On daily basis i receive large no of queries on Credit Score Rating. As i keep highlighting that currently, the credit bureaus consider more than 70 data points to arrive at you credit score rating. In my opinion, it is mostly an eye wash. At the end of the day what matters the most is a handful of data points. I shared these critical factors in my post, Credit Report - 5 Important Factors that decides your credit score. Secondly, you cannot expect an overnight change in your credit score rating. Credit Score is a reflection of your credit behavior and may take up to 6-9 months to reflect in a ... Read More
Credit Report – 5 Important Factors That Decides Your Credit Score
Credit Report is one of the biggest mysteries for borrowers or loan seekers. There is a common misconception that Credit Report is based on some mathematical calculations. The answer is No, It is not correct that credit report is only based on mathematical calculations. The credit score in a credit report is based on the calculations. But no one knows the formula of these mathematical calculations. Your credit report reflects the credit behavior and credit score is one of the criteria. The loan/credit approval is decided by the mix of credit score + credit behavior. Sometimes high credit ... Read More
5 Reasons Why I Prefer Credit Card Payment over Debit Card
Circa 2004, when i received my first credit card the most worried person was my father. I was fresh out of college in my first job. Moreover, during those days it was very easy to avail credit card. My father believed that it's too early for me to use a credit card. Though back of the mind his key concern was that if i will spend more on credit card beyond repayment capacity then the bill will be on him :) . Though from day 1, i ensured credit card payment or usage within my means to avoid Debt Trap. There was a study done by FMCG company on the shopping behavior of buyers. The same buyer ... Read More
How Credit Card Companies Make Money or Earn Profit
Recently one of the new age private banks forays into the credit card business. One of my clients asked me why we have so many credit card companies. The reason being, it becomes more difficult to select the right credit card. In India, only banks can offer a credit card. Here by credit card companies i mean banks including their partners, marketing agencies, sales agents etc. From bird's eye view, it is a charitable business. A bank issues a credit card to the customer. Customer use the card and bank provide temporary credit. Customer pays the bill and that's it. Prima facie the only source ... Read More
7 Tricks How Banks Make You Spend More On Your Credit Cards
Credit Cards are both boom and doom for a user. The scenario depends on how good a user is in debt or credit management. I using credit cards from last 12 years and i have never defaulted on bill payments of the credit cards. I am not saying that i am the BEST in debt management but i learned fast from my initial mistakes. Once i knew the tricks of the trade i turned, credit cards to my advantage. I shared some of these tricks in my posts, Credit Card - Save While You Spend and How to Use Credit Cards Smartly? Otherwise, credit cards can be a wealth destroyer. As a customer, i am playing ... Read More
5 Habits That Are Wealth Destroyer In A Long Run
A few years back there was a big debate "How Inflation act as a wealth destroyer?". At that time the average inflation was around 10%. I highlighted it's impact in my post, Impact of Inflation. As the inflation cooled off from 10% to comfortable zone the discussion subside. Now the inflation is no more a wealth destroyer. Thanks to the steps taken by the Govt and RBI. Have you ever wondered besides inflation what else is wealth destroyer? The first thought that comes to the mind is wrong investment decisions. I agree on the same. If you are stock market investor then you must be recalling ... Read More
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