Wednesday, 31 July 2013

The nuances of consolidating your debt and its effects on your credit health

Debt is no less than a disease. It can be called a silent killer. Although you know it that you should keep debt at bay, yet no matter however much you try to control your finances, it is very hard to remain totally debt free. To add to the burden is the negative light that your debt ridden records throw on your credit life. It is absolutely difficult to retain a healthy credit report if you have a history that shows your inability to cover up debts and repay loans regularly. So what option are you left with to get rid of this burden?
In such a scenario, debt consolidation may seem to be the best viable option. Very lucidly put, it means consolidating all your accounts and balances allowing you to make one single monthly payment. This allows you the opportunity to not only pay off your debts but also saves you from the embarrassing warnings of your lenders. Debt consolidation, however, does have an effect on your credit score. But then again, it depends on how you have managed the consolidation and based on that you will come to know whether the effect on your report is positive or negative.  

It is of course very easy and feasible to manage one single payment account instead of half a dozen varied accounts. Otherwise, with different accounts, interest also keeps adding up and it becomes very difficult to manage them. But the good thing about having one account is that now you know exactly how much you have to keep aside from your monthly salary to pay off your debts. Hence, you can accordingly budget your savings and expenditure. You will soon realize that by doing this you are actually saving more money than you used to before consolidating your debt. At times your credit card can come up as a savior. A credit card with a zero percent interest rate is also used for debt consolidation.

You can also use an installment loan to consolidate your credit cards if you have high balance to pay off. An installment loan is a loan which allows fixed monthly payments. This procedure may assist you in improving your credit score also because you are putting the loan to use in repaying your credit card bills that are near their limits. However, this comes with a price. Sometimes, taking a new loan especially at a time of crisis can plunge your credit rating.

Transferring a high-rate credit card balance to a card at a lower rate can be another way to consolidate. But you have to be very careful as there are certain pitfalls in this approach like getting trapped at higher rates of interest once the introductory period is over.   
It has been seen that majority of the people apply for a new loan to pay off the previous loans or debts and once it is paid, they close these accounts. But they fail to realize that the credit score comprises of the amount of credit that is available to them and how much of it they are actually using. So, if you close your accounts after you pay off your debts, you will reduce the amount of credit you have. This will but naturally lowering your credit score.

Apart from running the risk of damaging your credit score, you are also not sure whether you will be easily getting such a loan that comes with suitable terms and conditions. And that too at a time when you are already suffering from heavy debt issues because of which your credit score has further dropped down. It is common knowledge that lenders always cross check your CIBIL score before approving you a loan.

However, you can always take the help of credit health improvement companies who can take you out from this financial mess. CreditSudhaar is one such company in India that has proved to be of great help to hundreds of their client in helping to consolidate their debt. It goes without saying that their expert handling of such cases have yielded positive results because not only have their clients successfully consolidated their loans but they have also managed to remain extremely credit healthy. 

Thursday, 18 July 2013

Make your Will before it is too late

You have lived all your life saving every penny for the future of your children so that when you die, everything will be transferred to your children. Wish it was that easy! It is not a piece of crockery set or a luxury watch which you will be giving to your kids or for that matter to your wife after you are gone. Here we are talking about valuable assets like a house, a plot of land, jewellery, car and money. This is done by drafting a will – a legal document that categorically specifies who will inherit your wealth and your prized possessions. Your will might also include charitable contributions, organs donation, specify funeral arrangements, etc.

Especially if you are the head of the family, this is the most important thing that you should be doing lest it will become very cumbersome, not for you but for your posterity. To start with, you can write your will by yourself but it is suggested that you take legal help, more specifically from lawyers who specialize in such matters.  Also remember to bring in a witness while signing it to make it legally valid.

You should write it down carefully as to whom you would like to make the benefactor of your possessions and when i.e. the age of the benefactor. In case your children are not yet legally adults, you should mention who will be the legal guardian of them. Though there is no hard and fast rule as to where you should keep your will, it is normally kept in a safer place. Or you can also keep it in the hands of your lawyer. But do not forget to tell this to the person who will carry out your will.

In case of life insurance policies, the amount of money will eventually go to the person whose name is in the beneficiary form at the time when you have opened your account irrespective of the name that you mention in your will. So be extra cautious about the names of your beneficiaries and make the necessary changes if need be. It is not only your wealth that you should keep in mind. A situation may arise when your children have not attained adulthood and you want to include a letter stating how you'd like your children to be raised and educated and by whom. Then again, it might so happen that the guardian you appointed is not available or is unable or unwilling to take care of your children. Then you will have to make a second choice and include that person’s name on your will.

It is an altogether different scenario if you do not have a will before you die. In that case, you cannot be sure that your valuables will go to the person or persons you wanted to transfer to after your death. It is also suggested that you do not consider writing a joint will with your spouse and instead make your own separate document. Though it seems practical and less burdensome, the reason why you should make separate wills is because the joint will binds your partner’s wishes with yours and vice versa.  It does not leave much scope for the surviving partner to change the contents if he wishes to in some future date.

It is to be noted that you should also keep updating your will from time to time because laws as well as situations keep changing and you have to keep pace with the changing times. For example, you might go through a divorce, enter into a second matrimony or have additional members in your family like grandchildren. Moreover, inheritance tax and gift tax limits also keep fluctuating very often. You can, therefore, see that preparing a document is no child’s play. It needs minute observation as a lot of terminologies go into it which is beyond the comprehension of the common man.

Although you can consult lawyers for such a job, you may also take advice from credit health improvement companies since you have to keep abreast with your credit life too. Bringing onboard vast experience into this field is Credit Sudhaar, India’s first and leading credit health improvement company. They have experts who are adept in putting forward valuable inputs and astute insights which have proved to be utterly helpful for clients in the long run. They cater to hundreds of clients on a day to day basis; so you can judge their expertise for yourself. So seek professional assistance and play safe in your will.

