Friday, 30 May 2014

Default Will Negatively Reflect On Credit Score Of Loan Guarantor

The credit score has evolved as one of the most crucial factors for credit decision making among credit grantors. Customers can now access their Cibil TransUnion Score directly from the Credit Information Company (CIC).
The credit score has evolved as one of the most crucial factors for credit decision making among credit grantors. Customers can now access their Cibil TransUnion Score directly from the Credit Information Company (CIC). In this article, I have answered some pertinent queries from consumers on the credit score.
 
I am a guarantor on the home loan of my brother. If my brother defaults on this home loan payment will it also negatively impact my credit score?
As a guarantor on any form of loan, you are equally
responsible to ensure the repayment of the loan. A guarantor pledges to repay a loan on behalf of a third party who has taken the loan. Hence, he provides a guarantee to the lender, that he will honour the obligation, in case the principal applicant is unable to do so.
 
If your brother (borrower) defaults on the loan repayment, this will definitely impact your (guarantor) credit score as well. Information on the default of these payments will also appear in the “Accounts” section of your Credit Information Report
(CIR).
 
The ownership indicator for this account will reflect as “Guarantor” on your CIR. Please keep in mind that your credit score will get negatively impacted if your brother defaults on the repayments of the loan.
 
You should therefore, as a guarantor on the loan, ensure that your brother pays his loan EMIs regularly on the due date, month-on-month.
 
If I am a first time borrower, how will my credit score be calculated?
A generic credit bureau score is a numerical expression based on statistical analysis of a person’s credit history that will represent the creditworthiness of that individual. Advanced statistical techniques are used to determine the specific levels of risk associated with a particular borrower based on his credit history. 
As a first time borrower you may not have any previous credit history and therefore do not have any data in the records of the CIC for calculating your score.
 
Borrowers who have their records at the CIC for at least six months (starting from the ‘open’ date of the account) are eligible of being scored. A new borrower without any history is not given a score.
 
What factors on my CIR are the most crucial in determining my credit score?
The credit score is calculated based on the information in your CIR. It is derived by using the details found in the “Accounts” and “Enquiries” sections on the CIR and ranges from 300 to 900 points.
 
The broad factors on the CIR that determine your credit score are centred around your credit utilisation, your month-on-month credit
repayment record and the number of enquiries on your CIR. In addition to this, the information about the trade attributes on your CIR, with reference to the age of the lines of credit, type of credit availed, mix or balance of credit instruments, etc are also vital in determining your credit score.
 
In order to ensure a good credit score, it is important to make timely loan repayments and wise utilisation of credit facilities. Financial discipline coupled with prudent credit management will ensure that you enjoy all the benefits associated with having a good credit score.

Credit Sudhaar is India's first Credit Health management & improvement company whose goal is to help clients to Restore, Enhance and Protect their Credit and make them credit healthy

Courtesy: DNA

How Credit Card Frauds Take Place

Recently, credit card frauds made front page headlines. In some cases, the credit card of someone in India was used in the US, despite the fact that the card was with the customer in India.
 
Though fraudulent transactions are reported on lost or stolen cards, the factor contributing the most to fraudulent transactions is duplication---copying the data on the magnetic strip in a card, when it is used for a valid transaction.
 
So, does this mean you should stop using your card? No. Come July, cards with an embedded chip and a compulsory pin (like that used for ATM transactions) will be made mandatory in India. This would make your credit card transactions more secure.
 
Till then, here are a few things to keep in mind. If you do not use your credit card much, reduce its credit limit. Most banks have this facility. The original limit can be restored whenever you need it. If you need a higher credit limit, split the amount by taking multiple cards from the same bank. If the bank doesn’t allow this, take a card from another bank as a back-up and reduce the limit on the card you use frequently. Memorise and scratch out the three-digit CVV (card verification value) code on the back of the card. Note down the bank’s call centre number, as well as your card number, and carry this with you. This way, you can block a card whenever the need arises.
 
When abroad, keep your India number in use, even if you are using a local number. This will allow access to text messages from your bank. Ensure you read all messages sent by the bank carefully and promptly block the card if any transaction is not authorised by you. Avoid using credit cards outside India, as such transactions are expensive (3.5 per cent foreign exchange surcharge is levied on all foreign exchange transactions) and the card is prone to duplication in certain countries. Instead, use foreign exchange debit cards or traveller’s cheques.
 
Online frauds
Using credit cards online has become more secure after the Reserve Bank of India mandated an independent password, known only to the customer, in addition to credit card details. If you are providing your credit card details on the phone to any establishment, the requirements are more stringent---you have to use a PIN generated specifically on a request through your registered mobile number.
 
