How to Judge your Financial Fitness?
It is always important to know your financial status, particularly when you are going for a credit card or taking a loan. It will also be helpful when one is facing an emergency situation. A clear knowledge about your financial status gives you a better ability of bargaining and setting the terms.
Following are steps to ascertain financial eligibility:
- CIBIL score needs to be in 3 digits, in the range of 750 to 900
- Utility bills, credit bills, and bills of all other service providers should be paid on time
- Never max out on the credit cards. It is advisable to break down the credit balances and make a comparison of the limits of what you are eligible to take
- Ensure that you have mixed types of credit. Do not take unsecured loans only. Go for secured loan also
- Always check the outstanding balance to see whether you have paid and the details have not been entered. Notify the provider without delay, if your payment has been overlooked
- Check whether there are errors on your outstanding balance, address, or personal data. Report immediately if errors are found
- Check for loans that you had not initiated, delayed payments that you had not made, wrong identity information and address, and credit enquiries which you had not made
- Keep a track of your active as well as closed accounts, consciously and constantly
- Consider consolidating your loans
It is quite easy for someone else to default in your name after stealing your identity. This is why constant credit monitoring is highly recommended. One should check his credit report at least once in every 6 months in order to keep a track. Make sure that the debt to income ratio is not unhealthy. Debt should never cross more than 40% of your earning.