Wednesday, 10 July 2013

Beware of identity theft – you might be the next victim!

Punit had applied for a car loan a month back and was waiting anxiously when he will finally drive his favorite SUV once the loan is approved. But to his utter dismay, he found that the bank has rejected his loan on the grounds of poor credit score. Wait a minute! Punit has always been a very sincere and responsible person who never lapses on repayment of previous loans neither he has any pending credit card bills. So being held up for a poor score is simply next to impossible. His nightmare begins when he starts getting warning calls from credit card companies for payment of bills he has never applied for. He desperately wishes that he is not the victim of identity theft. But unfortunately, he is.

But he is not the only one – hundreds of people are suffering from this malicious practice of identity theft that seems to be operating on a large scale across the country. And till now, no one has been able to curb it successfully. So it is only safe to be vigilant at your end. Keep your cards at a same place, be very careful while using your credit card especially for online shopping, and try not to lose it anywhere.

However, if you are already a victim of identity theft, you would know that someone is using all your personal information to obtain credit and when the imposter is not being able to pay his bills, you are being called upon to pay for something you have never purchased. Besides the tension that it has caused you, you will also find that your credit score has drastically gone down – the same score which took you on so many months to get better is now in the shambles. Now you are faced with such a situation that you cannot obtain credit for yourself also.

Though at this moment it is futile to ask you not to panic, but all is not lost yet. There are several ways to stop this from getting worst. As soon as you come to know that your identity has been stolen, the first thing you should do is obtain a police report affirming your stolen identity. Then notify the credit bureaus like CIBIL or Equifax. Request them to send you a copy of your credit report. Once you get the copy, search for all the fraudulent account that have been created in your name. Write to that credit bureau requesting them to block all the fraud accounts as soon as possible. After this is done, ask the bureau to inform those who have received a copy of your report about the erroneous information. And keep checking your credit report regularly from now on.

If your credit or debit card has been used by the thief, write a letter to the company or bank informing them about the fraud and request them to provide new account numbers. Also, change all the passwords and PINs and add new ones. Another important thing that you should do is to take action to have any criminal or civil judgments against you that may have resulted from your identity thief's action.

But it might also have happened that the thief had continued using all your credit and you had no chance of coming to know about it. In such a case.

However, one thing you should keep in mind is that it is easy to write down the procedures that you should follow to avoid identity theft. But when it actually happens, things go haywire on ground and it is impossible to manage everything at one time. To help you out at such moment of utter crisis, there are agencies that are willing to assist you with their experience and expertise. Credit Sudhaar is one such company. Being India’s leading credit health improvement company, they have an excellent workforce who are specialized in dealing with such critical operations. They provide customized solutions dealing with each customer personally depending on their particular problem. Avail their services if you want to keep yourself out of trouble and secure your credit life in future. 

Tuesday, 2 July 2013

Simple ways to understand your credit report better

According to a survey conducted recently, it was found out that a magnanimous 97% of the Indian population was absolutely oblivious of their credit score. In fact they hardly know that something as highly important as a credit report exists and to what extent it can influence their future financial health. This reflects the fact that the credit health sector is at a very nascent state and has a lot of ground work to do before people starts taking it seriously. There are many technical terminologies that go into improving your credit health and it is impossible to understand them all at once.

So the question arises as to how to read your credit report so that you can easily understand it.

To begin with, there is the credit score which is a numeric digit and is within the range of 300 to 900 points. Your credit score will be anywhere in between but what you should be knowing is that it should be on the right side of the scale between 800 to 900 points to be considered it a satisfactory credit score. The need to have a good credit score arises when you apply for loans, credit cards, telephone connection, search rented accommodation or even while applying for jobs. You get a lot of benefits like lower interest rates, timely approval of loans and cards if you furnish a good credit report. In simple terms, the credit rating shows how dependable you are when it comes to repaying your debts.

Now you might be thinking who compiles this information and how do they get hold of it? Well, there are credit bureaus that are in charge of your credit reports and they collate all your credit information through banks, lenders, credit card companies, land lords, and everywhere else with whom you have had a financial history. This information is cross checked by everyone who lends credit to you. If you had a decent history of timely repayment of loans, bill payments and most importantly, you are not bankrupt, then surely you will pass as a responsible person.

Cibil, Equifax, Experian are some of the main credit bureaus through which you can get a copy of your credit report. Generally, your credit report will include your personal information like full name, present, previous and permanent address, date of birth, contact number, Email address, PAN card number and even places of employment. Other than this, the report has details about your credit information like a list of active and closed accounts, account numbers, your monthly payment and payment history. The report also contains the names of companies and individuals who have made inquiries about your credit in the last two years.  

The public records section will include information like bankruptcies, judgments, foreclosures, tax liens, state and country court records. Only severe financial blunders appear in this section, not criminal arrests or convictions. Because public records can severely damage your credit, it's best to keep this section clear. 

Your account history will be very detailed, but it's important that you go through it thoroughly to make sure the information is being reported correctly and see that there are no errors in it. An erroneous credit report will cost your dearly in the long run.

There are many credit health improvement companies that will help you to better your score. CreditSudhaar, India’s premier and most reliable credit health improvement company, can be the ladder that bridges the gap between your poor score to a high scoring credit rating. In fact, the company is considered to have single handedly brought to light the importance of credit health amongst the masses.

A dedicated team of specialist who have commendable experience in the credit, banking and financial sector for the last years or more will happily assist you in your venture towards a secured credit future. You can always take their valuable advice and wisdom if you have any doubts or confusion regarding your credit rating.