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A Good Credit Score will Help You Demand Better Terms

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In today's fast-paced economy where brands and services are competing closely for the consumer's attention and business, deriving the best value of your money is imperative. Be it goods or services like insurance, telecom or banking, we now have multiple options to choose from based on our requirements.


Take for instance the credit sector where we now have several banks and financial institutions which are keen to provide loans and credit cards to disciplined consumers who have a healthy credit history. Today, almost all banks and lending institutions check the credit score and credit information report (CIR) before approving loan applications. A consumer's credit score has today become the most prudent indicator of his or her financial discipline and credit eligibility. Therefore, a consumer with a good credit score is most desired by lenders and can use this powerful reputational collateral to his/her advantage.


The first step is to know your credit score and understand your credit health.
Since the growth of the credit information industry, the only implemented generic scoring model that has been introduced and is being used by lenders in India is the CIBIL Trans Union Score. Through advanced analytics, this score assigns a number from 300 to 900 to a borrower based on the credit history. The higher your credit score (i.e. the closer it is to 900) the more likely you are to get your loan application approved. The reason being, closer the score is to 900, the more confidence the loan provider will have in the individual's ability to repay the loan.
While each bank will have its own credit scoring cut-off based on the credit sanctioning policies, it has been observed that most banks are lending to consumers with a credit score of 750 and above. In addition to a good credit score, lenders may also consider other critical factors like your income to debt ratio, your residential status, professional qualifications etc. while deciding on your loan application. Therefore, along with a good credit score you must also ensure that all these factors are well placed before applying for a loan. To avail the benefits of your good credit score you should:

• Evaluate the home loan options and shortlist the ones that best suit your financial requirements

• Ensure that all the documentation required along with the loan application is up to date and ready for provision. This may include PAN card copy, passport copy, Form 16 for the previous two years, and six months' bank statements etc.

• You should also keep your latest credit report and score ready with you if the lenders require any clarifications.

• If you are planning to have a co-applicant for this loan then you must also ensure that all the documents required on behalf of the co-applicant are also ready. It is also advisable to check the co-applicant's credit score, as this is also checked by the lenders.

• Approach the lenders who are providing the loan plans which you have shortlisted. Mention to them that you have a high credit score and healthy credit report, along with all the documentation in place. Request them to provide you the best possible terms and conditions, as well as loan processing timelines, based on your credit score.

• Once the lenders revert to you with the information, evaluate the most optimal option that provides you the best deal in the shortest possible processing time.
Based on the information on your high credit score, there are chances that the lenders may provide you with competitive terms and conditions. Through this approach, you will be able to bargain and avail the most advantageous home loan offer. Also, as all your groundwork and documentation is ready, you can immediately apply for the loan. Once you apply, your credit report and credit score will be checked by the lender and on reconfirmation and validation of the documentation, they may sanction the credit based on the promised terms and conditions.

 

 

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Invest in Tax Saving Mutual Funds ( ELSS Mutual Funds ) to upto Rs 1 lakh and Save tax under Section 80C.

 

Invest Tax Saving Mutual Funds Online

Tax Saving Mutual Funds Online

These links can be used to Purchase Mutual Funds Online that are regular also (Investment, non-tax saving)

 

Download Tax Saving Mutual Fund Application Forms from all AMCs

Download Tax Saving Mutual Fund Applications

 

These Application Forms can be used for buying regular mutual funds also

 

Some of the best Tax Saving Mutual Funds available ( ELSS Mutual Funds )

  1. HDFC TaxSaver
  2. ICICI Prudential Tax Plan
  3. DSP BlackRock Tax Saver Fund
  4. Birla Sun Life Tax Relief '96
  5. Reliance Tax Saver (ELSS) Fund
  6. IDFC Tax Advantage (ELSS) Fund
  7. SBI Magnum Tax Gain Scheme 1993
  8. Sundaram Tax Saver

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