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Know what Credit Score means in Daily Life

Credit Score’-sounds like a heavy technical finance word. (I often use it to impress my non-finance friends. Trust me, it works like a charm! 😉 )

But hey! -Why are we even talking about it here?

Well, what if I tell you that these two words have a considerable and far-reaching impact on your life?

That they can shatter your humble dream of buying that 2 BHK near your crush’s apartment, of showing off your swag in the latest sedan or finally beginning your own start-up (even if it is a revolutionary idea) to pieces.

Really? How?  You would ask me.

Really!

It is because banks check your credit score before granting you any loans whether it is home, car, personal or business loan.

But it’s not just banks who may take your credit score into account – surveys have found your credit score can affect everything from whether you’re able to rent an apartment to who may be willing to date you.

  • Insurance companies – check your credit score before giving you any insurance policies. The higher your score, the better your insurance rates may be.
  • Credit Card companies –check your credit score before handing over that exclusive Platinum card to you.
  • Utility companies – electricity, phone, and cable – check your credit score as part of the application process. Yep, cell phone companies check your credit too! Want to buy the latest I phone 7 (On EMI of course). Guess what you need? A good credit score!
  • Certain jobs – especially those in upper management or the finance industry, require you to have a good credit history. They want to see if their cash and assets are in safe hands.
  • Landlords, property managers, and rental agencies – review potential tenants’ credit reports. They look for a pattern of missed payments or other negative information which may require you to pay a larger deposit.

(I know you suddenly have the urge to check your credit score. We will come to that soon!)

Firstly, what exactly do these two words mean?

A credit score is actually a numeric summary of your credit history. It can range from 300 to 900. Generally, the higher the number, the more trustworthy you appear to lenders. The lower your score, the more difficulty you will face.

Credit history comprises the number of times you paid your loans on time, your credit card bills on time, the percentage of total credit limit that you are using, the age of your credit cards and loan accounts (the older, the better).

In India, there are four credit information companies licensed by Reserve Bank of India (RBI) –

  • Credit Information Bureau India Ltd. (CIBIL)
  • Equifax Credit Information Services
  • Experian Credit Information
  • High Mark Credit Information Services.

The most popular one is the CIBIL credit score. This score ranges from 300 to 900, with 900 being the best score.

Living within your means, using debt wisely and paying all bills—including credit card minimum payment on time, are some of the smart financial moves to help you improve your credit score. It reduces the amount you pay for the borrowed money and put more money in your pocket to save and invest.

However, a lousy credit score doesn’t either mean you’re a bad person — it might just mean you put some unexpected bills on a credit card and had trouble paying, or that you missed a car payment when you lost your job. See below what can give you a bad score

  • Paying credit card bills late
  • Not paying credit card bills at all
  • Defaulting on a loan
  • High credit card balances
  • Having an account charged off

 

 

 

 

 

And now the one you had been waiting for – How to check your credit score?

Official CIBIL website- You can get your credit score by filling the ‘CIBIL Online Credit Score Request Form’ and paying a nominal price for the report. You will be asked your PAN number, DOB etc. to complete this form.

https://www.cibil.com/creditscore/

  • Websites like paisabazaar.com and bankbazaar.com – actually provide you with a detailed report on your credit score absolutely FREE!! You can know your chances of getting a loan approval easily.

Now the time for good news!

The RBI had mandated every credit information company in the country to release one free full credit report to every individual from January 1, 2017. It is supposed to be a detailed report carrying the records of your credit history, including repayment track record of all your credit card bills and any current or previous loans. You can apply for it once a year between January and December from one of the credit information companies.

So what are you waiting for? Go and quickly find out your credit score. Or better still, go and impress your IT friends with some finance jargon! 😉

 

How To Master Your Credit Card Points

Remember the day you gave your heart to that ‘Little Black Dress’ at Zara only to find that you are 1000 bucks short on cash and a gentle swipe of this savior helped you walk away from the store with a beautiful dress and a more beautiful smile?

