Tag: loan defaulter list

6 Ways to Improve Your Credit Score

If you want to give your credit score a boost, then you must understand that it won’t happen overnight. Credit score improvement is a long process. You have to be patient and just work for it. However, if you are careful enough and take the right steps, then eventually you can easily attain a promising score.

The following are 6 of the best ways to improve CIBIL score:

  1. Watching Credit Card Usage

Credit cards can help build a good credit score. However, they can also ruin it. It all depends on how you use them.

Credit utilization is one of the biggest factors that affect your CIBIL score. Using credit cards excessively leads to a high credit utilization which is harmful to your score. However, there are two ways you can tackle this problem:

  • You can limit your credit card utilization by using cash or other payment methods save for credit cards.
  • You can divide your expenses on multiple credit cards. So, if you have to buy an air conditioner worth Rs. 30,000 and you have two credit cards, then you can charge Rs. 15,000 on each.
  1. Paying Bills on Time

Plain-vanilla timely payments can do wonders for your credit score. Not only you can minimize your debt this way, you can also make a strong case for yourself for potential lenders. Banks and financial institutions simply love those borrowers who have a long history of timely payments because it’s easy to trust them with their money.

  1. Fixing Credit Report Discrepancies

How often do you check your credit report every year? If your answer to this is “once” or “never”, then maybe that’s the reason why you are unable to improve score.

There are several benefits of monitoring your CIBIL report, one of which is the identification of mistakes or errors.

It’s easy to think that a mistake or two in your CIBIL report can’t do much harm. However, it’s completely false. Mistakes in credit reports can have grave consequences that include compelling you to get a loan for low CIBIL score.

Taking an example, if your name or address is printed wrong or if there are false mentions of late payments in your CIBIL report, then your score could easily fall by hundred points or so.

Checking your CIBIL report frequently can help you find and rectify mistakes that are hurting your score. Plus, if you identify anomalies or unrecognized transactions, loan inquiries, etc. then you can also prevent a potential case of identity fraud.

  1. Adding Something New to The Mix

A singular credit history can put limitations on your score. So, if credit report contains details of only credit card usage, or a personal loan account, etc. then you can increase credit score only so much.

Even if you are doing all the right things for your score, you can’t surpass a certain limit unless you diversify your credit usage. This is because the more diverse your credit history is, the better it’s for your score. So, if your score is solely based on your credit card usage, then you can make an improvement by availing a small personal loan, auto loan, etc.

  1. Saying “No” to Minimum Payments

Minimum credit card payments and credit score improvement don’t go hand in hand. You can only choose either of the two.

Banks highlight these “minimum payments” to lure more customers into applying for their credit cards. However, minimum payments lead to debt accumulation and lower CIBIL score. So, if you really want to enhance your score then you should always pay your credit card bills in full.

  1. Debt Consolidation

Debt consolidation is not a direct but rather an indirect way to improve credit score. In this, you combine all your loans into one. So, instead of paying several EMIs every month, you need to pay just one. The result is better money management and timely payments.

Many finance experts claim that debt consolidation can help improve CIBIL score really fast, especially if pay the EMIs on time.

If you don’t want a future in which you have to look for a loan for low CIBIL score, then it’s best you start caring for your credit report as soon as possible. In fact, today is as good as any.


Should you take a used car loan?

Many people who picture a used car think of a noisy clunker with a paintjob that has seen better days, uncomfortable seats that smell badly, and a shoddy interior that can definitely use some patching. However, that’s not usually the case. Used cars are in huge demand today, and with so many startups offering certified vehicles that have been tested and checked thoroughly, it makes more sense to get one of those rather than spend a fortune on a new car which is only slightly better than them.

If you are pondering whether you should get a used car loan, then perhaps it’s better to get some insight on the issue first.


New cars depreciate much faster than used cars. In fact, some new cars can easily lose as much as 40% of their value in the first year itself. Used cars on the other hand depreciate slowly. They can easily retain the same value for 3-4 years. Thus, it makes sense to sense to get a used car loan instead of a new car loan.

Another way to compare a used car loan with a new loan is to understand how you will be repaying the loan for at least a few years. In case of a new car, by the time you will pay the final instalment the resale value of the car itself would be too small. However, in case of a new car you can still get a decent amount by selling it.

New Car Fees

Many car dealers impose a variety of charges on new cars, such as handling charges (or logistics charges), registration charges, Life Time Road Tax, etc. Depending on your car these charged in combination can be quite high. A user car will be able to save you from most of these charges (which can go as high as a few lakhs). Thus a second hand car loan is certainly better for this reason.

