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You MUST know your Credit Score

 

Credit is an integral part of our life today and our dependence on credit is becoming increasingly important to achieve our financial goals. Whether it is buying a house, a requirement of money in case of an exigency or funding higher education in the context of an individual or raising funds for expansion of business from the perspective of commercial requirements; credit and loans are needed to aid our aspirations.

Credit Score

Despite credit facilities playing an important role in financial life, the understanding on how credit functions is dismal. This leads to a large population getting inaccessible to credit facilities. More importantly, a large population of the ones who are able to get the loans get negatively impacted for unawareness and thus get termed as defaulters. In general, people are unaware that access to funding is an outcome of their credit wellbeing which is measured in terms of Credit Scores.

Credit Score is an outcome of complex algorithmic calculation run by Credit Bureaus and is not just a result of good repayment on existing credit facilities. A host of other factors has also impacted this three digit numeric expression of one's credit wellbeing. Credit Bureaus have been functional in India for over a decade now and today we have four of these (CIBIL, Equifax, Experian and Crif Highmark) that are operational and extend credit report and credit score to banks, lending institutions, and retail customers themselves. Everyone should check their CIBIL scores.  You may obtain a free credit score and report by visiting www.freescoreindia.com

Today, while Credit Scores impact the lending decisions of banks and other financial institutions, in times to come, they are going to play a much larger role in various other aspects of important aspects of our lives. As is the case in developed economies, the Credit Bureaus shall also start impacting the insurance premiums, cost and/or availability of various utility services in India as well. It means that a person who has a lower score might get charged a higher premium, or even get declined for a particular cover. Similarly, he may have to pay a higher fee, say on a mobile or any other utility service or even get denied for a much-required service.

 

This clearly means that a person with higher credit score shall not only be able to have access to funding at the time he needs it, but would also be able to save a lot of money just by the virtue of maintaining a good credit score.

The book "Unlock the Power of your Credit Score" unravels the details on both credit and credit scores. The reader shall be able to understand why and how the credit scores and credit reports impact the underwriting decision of lending institutions. A good understanding of credit and its active management could prove to be the key to a world of conveniences and opportunities. On the other hand, a lack of understanding on how to manage credit can lead to a situation that potentially could be financially devastating.

India is a young country with about 65% of the population under the age of 35* years. With a median age of 25 years, more and more people continue to get inducted into the financial mainstream every year. This, in turn, is expected to give rise to an astronomical increase in the demand for all kinds of products and services in general and fuel the derived demand for credit in particular.

Retail credit penetration in India is far lower than it is in even smaller countries like Thailand and Vietnam. This combined with India's young population is indicative of the growth potential for credit products in the near future.

This book attempts to bring about awareness on the concept of credit health. It explains basic credit concepts in a simple and effective manner that can appeal to the general population in India. Additionally, the illustrations and graphs make the content more interesting and easy to understand.

This book is a must read for all those who wish to achieve their financial goals, since credit essentially plays an important role in our path to achieve our objectives.

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