Information is not always a good thing. In today's online and networked world you can learn everything about the person even before the first date - right from their friends and preferences to education and shirt size.
Where's the romance of the unknown? Or the secret pleasure of white lies? Computers and information sharing are not only going to affect your dating prospects, it's going to affect every major decision right from your house to your child's education.
How? Well, your credit history is being tracked and computed even without you knowing it. The day is close when every missed EMI or delayed credit card payment will be logged centrally making your credit history accessible to all financial institutions.
Says Vice President retail banking, Axis Bank, Sujan Sinha, "As of now lenders find information from field investigations and bank statements but once the concept of credit bureaus strengthens in India, all information will be a click away." A healthy credit history will do you good in more ways than one.
i. It keeps interest rates low - especially in the case of unsecured loans (such as personal loans) where a lot depends on the borrower's creditworthiness.
ii. Also, it will fetch you a larger loan amount. That means the banker will charge you a lower portion as margin and you would have to make a lesser down-payment.
iii. Good credit record also means that bankers will be willing to give you more loans. This is quite the case in credit cards. Your banker reviews your status from time to time and upgrades you to a higher credit limit, if you have been a good customer.
Says Sinha, "A healthy credit record enables faster processing of loans and easier negotiations for larger quantum of loans with lower interest rates and longer tenure." So how do you go about maintaining a clean chit?
Pop a couple of memory pills
You need to start keeping a lot of other dates in minds in addition to your anniversary, birthdays, etc. Loan instalments, insurance premiums and credit card payments come with fixed dates. Remember to pay up on time.
Currently lenders can know this from your bank statements, which you are asked to furnish along with application. So if you have had an EMI cheque bounce due to insufficient funds, you can be sure your lender knows about it.
Maintain a healthy ratio
We are not talking about your hip to chest ratio. This is about a debt-service ratio, essentially financial leverage which means the percentage of your monthly cash outflow that goes towards debt repayment.
Certified Financial Planner Karthik Jhaveri says, "Ideally, out of your total monthly cashflow, not more than 20% - 30% should be towards debt repayment."
Again, this is something that your bank statement will reveal. Your financial leverage gives the banker an idea of how much you pay towards loans and how much you save.
Don't mess with the authorities
Banks usually ask for copies of your income tax returns filed over the last few years. Statutory obligations such as income tax, wealth tax, property taxes and others are an important part of your creditworthiness. So make sure you comply with these and also maintain a record of the same.
Stay out of trouble
This is what could put your lender off the most. Nobody wants to get into a contract with a party that has a tendency to run into legal trouble. As it is, legal procedures in India today do not paint a positive picture. Banks have their own methods of finding such kind of information till the credit bureau is set up.
So pull up your socks and don't make your future pay for your past mistakes. Remember like they say in the popular series (X Files ) - The truth is indeed out there!
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