To prevent online fraud, never go to your bank or credit card account online by clicking on links from an e-mail. Save the link to your online account in Mozilla ‘bookmarks’ or Internet Explorer ‘favorites’ if you use these browsers for online operations. Whenever you log on to net banking accounts, use the virtual keypad. This way, even if your computer is virus-infected with a keystroke logger (it keeps track of your keystrokes), your password would be secure.
 
While using the card at a merchant outlet, use the message facility available on the verification programme. You can enter a message while verifying your credit card for the first time in the ‘verified by Visa’ or ‘MasterCard Secure’ programme, such as “if this phrase is displayed, I will know this is a genuine website”. Use the net card facility offered by a few banks. Through this, while shopping on websites that charge foreign currency amounts on your credit card, banks provide a temporary one-time virtual credit card.
 
These steps will ensure credit cardholders remain relaxed, even as the regulator tries to make the overall environment more secure.

Credit Sudhaar is India's first Credit Health management & improvement company whose goal is to help clients to Restore, Enhance and Protect their Credit and make them credit healthy

CS IdentityShield helps you to Monitor, Protect and Recover your Identity from multiple risks.

Courtesy: Business Standard

Wednesday, 28 May 2014

Good Borrowing: Here’s How To Make Wise First-time Credit Choices

For young people, it is often difficult to get credit or loan when they borrow for the first time. This is because lenders do not get to check their credit track record as a first-time borrower would not have any such records. Lenders usually check the credit history of a borrower with a credit information company (CIC) as they prefer to lend to people with a healthy profile.
 
Lenders use credit score to assess your capability to pay back a debt on time and in full. Consequently, it is essential to responsibly build your credit history from the start. Before you apply for a loan, make sure you are asking for credit suitable for a student or a young person. Experian, one of the licensed CICs in the country, recently introduced a scorecard for first-to-credit customers or individuals who have never had a loan in the past. This scorecard has six grades: one representing high-risk and six representing low-risk.
 
Be responsible when you borrow – budget for it
 
When you are thinking of borrowing in any form, be careful to work out the real cost of the credit you want, including how much you will pay back in total. Draw up a budget to make sure you can afford the repayments.
 
The importance of responsible borrowing
 
When you apply for a loan, you will give the lender permission to contact a CIC and access your credit information report. The lender will know your age and should take that into account when seeing that you have little or no history of credit. Remember, in order to build up a good credit history, you must make all your repayments on time. It really is important, as all repayments – and missed ones – are recorded on your credit information report. This report will be used every time you apply for a loan.
 
Information about other people
 
When the lenders share information with a credit bureau that you have a joint loan, or you are a guarantor to a loan, the said account is flagged accordingly in the credit information report as joint, guarantor, individual, authorized user (in case of credit card) etc. Being a guarantor or a co-signee to a joint loan is a serious commitment. Even if the other party has assured you that they will take responsibility for repaying the debt, if they miss payments or default on the commitment, this will also be recorded on your credit information report and will likely affect your ability to get credit in the future.
 
Help is at hand
 
If you are struggling with any repayments, let your lenders know as soon as possible. If you keep in touch they will try to help. In the case of education loans, if you are unable to find a job or the salary is not sufficient for you to keep up the equated monthly instalment, you will find most banks willing to extend the moratorium period for up to two years and restructure your loan repayments.
 
Remember that your credit history starts to build up from the time that you first get credit. Your good financial behaviour now can make your access to credit faster and easier at later stages in life when you may need it more, for example to buy a home or a car or to set up a business. Your student loan is the foundation of your future credit history, so be responsible.

Credit Sudhaar is India's first Credit Health management & improvement company whose goal is to help clients to Restore, Enhance and Protect their Credit and make them credit healthy

Courtesy: First Biz

Stay Alert Against Cyber Crime

For, the internet itself is very complex. It is used for critical activities and cyber attackers are not easy to be identified.
 
Cyber crime is becoming rampant across the world, according to experts. Delivering a public lecture at Dayananda Sagar Institutions in Kumaraswamy Layout, Benoit Morel, professor in Engineering and Public Policy, Carnegie Mellon University, said: “ There are many types of cyber crimes but only a few come to light. Most cyber crimes do not get revealed. Cyber crime is increasing even as people are becoming more dependent on the internet. Internet users can be targeted through a cross-site request forgery (CSRF). They can also lose money while using their smart cards. But they will never know what happened.”
 
“Should cyber crimes be treated as a threat to the society or as a mere nuisance?” Morel asked and added: “There are a few reasons why cyber security is such a complex threat. The internet itself is very complex. It is used for critical activities and cyber attackers are not easy to be identified."
 
