More credit. Better pricing. Objective assessment. These are just
few of the benefits of your credit information report (CIR), reflecting
debt obligations serviced regularly and in a timely fashion. For the
first time in India, CIRs containing factual records, credit histories
of borrowers are available. Credit grantors across the country can
now access reports from CIBIL in order to make quick, objective credit
decisions.
When you approach a credit grantor for credit, your application will
be evaluated on the basis of your past payment history, existing credit
lines and other factors such as income and security. In this case,
a good CIR is one of the best indicators of the level of risk you
present to the credit grantor. A CIR that reflects a good past payment
history may lead to credit being granted on better terms. On the other
hand, a CIR, which indicates that a borrower has been delinquent on
several occasions, could lead to denial of or extremely expensive
credit.
In order to ensure a high-quality CIR, it is important to re-pay your
loans on time. However, as you accrue more debt, special efforts are
required to ensure this. The 'buy now, pay later' mindset has left
borrowers struggling to strike an adequate cash-flow balance. In this
scenario, it is extremely important for you to maintain appropriate,
reasonable and affordable levels of credit and ensure regular and
timely re-payment of loans.
Ways to improve your credit:
- Immediately establish a budget in order to control your cash
outflows.
- Ensure that your income level permits an additional monthly
outflow if you plan to take a loan.
- Investigate your options in order to reduce your interest and
other credit related costs, e.g., refinance an outstanding loan
at fixed interest rates if there is a significant drop in interest
rates or you discover a significantly cheaper option, etc. This
will make your debt burden easier to manage.
- Use some of your savings to repay some of your debt.
- Always pay on time.
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