credit report questions credit cards for people with bad credit home equity loan
Have you been paying your telephone bills on time? Do you consistently forget the due date for your insurance premiums? You better watch it! If you ever intend to apply for a loan in future all these aspects are going to count!
These are a few of the spruce up elements planned to be implemented in! your current credit reports. What's more from next year (2010! ) there will be a system in place through which you can have access to your credit reports!
Such spruce ups have been made possible through a recent move of the RBI (Reserve Bank of India), which has granted an approval for the registration of CIBIL and a few other credit agencies namely, Equifax, Experian and Highmark under CIC Act (Credit Information Companies (Regulation) Act.
Why a credit report?
The concept of credit reports came into existence to ramp up the credit system and ensure banks have an evaluation system in place to decide if a prospective borrower is credit worthy enough to lend huge sums of money to, in the form of a home loan, car loan, personal loan, etc.
Once the RBI approval comes into effect formally, more credit information on individuals can be accessed, which includes telephone bill payments, insurance premiums etc. This should provide a well rounded study of how an individual manages finances, how they repay their debts, how timely they are with their bill payments, etc.
Access to credit reports - Advantages
There are several advantages to the enhancements set to happen with the existing credit information system. Here are a few of them.
Prevents Identity theft
If an individual's credit card or bank account is being misused, keeping track of one's credit report will help the individual take c! orrective action before it comes too late or before debts star! t mounti ng to unreasonable levels. It can help prevent identity theft and instances of fraudulent transactions to a large extent.
Creates discipline and improves money management skills
Often people opt for loans due to its ready availability without giving thought to their current lifestyle, other commitments and debt liabilities. Also, they fail to account for an emergency fund and a savings plan. All these could fall into perspective once a summary of a person's credit repayment is available in a single log with a score spanning 300-900 points providing a measure of an individual's creditworthiness.
More comprehensive credit reports
RBI's approval is the first step towards more comprehensive credit reports, where more peri! odic transactions involving money inflow and outflow can be tracked to analyze if an individual adopts a careful and methodical approach to his finances and eventually serve as a financial goal map for an individual who wishes to improve his credit score.
The proof of the pudding is in the eating
The very fact that individuals will soon have access to their credit reports can come as a sigh of relief to loan applicants.
If they have a very good repayment track record and an excellent credit score their chances for bargaining for a better interest rate on the basis of their credit report is a viable option. It would also help banks significantly decrease the percentage of defaults by opting to choose a better customer for a more competitive interest rate.
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