"The computers are complex objects and the attackers have a tremendous strategic advantage over the victims. Internet involves 150,000 miles of transmission lines and 130 overlapping grid controllers and is used by a variety of sectors, including hospitals, railways, homes, banks and telecoms,” he added.
 
“It is not that internet users are not aware of the threat. They are very much aware of the threat but they do not understand the threat. The attraction of the internet is also irresistible,” Morel said.
“At present, cyber espionage is endemic and malware is ubiquitous. Banks lose money electronically than they claim and credit card numbers are regularly stolen,” he said.
 
“Security is added at the end on the basis of vulnerability assessment. This is a major reason for the rise in cyber crime. Security should be part of the original design,” Morel said.
“Cyber criminals are making money by renting botnets. They invent scams, sell drugs illegally, pilfer money from banks and buy malware,” he said.
 
“Individual users should be alert. This is what we can do to avoid being victims of cyber crime,” he said. Others who spoke stressed on the need for strengthening cyber security.

Credit Sudhaar is India's first Credit Health management & improvement company whose goal is to help clients to Restore, Enhance and Protect their Credit and make them credit healthy

CS IdentityShield helps you to Monitor, Protect and Recover your Identity from multiple risks.

Courtesy: DNA

Fake Credit Card Racket: Ex-call Centre Staff, 4 Others Caught

BANGALORE: A youth, who is facing eight credit card fraud cases in Chennai including three cases where he had been convicted, was caught by the Bangalore police recently.
 
The culprit, Manoj Kumar,32, a native of Chennai who is also listed under the Goonda Act by the Chennai Crime Branch police was living at the posh Jain Heights on Kanakapura road and was found moving in a Rs one crore worth Audi car, which is now seized by the police, in the city.
 
Four of his associates, Prashanth, Dsharath Rane and Rahul Pradeep of Mumbai, and two more from the city Wasim Pasha and Imran were also caught.
 
Assistant commissioner of police G B Manjunth said the culprit was earlier working in an international call centre, probably of a multi-national bank. He collected the data of the bank's customers, mostly non-residents Indians' accounts and he aimed at these Indians abroad to use the fake credit cards which he made using the technique of skimming.
 
Inspector Manjunath Shetty of Indiranagar police station said that when Manoj was caught he had already committed several crimes in Mumbai too. Dahisar police in Mumbai registered three cases against him and he was convicted in these cases. "After release he went to Chennai where he was caught in eight cases and convicted in three others. The Chennai crime branch invoked Goonda Act against Manoj and he came and rented out the apartment for Rs 28,000 and bought the Audi car," the officer said.
 
After his arrest, for ten days the police had been trying to trace the customers of various banks who might have lost their money after Manoj Kumar made fake credit cards of these customers. "He swiped a fake credit card at a showroom in Vijayanagar and the people who are in-charge of the showroom did not even have an inkling except of the fact that they thought he was a rich man. He cheated three shops at Mantri Mall," DCP (East) PS Harsha said.
 
Manoj left Chennai in 2002-03 and went to Malaysia where he learnt the tricks of credit card skimming from a Malaysian national. "At first he used to sell these credit cards to some persons in Chennai and then changed his mind to turn his attention of swiping these fake credit cards for himself after returning from Malaysia in 2003. He got married to another woman in Malaysia and his wife lives in Chennai. He confessed that his wife was running a small canteen in Chennai but later closed it down. The couple has two sons. It was a a very clever showroom staff who caught him and handed him over to the police," the DCP said.
 
Investigators are now trying to get formal complaints from the bank customers who lost their money because of Manoj Kumar and his illegal act. "We are appealing to banks to find the customers who are the victims of Manoj Kumar. As most victims are NRIs complaining with Indian authorities seems to take some time," an officer said.
 
When he was arrested, Manoj was running a fake driving licence racket from his apartment. "He had embossing machines and seals of some of the regional transport authorities. He has been remanded to judicial custody along with four of his accomplices," an officer said.

Credit Sudhaar is India's first Credit Health management & improvement company whose goal is to help clients to Restore, Enhance and Protect their Credit and make them credit healthy

Courtesy: Times of India

Friday, 23 May 2014

Ensure Your Credit Score Is On The Safer Side

Typically, a score of 78% is considered good and 83% is considered excellent, while going below 70% indicates danger.
 
Most people are familiar with the percentage score that their children get in exams. Less-known, but equally important, is an individual’s credit score.
 
This is the score that a credit information company provides to prospective lenders. Cibil, for example, calculates a credit score apart from individual items on your credit report.
 
Higher the score, lesser the chances of default. Typically, a score of 78% (700 out of a maximum of 900) is considered good and 83% (750 out of 900) is considered excellent.
 