What about the day you finally materialized your Bangkok plan even without the money to pay for the tickets then because you had this angel come to your rescue?

Or the day you reached early at the Airport and binged on all those free (okay, complimentary) chocolate pastries while sitting on an exquisite leather couch in the lounge because of this plastic card?

And the day this savior helped you- little, ‘almost on the verge of broke’ mortal afford that elusive phone, dream home theatre, incredible DSLR camera and thundering speakers through EMI options and the flexibility to simply pay later.

Yes! I am talking about that all time savior we carry in our pockets every day. Our very own, always there for us – Our Credit cards!

 

 

But hey, the benefits of owning a credit card don’t just stop here!

Every time you swipe/use these plastic wonders you gain additional benefits in the form of reward points. “But those points are useless because we never redeem them”, you would argue. Well, it isn’t difficult and once you start redeeming your points, you will only regret all the times you didn’t do it in the past.  

First of all, let us begin with ways to increase your reward points without increasing your expenses.

  • Make unavoidable business purchases using a credit card-  If you are a start-up or even run an old business, try making your day to day business expenses through your card. You will not even realize when you accumulated enough points to be eligible to get a free flight ticket to Singapore.

To all those who would come up with their tax woes after reading this– Small traders and businesses with a turnover of up to Rs 2 crore will pay less tax if they accept payments through banking and digital means from FY 2017-18.It means your vendors benefit too from your credit card swipes!

  • Make purchases from the Credit card portal/website to earn additional points and get amazing deals – Most good credit card companies have their websites or portals where you can get amazing deals on various electronics/hotels/flight tickets and also earn additional points. Just go to Google and type the name of your Credit Card. You will find a login page where you can register and login.
  • Sign up for value Credit Cards( after some research) to enjoy the free signing bonus points that most companies provide to promote their cards – Imagine earning reward points for just getting a new card. Trust me, I am not kidding! 😉
  • Too much traveling? Sign up for Travel Credit cards – Travel a lot? Most credit card companies have exclusive travel cards which provide much better deals on booking flights than the simple cards and you can fulfill your Europe or Australia dream much quickly. There are additional benefits if you are loyal to a particular airline! (We all look for the cheapest flights. I know! )

Secondly, how to redeem these points?

  •  If you have an account in the Bank whose credit card you own, nothing could be better. Just link your card to your account through Net Banking. You will easily see your reward points and how to redeem them from the Net Banking portal itself.
  • Use Google wisely. Type your credit card name and sign in to the rewards page of your particular card. You will be asked your card number, name etc. Choose your gift and click on ‘redeem’. Your gift will reach you soon!

However, there are some things that you need to remember while enjoying the benefits of your credit card:

  • Pay bills on time to avoid late charges/interest – It is of no use to have 2000 reward points which are equivalent to Rs. 500 and paying Rs. 500 as penalty charges because you forgot to pay your bill.
  • Sign up for cards after checking the joining/annual fee – Yes, new cards give you the benefit of additional bonus points. But, do not sign up unless you are sure that the benefit of points is greater than its annual fee!

Just a little effort and research on these plastic saviors and you aren’t far away from MASTERING YOUR REWARD POINTS!

 

 

 

5 Simple Lifestyle Changes To Save Money

Broke again?

Last days of the month and you can hardly make ends meet?

Desperately waiting for a message which reads “Rs. 30,000 credited to your account XXXXXX4545?”

Too embarrassed to confess your inability to pay the beer bill at that happening pub?

Too old to ask your parents for help and too young to save any money?

Trust me; one is NEVER too young to save money.

Whether you earn Rs. 20,000/- or Rs. 2, 00,000 (I already envy you), it is important to start saving starting from your first salary. Fortunately, you don’t have to skip dinner or start living in a pigeonhole for that. A few lifestyle changes and tada – your moment of pride and happiness as your bank balance mounts up steadily. (You can even send me a ‘gurudakshina’ from it! ;)).

