Loans? Build a good credit history
Few aspects of personal finance play as important a role in our financial health as credit. Virtually everyone of us uses it. Many people use it every day. While good credit can make our lives more convenient and organised, bad credit history will make lenders put you in the category of “most risky” as it will be difficult for them to trust you with any loan advance. Don’t be surprised if in future, the company you would have applied for job asks you for your credit score. Experts believe that your credit history is a reflection of your behavioral pattern and hence it is important to understand everything about it.
Credit history
Whether you have repaid your EMIs/credit card payments on time or you paid it after the due date or you didn’t pay at all is part of your credit history. All these records go into making your Credit Information Report.
A lender will check your credit history through accessing your Credit Information Report or CIR. While on one hand it helps a lender differentiate between those who have honoured their obligations responsibly and those who have defaulted, on the other it helps the borrower to negotiate better with the lender if his credit history is good. Managing Director, Credit Information Bureau of India (CIBIL), Arun Thukral says, “Individuals who have appropriately manage their obligations build ‘reputational collateral’ with lenders. In turn, this reputational collateral allows individuals to negotiate better terms with a lender”.
Credit Information Report (CIR)
The use of CIRs
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