Used Car Loan Interest Rate

When it comes to car loan interest rates then new cars certainly take a win. Most used cars come with high interest rates due to the following reasons:

  • Resale Value: Banks always have to keep in mind that if someday the loanee fails to repay or makes it to the loan defaulter list, then they may have to take possession of the car and get their money back by reselling it. Since, it is easier to predict the resale value of new cars in comparison to old cars they balance the risk with the latter with a high interest rate.
  • Credit Score: People who have high credit scores usually purchase a new car, and vice versa. While this may not always be the case the lenders still go by this. If anything, they know that the risk of repossession is lower with those buying new cars than those buying the old ones. Thus, they tend to offer higher interest rates on used cars.

Quality Risks

Unless you are buying an old car from a trusted seller who sells certified cars there is always the risk of getting a car that has low-grade aftermarket parts or alarms. For all you know you could be paying half the price of the car in repairs and upgrades after you have bought it. With the strain of a used car loan already on your shoulders, the additional expenses could pose a major challenge for you.  If you want to stay on the safe side, it is best to invest in a new car with a loan at a good interest rate.


Used cars and new cars have their advantage and disadvantages, which is clearly evident by the points discussed above. A loan for the former will be less of a burden than the former, but it may also be risky for the long term. Thus, in the end it is your call what’s important to you and what your long-term goals are. Be sure to go through each advantage and disadvantage and align them with your financial standing before making the final decision. Proper planning can save you from a lot of hassle in the future.

Pay off holiday debt in 6 easy steps!

Pay off holiday debt in 6 easy steps!

You are busy updating Facebook statuses and watching the ‘likes’ pile up by the second, when you get a reminder on your phone – credit card dues are pending. The rainbows of the holiday disappear in one bright flash and the humdrum of reality hits you hard. How will you manage to pay off the excesses of your holiday spirit? You need a plan and you need it fast. Here are some smart tips to help you through the fog of holiday debt.

  1. Prioritize what you want to pay first: The easiest way to take stock of all your items of payment is to create a consolidated track record of all payments made through all your credit cards or private personal loans, if any. This will give you a holistic view of all that you owe and help you plan your repayment. Attack the payments that have a heavier interest rate to ensure you can tackle the low-weight debts in due time.
  2. Hands off the credit cards: The best way to ensure you don’t default is to prevent the bills from snowballing further. In the interest of maintaining a record that leaves your name out of any loan defaulter list, curb the urge to accumulate reward points on your credit card. Keep your focus on clearing the dues on your current credit cards. Remember, that your CIBIL score takes into account the ratio between your credit limit and the amount you use up. Your holiday may have messed up that perfect credit utilization. To bring it back on track, avoid using your credit cards further.
  3. Pay up sooner and in larger chunks: Don’t just try to stay afloat by paying just the minimum amount on the card. This gets you caught in a downward debt spiral from which it takes hefty payments to recover. It is important to maintain a healthy credit score at all times, and this can only be obtained by proving that you are a financially disciplined person. Don’t wait for the monthly bill to come along before you make the payment. Bring down your debts by making as frequent payments as possible.
  4. Transfer your balance to a new card: If you are struggling to make ends meet on your repayment plans, you might want to transfer your current balance from either a single card or multiple credit cards into one card. All credit card companies allow such a transfer. With this move, you gain yourself a credit-free breathing period of 90 days, during which you won’t have to pay any interest. You could use this period to streamline your incoming cash flows, so you are ready to pay the interest once the credit-free period is over.
  5. Automate your payments: It’s true that if you are worried about repaying your debts, you will be all the more alert about not missing your repayment dates. Often, however, our best intentions are marred by simple acts of forgetfulness or emergencies such as weekends interfering with payment dates, or sudden travelling or busy schedules or technical glitches that prevent you from accessing the bank. Such events can be avoided by choosing to have money automatically deducted towards payments.
  6. Have an honest conversation with your credit card company: We don’t like to think of the worst situations, but in this grown-up world we cannot avoid facing the facts either. You may return from your holiday or vacation to a sudden emergency that locks down your finances, and you may have no way to attend to the credit cards bills that have mounted up. What do you do in such genuine cases of helplessness? Well, the best way forward is to talk to your credit card company and come to some such agreement that will prevent your bills from becoming a monster that you cannot control. They might be able to work out a solution that may give you temporary relief or even loan out money to prevent any further damage, till you are in a position to fuel your repayments from a steady source of income.

If you are not too way off target with your repayment plans, tips 1, 2 and 3 should be enough to see you through the debt load. It is important to party, to have fun, and enjoy time away from the rush of everyday life. When we do it within our means and have a hold on our budget, the fun stays for a longer time – and you can continue raking up the likes and basking in the flattering comments on Facebook!