  1. Note down all your expenses

Write down all of your expenditures and analyze it. I guarantee you’ll find something that either you didn’t know you were spending money on, or you felt was unnecessary. If you don’t want to keep an excel on your computer, consider an app that will automatically track expenses for you (MoneyView, Walnut, Quick Expense Manager are the popular options), or write them down in a notebook.

  1. Grocery shop on a full stomach.    

Mrs. Sharma, who spent 5 years expending Rs. 50,000 a year to cover her family needs and managed to cut her grocery bill from Rs. 8,000 to Rs. 5,000, recently shared her top tricks for reducing your grocery expenses. “Don’t go grocery shopping when you are hungry! You will end up spending way too much on things you will regret buying and feel guilty about eating ’’, she said. Bad deal, eh?

Try eating a healthy snack before heading to the store so your cravings for packaged foods aren’t out of control. Your budget — and waistline — will thank you. 😀

  1. Take pleasure in simple living

Do you really need to upgrade your iPhone 6 to iPhone 7? Does your old, reliable i10 (or Dhanno for that matter) deserve to be replaced with that overpriced sedan? Can you ever love that dazzling FOSSIL as much as your Dad’s Titan watches? Is it worth buying Steve Madden on impulse and regretting later? (Okay, I admit I have done it.)

Some expenses aren’t just worth it. Remember, your Fossil will always have an Armani to compete with and every Audi will humiliate your Honda city.  Simple living and high thinking is still the best way to live. (Remember, the Rs. 2, 00,000 category too is an audience. ;))

  1. Go homemade.

Exploring new places is fun, trying out different cuisines is important and loitering around on weekends binge eating desserts while celebrating your freedom is heavenly. After all, what else are we earning for?

But if you are eating out 5 days of the week, you and your health are in serious trouble. Learn to make at least basic Dals and Sabzis. Also, most hotels (even Dhabas) are So, you can afford that ‘London Dairy Belgium Chocolate’ you always crave for from your savings in service charges, service tax, VAT and tip alone.

  1. Walk, walk, walk

If your office is at a walking distance from your place (Lucky you!!), please walk to it. Don’t take the cab. You’ll also end up saving the money you spend on that fancy gym (which you never go to) and stay healthy. Make it a habit of taking the stairs instead of the escalator. Too clichéd I know. But it works. Also, be social and form a carpool. Less pollution and more money- ‘Man me laddu foota’? 😀 😀

Remember, emergencies are like uninvited guests. You never know which one knocks at your dinner.

A few lifestyle changes and you will never be broke again!

Cheers!

Red Pill or Blue Pill – The Dawn of Financial Matrix in India

This post has been contributed by Vidit Dugar from Fintuned Team.

We live in times where Automation & Artificial intelligence have become buzz words and to be honest, these concepts come out to be super exciting. Taking the risk of making it a little too melodramatic, whenever I hear these words, moves like Robocop, IRobot, Matrix series etc., quickly flash through my head and then I end up using my time [you can call it wasting if you wish ;)] in watching some adrenaline pumping snippets from these movies on Youtube. However, this article is not about my day-dreaming trips and therefore, let’s leave it at bay 🙂

Recently the International Advisory Board (IAB) suggested SEBI to study fee based model for robo-advisories in the investment sector bringing the recent automation of the financial advisory sector into limelight. The marriage of automation and finance is an interesting move in the Indian financial ecosystem and while countries like US and UK have moved at light speed in this domain, the recent move suggests India is ready.

If the words robo-advisory model make you imagine Skynet taking over the world or think of a robot like Baymax (From Big Hero 6) framing your investment plans, then you are mistaken because Jetsons age is not here yet.

Continue reading “Red Pill or Blue Pill – The Dawn of Financial Matrix in India”

Wrapping up Year 2016!!

Only by knowing and accepting the past, can one build a better future!

So, on the first day of the year 2017, let Fintuned take you through some interesting moments of 2016 in our own ‘un’conventional way. Wish you a very happy 2017.

Cheers !!

Say Hello to instant money transfers

India moves a step closer to becoming a cashless economy this month with the launch of unified payment interface (UPI), the brainchild of RBI governor Raghuram Rajan. 

