% of your credit limit.

    Avoid applying for too many loans or credit cards – Every time you apply for a loan or credit card, the lender will make an inquiry into your credit report. Too many inquiries can reduce your CIBIL score.

    Check your credit report regularly – You should check your credit report regularly to ensure that there are no errors or discrepancies. Dispute any errors with the credit bureau to ensure that they are corrected.

    Keep old credit accounts open – The length of your credit history is an important factor in determining your CIBIL score. Therefore, it is advisable to keep your old credit accounts open, even if you do not use them frequently.

    Avoid defaulting on your loans – Defaulting on your loans can have a severe impact on your CIBIL score. Therefore, it is important to make timely payments and avoid defaulting on your loans.

    Opt for a secured credit card – If you have a low CIBIL score, you may find it difficult to get a regular credit card. In such a scenario, you can opt for a secured credit card, which requires you to deposit a certain amount of money as security. This can help you build your credit score over time.

    Maintain a healthy credit mix – Having a healthy mix of secured and unsecured loans can help improve your CIBIL score. However, it is important to ensure that you do not take on too much debt and are able to make timely payments.

    Conclusion:

    Your CIBIL score is an important factor that determines your eligibility for a home loan. A good CIBIL score can help you get a home loan at a lower interest rate, while a low score can lead to rejection of your loan application or higher interest rates. Therefore, it is important to maintain a good credit score by making timely payments, reducing your credit utilization ratio, and avoiding defaulting on your loans. By following these steps, you can improve your CIBIL score and increase your chances of getting a home loan to fulfil your dream of owning a home.

    Are you looking to Improve your LOW CIBIL SCORE? Contact us

    Last updated on March 31, 2023

  • CIBIL SCORE AND CIBIL REPORT: KNOW ITS DIFFERENCE AND MORE

    CIBIL SCORE AND CIBIL REPORT: KNOW ITS DIFFERENCE AND MORE

    Are you looking to seek credits from the bank but unaware of the terminologies such as credit score, credit report, and CIBIL score used by the bank representatives? Worry not. Today we will cover the details of these terms and differences among them in-depth.

    As said above, these terms are commonly used by financial institutions such as banks while lending money to a borrower. They check the credit history of a loan applicant to determine if he/she is a responsible borrower and thereby minimize the risk of default.

    In today’s rapidly growing interconnected world, one has to know and track the credit scores, CIBIL scores, and credit reports to stay informed about their credit standing. This information is essential in leading good financial health. Hence, we help you in analyzing its meaning, features, as well as their difference from each other.

    Credit Score vs. CIBIL Score

    What is a Credit Score?

    A credit score is a 3-digit summary defining your overall credit history. A credit bureau in India produces this 3-digit score with the help of its algorithm by considering your credit history. The credit score generally ranges between 300 and 900.

    If you have been more responsible with your credit in the past, you will have a high credit score. Most lenders in India easily sanction the loans to borrowers having a credit score of 700 or more.

    What is CIBIL Score?

    CIBIL (Credit Information Bureau India Limited) is one of the major credit bureaus in India and licensed by the RBI (Reserve Bank of India). A credit score is called a CIBIL score when it is calculated by CIBIL.

    The credit score by other major credit bureaus of India, such as Equifax, Experian, and Highmark, are also considered equally valid. But, most lenders prefer a CIBIL score.

    Note the Difference:

    The only difference between credit score and CIBIL is that credit score can be provided by any of the chief credit bureaus in India, whereas only CIBIL provides a CIBIL score.

    CIBIL Score vs. CIBIL Report

    Now that you know the difference between the CIBIL score and Credit score. Let us learn about the CIBIL report in this section.

    What is CIBIL Report?

    CIBIL report, which is also referred to as a Credit Information Report (CIR) is the report generated by CIBIL based on the details of your credit and loan-related information. This data is later processed to make a detailed credit report for each individual.

    CIBIL report contains the following information:

    • Personal information – name, age, address, Permanent Account Number (PAN), contact details, etc.
    • Employment details along with income information.
    • Credit score
    • Credit card details of all your cards
    • Credit card bill payment defaults
    • Credit card cancellation details
    • Loan data such as ongoing loans, subsequent repayment timelines, and also the loan types availed in the past.
    • Defaults on loans & loan settlements (if any)
    • Number of inquiries made by you via loan providers

    If you did not know, every time you apply for a new Credit Card or any loan, the banks inform CIBIL about it, and all related applications are vigilantly recorded in your CIBIL report.

    Note the Difference:

    A CIBIL report is different from a CIBIL score, and you cannot interchange the terms. In fact, a CIBIL score is a numerical expression derived by processing credit information, and these numbers indicate the creditworthiness of a person.

    On the other hand, a CIBIL report is a document containing the overall credit information of an individual. That is, these reports have detailed information about their credit history.

    Importance of Credit Score in India

    Every loan or credit card borrower in India should check their CIBIL score from the official CIBIL website regularly, especially if they have taken loans or used Credit Cards earlier. Apply for the loan only if you meet the requirements of the credit score requirements of the lender.

    In case you have a poor CIBIL score, we advise you to improve the current score first and then apply for a new loan to get it approved immediately.

    Are you looking to Improve your LOW CIBIL SCORE? Contact us