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In today’s world, credit has become an integral part of our lives - in the form of credit cards, home loan, vehicle loan and personal loans, to name a few. Not only individuals, but corporates also are giving this aspect keen attention. Specialised agencies offer services in various credit-related areas to both individuals and corporates, which can be both beneficial in the short run, as well as make sense in long term financial planning.

Credit counselling for individuals:

Now as you may all know, an individual’s ability to borrow and take credit (including credit cards), depends on his credit score and credit report. These credit reports and scores are provided by the credit bureaus which act as a repository system to store, maintain, update and generate scores based on the data. In India, currently there are four credit bureaus – CIBIL, Equifax, Experian and Highmark that maintain the credit history of all individuals and supply this information to banks and other lending institutions. These lending institutions evaluate an individual’s credit worthiness based on the credit report, score and their internal credit policies.  You, as an individual can also access your credit score and credit report from the credit bureau by paying a fee.

Obtaining and reading a credit report could be easy but interpreting or decoding the technicalities is where the difficult part kicks in! An expert’s guidance and counselling could help a great deal in such situations. Analysing the credit report helps in finding out why you were rejected a particular loan or what are the factors which affect your credit score, either positively or negatively. Credit counselling agencies help you do this. Sometimes, factual errors in the credit report can also affect your credit score and credit counselling agencies can help you resolve this as well.

Credit counselling for corporates:

Credit counselling agencies offer their services across a wide spectrum of activities. There are agencies offering consulting services to new and existing credit bureaus. Agencies also offer their services to corporates to optimize the credit intake, mitigate credit risk through various strategies and also devise policies which bring about an improvement in the credit health of the company. Not only lenders, but corporates in other sectors can also make use of such specialised services. 

 

What you should look for in a Credit Counselling agency:

When you choose a Credit Counselling agency, it becomes necessary for you to divulge all your credit related information to the agency. Hence, it is important to choose a trustworthy agency. Your credit counselling agency is going to take charge of your credit life and facilitate you in improving and rebuilding your credit health. It is therefore important that you choose the agency keeping in mind factors such as:

  • Trained counsellors
  • Domain expertise  
  • Confidentiality of information
  • End – end counselling and handholding

Also make sure to take all advices in writing and also make the agency sign a confidentiality agreement with respect to your personal information.

Different Credit Counselling agencies:

There are many private players which can help you with your credit situation for a fee. Following Reserve Bank of India’s directive, banks have also started credit counselling centres, which generally do not charge a fee for the services rendered. Service centres supported by banks handle cases related to other banks as well, and help individuals in both rural as well as urban areas.

Here, we discuss some popular credit counselling options:

1.       Athena Credit Counselling Private Limited: Known by the name Credexpert, this company offers its credit counselling services to both individuals and corporates and charges a fee for the same. Analysis of an individual’s credit report, developing solutions for score improvement, credit bureau consulting, consulting lending institutions on optimization of credit scores, consulting for corporates on credit related issues,  are offered by Credexpert. There are different packages for you to choose from. The highest package offers execution help for you to improve your credit score and also track disputes. The company also offers support if you are caught in a debt trap or if you find your loan applications getting rejected repeatedly. This Mumbai based company has associated itself with GDS Link which is an international risk solutions provider.


2.       DISHA Trust: The DISHA Trust is an initiative by ICICI Bank and has centres across 9 cities in the country. This centre helps in overall financial counselling for the individual, dealing in various areas such as investment advice, advice about financial products, debt management and general money management. Financial education and financial counselling are thus the two broad areas of service. Please click here to understand more about DISHA Trust.

3.       ABHAY Credit Counselling Centre: Started in 2006 with the support of Bank of India, ABHAY advises individuals to manage their debt situation and also creates public awareness about financial management. The credit counselling centres by ABHAY are present in Mumbai, Wardha, Chennai and Gumla. It is a non-profit setup and the customers are not charged any fee for the advice given. Click here to read more about ABHAY Credit Counselling Centre.

4.       Grameen Paramarsh Kendras: This credit counselling initiative has been started by Bank of Baroda, and as the name suggests, is particularly for the rural community. Financial awareness, information sharing, credit counselling and solving financial problems of rural India are the main services offered. The centres are spread across 52 centres in the country, in various rural areas. Please click here to read more about Baroda Grameen Paramarsh Kendra.

Does it make sense to opt for the services of credit counselling agencies?

Yes, if your low credit score or poor credit history is hindering your loan applications or your financial life is debt ridden and you find yourself spending a bulk of your monthly income in servicing costly debt, then, in the long run, it can do you good to spend some money today and take the advice of experts to manage your credit situation.

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