“For a number of years, we have been saying we need a revolution in banking in India. I think we can confidently say the revolution is upon us. What we have in India is the most sophisticated public payments infrastructure in the world,” Rajan said at the launch of the UPI.

What exactly is UPI?

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It’s a secure and free way to transfer money instantly, any bank to any bank with contacts in your phone. It will allow users to pay for transactions as low as Rs 50 and go all the way up to Rs 1 lakh.

The UPI system will allow customers to send money and make payments almost as easily as sending a text message. Fund transfer will be possible 24*7, including sundays and public holidays.

It can be used in many day to day activities. To name a few:

  • Paying utility bills
  • Buying railway and movie tickets
  • Direct payment at online shopping websites and retail stores instead of using cash, or cards, or wallet
  • Transfer of money to friends and relatives

How does it affect me?

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Painful account numbers or IFSC codes are no longer required!

Further, no time will be wasted to add beneficiary as you just need one unique virtual payment address.

Rs. 0.50 per transaction will be charged. On your bank statement, it will appear as IMPS transaction.

 

What is this virtual address?

Think of it like a new & unique email ID for payments such as name@bankname.com or a mobile number@bankname.com

For example, if you want to receive or make payment through a particular bank account, you just have to give your virtual financial address (XYZ@sbi) to the other party.

Is it safe?

Absolutely!!! The new interface is built on the same infrastructure as the Immediate Payment Service (IMPS), which is currently used by banks for real-time transfer of cash. Similar to OTPs, UPI will have MPIN to authenticate the transactions, as mandated by RBI.

In case of a transaction failing, customers will be able to raise a complaint from within the app itself.

Final thoughts?

Some 21 banks have already enabled UPI on their own apps, some of which are already available on the Google Playstore; the iOS (Apple) version will come later. India being an Android country, UPI has rightly focused on getting the more important version first.

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All in all, a great move to make cashless payments faster, easier and smoother for millions of people in India.

Do not forget to share your thoughts on it.

Cheers!!

Building Reserves v/s Debt Reduction – A Choice Worth Examining

This post has been contributed by Subhashini Attalani with editorial assistance from Team Fintuned.

Before you begin reading this article, let me tell you that this is not one of those traditional personal money management article(s) that you have been consuming. Yet, this article will afford you some amazing insights that will not only help you manage your money smarter but be super helpful when you make the decision about a crucial aspect regarding your business and that’s the debt appearing in your books.

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Thomas Fuller once remarked, “Debt is the worst poverty.” And, don’t we strive to minimize/end poverty? But should we always try minimizing debt when we have extra cash? That is an interesting question to address and let us try doing that in this post. Continue reading “Building Reserves v/s Debt Reduction – A Choice Worth Examining”

Please Relax, It is Just Tax

Even though we have said it umpteen number of times, we would keep saying it.

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Yes! WHY SO SERIOUS.

It is that time of the year when everyone is a “little worried” about filing IT returns and paying tax as the date closes in. Well, Fintuned would like to help there. So, here is a quick 5 slide on how we can help. 

Cheers,

Mihir

Crowdsourcing Content

When we started Fintuned, we always had a vision to make Fintuned a portal that not only distributes financial wisdom but also becomes a venue where everyone can share their financial stories/wisdom/ideas/tools and any other thing I missed out on 🙂

Do you know why? Because:

we believe that best learning stems from healthy experiences

we believe that best learning stems from diverse ideas

we believe that best learning stems from sharing stories

Basically, we believe that the best way to know is to seek answers in stories that are all around you! Think about your life and your learning and you will realize that we aren’t wrong.

So, to get this into effect, we are doing something that will add immense value to Fintuned’s patrons.

We are inviting everyone of you to share your stories/wisdom/ideas/tools with every single one of Fintuned’s patrons and if you wish, we will keep it anonymous. You can rendezvous with us in more ways than one:

Email: fintuned.net@gmail.com ; Facebook; Twitter

Albert Einstein

Cheers,

Mihir