CIBIL AND CREDIT HISTORY

I have seen a good number of people struggling to get Credit funding from Banks or financial institutions due to bad or spoiled credit history or due to bad Cibil score or record. Mostly 90% people said above are not the real defaulters and are good borrowers with paying intentions, but they spoil their credit history or cibil scores due to ignorance or small errors.

Why CIBIL and What is CIBIL :-

A good repayment track record and excellent CIBIL score is the most important criteria adopted by Banks or financial institutions for allowing funding to any borrower. Your credit score which Banks checks through cibil is the important indicator to check ;

Ø    Repayment track record for your existing or past loan accounts you held.

Ø  

         Any late payment or default history for your loan accounts or credit cards.

Ø  

         Number of loan accounts and credit cards etc. held by you.

CIBIL :-

Credit Information Bureau India Limited established in year 2000 is the India’s first Credit information agency. CIBIL collects and maintains data and record of individuals regarding availed loans and credit cards etc. from Banks and financial institutions so as the information is readily available to Banks regarding credit history and records of applicants before they sanction any fresh loans and advances.  All information regarding loans and advances being provided by Banks and financial institutions to CIBIL on monthly basis and in turn the same is shared by CIBIL to Banks and FIs.

How CIBIL report is extracted :-

CIBIL report  is extracted with PAN number , Date of Birth, Address etc. by the member Bank or FI by logging in to www.cibil.com

Credit Score :-

750 or above credit score is generally considered as good score for allowing credit facility by Banks or FIs. 79% of the loans and credit cards are sanctioned to individuals basis CIBIL score of 750.

How to improve your credit score and maintain good credit track record :-

Always Pay your dues before due date :-

Ensure to pay your dues well before or on due date. Normally in most cases people spoil their credit track by not paying the dues on due date. Example : My friend Manjeet availed Home loan from ABC Bank and in turn submitted post dated cheques for EMI from his salary account with XYZ Bank. Now on every due date he did not maintained balance in XYZ Bank and his PDC got bounced every month ,  BUT he is not a defaulter and visits ABC Bank same day and deposits his EMI in cash. Now analyze the situation ; all the EMI was paid by Manjeet on same day in cash but from CIBIL record point of view his all EMI cheques got bounced and he is not a good borrower. ??

Another example of delayed payment is Mr.Gurpreet who has availed a personal loan of 2 lacs from a Financial Institution and in turn had submitted PDCs from his salary account with JKL Bank with PDC date as 10^th of every month. Now as he is getting salary from his employer every 30^th so he allowed each PDC dated 10^th to bounce and deposited EMI every 30^th in cash. Although he had paid all his EMI with no default still he has a bad credit score with 100% DPD.

Always Serve monthly interest in time :-

My friend Sunil Kumar (commission agent by profession) is availing cash credit limit of 2.5 mn from a nationalized Bank since last 5 years. Limit utilization is always under 2.5 mn. During off season i.e. June he did not served the interest amount for a period of 75 days and his Banker also didn’t pressed upon the interest service. Sunil was in the impression that the limit is very well under sanction limit so didn’t bothered about payment and hence not resulting in DPD and now the Banker with which he is taking up the matter for his limit takeover with enhancement has refused due to interest payment default. ??

Credit Card Dispute :-

My friend Bhupinder Singh yesterday told me that he has decided not to pay his credit card dues of Rs.350/- only due to reason his banker has not send his credit card statement in physical form to him.  Now what do you think about his this decision. He will just simply spoil his credit score for future. ??

 Please be sensitized towards these small errors we normally occur and move towards a healthy credit score.

All the best.

Sanjay Mittal

R/o # 1119, Model Town, Phase III, Bathinda.

Mobile 81466 24667

Email : - shsanjaymittal@rediffmail.com

HEALTH INSURANCE

Let’s talk to any one in our circle , neighbour, relatives or any community, almost somebody is suffering from any health issues in all the families.  Some time these health problems become critical when convert into serious ailment. With rising inflation day by day (Medical inflation nearing 20% ) Medical costs are going beyond control and also these are the expense which occur without budget. Even normal and simple disease / sufferings now a days resulting into thousands of medical costs which shakes almost all the family budget.

Why Medical Insurance :-

Medical inflation is sky rocketing and even simple disease treatments are costing thousands of your hard earned money. By taking Medical or Health Insurance you can protect your hard earned money in case of any eventuality to get liquidated or in case of any Critical illness huge sum goes out of hand and some times situation arise for borrowings also if the treatment cost is huge. By taking Health Insurance you can avail reimbursement of your medical bills or can avail cashless services also from network hospitals.

Tax Benefits :-

Keeping in view the increasing medical costs Govt. of India has increased section 80D Tax exemption limits to 25,000/- (Individual or HUF) and 30,000/- (for Senior Citizens) as per Budget 2015. Payment of Medical insurance need necessarily to be paid in other than cash.  These deductions mentioned are over and above the total limit of Rs.150,000/- under section 80C.

Which Health / Medical Plan :-

Health or Medical plans can be bought in two ways i.e. Individual Health plan or Family Floater. In Individual Health plan users can avail individual health insurance plans in their name and different insurance limits are assigned to users while in Family Floater a total limit of insurance is assigned to whole family.  For more clarification let’s take an example :-

Suppose Mr.Suresh bought individual health plans in the name of himself and his wife Mrs. Sudha for an amount of INR 4 lacs so the separate insurance limits of INR 4 lacs will be assigned both to Mr.Suresh and Mrs.Sudha and in case of any requirement both of them can avail INR 4 lacs and up to total of INR 8 lacs.  In the case of Family Floater is Mr.Suresh bought health plan then the total limit of INR 4 lacs will be assigned to Mr.Suresh and Mrs.Sudha and in case of any requirement maximum amount up to INR 4 lacs will be available to both of them.

Premiums :-

Premiums are generally high in case of individual health plan and low in case of Family Floater. It is generally recommended to buy Individual Health Plan for the people less than and up to the age of 35 and Family Floater in case of age more than 35 years.

 Precautions :-

Take care of Exclusions while purchasing Health insurance. Pre existing disease or ailments are not covered or covered after certain period as per company policies. Declare your pre existing ailments while filling the forms to avoid any later stage issues. Also fully declare smoking, alcoholic or blood pressure or diabetes etc.

Claim Processing :-

Claim processing can be got done in two ways i.e. getting reimbursement from health insurance company after getting treatment and by submitting your discharge bills to company. Company or TPA (Third Party Administrator) will process the admitted claim and will reimburse the claim to you as per maximum sum assured. Another way is to get your claim processed in cashless way i.e. you just have to got your treatment done in any of the network hospital by presenting your cashless card with policy details and the hospital itself will get the claim processed and will treat you cashless and will not charge anything from you. This is the most convenient and recommended way for Health Insurance users.

 Critical Insurance Cover Rider :-

It is always recommended to get critical insurance benefit rider attached to your health insurance plan if you are above 40 years now. Critical Insurance cover pays you a lumpsum reimbursement if you are diagnosed by a critical illness. Primarily critical illness as understood are Cancer, Heart attack, major organ transplant, paralysis , kidney failure. One must got the rider attached to health insurance plan to get lumpsum reimbursement in case of any critical illness diagnosed to avoid any financial implications.

Conclusion :-

Almost all the health insurance companies allow entry to health insurance plans up to the age of around 65 years to it is always recommended to buy health plan at earlier stages of life. Premiums are also low at younger age as compared to 40 – 50 or 60 years. Also it is recommended keeping in  view the increased risk of health hazards in today;s life to buy health plan at early stage before you got struck with any such issues.

Wishing you all the best and healthy life.