Wondering why your
Home loan application was rejected & that too after being regular in repayments?
The answer may lie in
seeking too many loans or / no loans at all. With credit scores becoming a key
to garnering loans, too many loans is depicted as ‘hunger for credit’ while no
loans means you have no credit history.
Negative Score..!
According to
officials of major credit rating agencies, if you have not applied for any loan
for a few years, the rating agencies does not have enough data on you &
that means a negative score.
For example, the
score given by CIBIL (CREDIT INFORMATION BUREAU (INDIA) LIMITED) is calculated based on the credit history of the
borrower over the past 2 years (24 months).
According to Mr.Harshala Chandorkar, Senior
Vice-President, Consumer Relations said, “A minimum of six (6) months of recent
credit history is required for generating the CIBIL TransUnion Score on a
borrower”
So, if an individual
has paid back & closed his / her loan or credit cards a few years back
& does not have any credit cards
or/ existing loans since then, he / she
will not get a credit score.
A value of '-1' will
be put against his / or her credit score which implies no history (NH) is
available on the borrower for generating the credit score.
Do bankers or housing
Finance companies take the rating of NH seriously?
According to them, if
you do not have a score or / loan
history, the bank / HFCs would seek more information, making the process of
loan approval slower.
Says a senior with a
leading private HFC: “While it gives a clean history, the absence of any information
means more checks & balances. So, we ask such people to give us more
references so that we can cross-check the person’s background.”
There are other
traits that the credit agency will consider while giving your credit rating.
Sudden usage of all credit
cards when you have been using only one for a long time, high credit
utilisation consistently and, of course, too many unsecured loans.
According to Mr.Mohan Jayaraman, MD, Experian Credit
Information Company, “Having too many
unsecured loans (like personal loan or credit card loan) can be seen as risky
behaviour, since it is an indication that there are too many contingencies in
your life. This may make the lender question about your ability to repay on
time,''
Consequently, if you
are planning to go for a big loan, housing or car, you really do not want these
factors to come into play. It would be wise to clean your books and well in
advance, say six (6) months to 12 months
(one year). If you have too many personal loans / credit card loans, take one
big loan & clear all the other dues. This applies for a large credit card
due. Similarly, ensure instalments are paid on time and regularly.
Small things such as
dues of some fees due to bouncing of an earlier cheque needs to be cleared. The
amounts might be small like Rs. 500 to
Rs. 750 but it hurts your loan-taking ability. For youngsters with little or no
credit history, it would make more sense to have a parent as a co-applicant.
Registered Corporate Office
CREDIT INFORMATION BUREAU (INDIA) LIMITED
Hoechst House, 6th Floor,
193 Backbay Reclamation,
Nariman Point, Mumbai - 400 021
Hoechst House, 6th Floor,
193 Backbay Reclamation,
Nariman Point, Mumbai - 400 021
Branch Office
CREDIT INFORMATION BUREAU (INDIA) LIMITED
Hoechst House, 7th Floor,
193 Backbay Reclamation,
Nariman Point, Mumbai 400 021
Hoechst House, 7th Floor,
193 Backbay Reclamation,
Nariman Point, Mumbai 400 021
Contact Details
Tel : +91 -22 6638 4600
Fax : +91 -22 6638 4666
Src: BS
My loan was rejected. Credit Sudhaar was my choice. Initially they were slow. But their counsellors were able to handle all my queries. I will give Credit Sudhaar a positive review
ReplyDeleteI had no idea my credit was bad. The guys at Credit Sudhaar analysed my report. The process took some time but my credit was restored, enhanced and protected. I have no reason for complaints.
ReplyDelete