A credit information company uses its own formula to calculate a score that predicts the chances of that individual defaulting on a loan in the near future. If you have never borrowed in the past then you do not qualify for a credit score.
 
But why is a high credit score important? Well if you score below 72% (650 out of 900) it will be difficult to get a loan and if your score is less than 70% (<630) then unless there is a mistake in the data, that is eventually corrected, you can kiss goodbye to chances of getting a credit card or loan.
 
Not just that, your existing lenders periodically review your Cibil record (and score) and if you have a low score, banks will take precautionary action to prevent defaults such as slashing credit limits on your credit card even though you may have no dues and may be paying your amounts due on time.
 
Arun Thukral, MD, Cibil, says, “The credit score helps lenders make more reliable decisions, which are derived from robust data and objective analytics. It can also help reduce inefficiencies associated with manual subjectivity, errors and limited information. The score provides a complete picture of applicants by drawing data from a wide range of lenders and institutions covering the breadth of India’s financial services market.”
 
As of now, lenders use credit scores cautiously and negatively. 
So what to do to get a high credit score?
 
First know what your existing score is. Remember, the credit score is not given to the customer directly when he makes a request for a credit report from Cibil. So in addition to asking for a copy of your credit report, you can make a request to the bank who is considering your loan or credit card application. This report is likely to contain your credit score.
 
The simplest way for a high credit score is to make sure you pay all your dues well in time. Nothing else can help you get a high credit score. Additional steps to improve your credit score are:  
Scrutinise your credit report thoroughly for your name, address and PAN etc. Any mistakes will have an impact, as it is possible that some other person’s record has been mixed with yours. Your date of birth and PAN are the most important data items to check. Report any mistakes to Cibil and the concerned bank immediately.
 
There are certain other factors which you should work out to improve your credit score, besides paying debts on time:
 
The credit information shows the number of enquiries done by various banks for your credit report. If there have been many enquiries for your record, it indicates you are hungry for credit. But as long as the enquiries are bunched around the same time, that is not taken as a sign of credit hungriness. So plan for your credit in advance and apply to various banks together only when you actually take the loan.
 
If you have a credit card, you should at least use it one time to the maximum possible extent without touching the maximum limit. Of course, this should be for an expenditure that you anyway would have incurred. But remember to pay back 100% of your dues. For some strange reasons, most credit card companies do not report your credit limit to the credit bureau but instead report the maximum amount that has been outstanding on it.
 
So if you peak your outstanding in a month, in later months, your normal outstanding will appear as a small percentage of the maximum outstanding. This indicates that you are a prudent user of credit limits and have sufficient credit limits available to you should you need it in the future. 
 
Do not keep unrequired credit limits (more than 2 credit cards usually never make sense). If you are looking at closing a credit account, then other things remaining equal, keep your older accounts with you, as longer the credit history, it becomes more valuable.
 
The market and the credit information companies are still learning about how and why defaults happen, so expect some more updates in the future as the market develops.
 
Till then, keep working towards a good credit score as it will go a long way in ensuring a relaxed financial life.

Credit Sudhaar is India's first Credit Health management & improvement company whose goal is to help clients to Restore, Enhance and Protect their Credit and make them credit healthy

Courtesy: DNA

Your Smartphone And Tablet Are As Vulnerable As Your Computer

When it comes to viruses, internet attacks, identity theft and criminals trying to steal banking or credit card data—your smartphone and tablet are just as vulnerable as your computer. Furthermore, today’s compact mobile devices are easy to lose and easy for thieves to target—so there’s an even greater risk of sensitive information falling into the wrong hands.
 
At a ground level, almost everyone nowadays has a smartphone and nearly every popular website has a mobile version. Let us not forget popular mobile messengers WhatsApp, Viber and Google Hangouts that are very popular. But be warned; attackers are exploiting this popularity by spreading fake notifications from mobile apps. According to security firm Kaspersky Lab, in the first quarter of 2014 spammers started imitating messages from mobile apps. They especially like internet properties such as WhatsApp, Viber, Google Hangouts. Notifications purportedly sent from these apps were used to spread both malware and harmless adverts. Kaspersky Lab especially warns die-hard Apple fans of phishing attacks targeting Apple IDs, which the security firms feels will become more frequent in the times to come.
 
Let’s face it: when it comes down to it, spam and phishing scams rely primarily on exploiting trust. If the attacker can find a way to make the message appear to be from a known source, the odds that a user will take the bait are much higher. This has led to malware infections that access your contacts and send out infected emails on your behalf to everyone you know, and those same basic techniques have been adapted for instant messaging, social networks, and even SMS text messaging. In other words, Kaspersky Lab warns that mobile apps are the new frontier.
In a related incident concerning popular apps, Symantec came across scammers from India who managed to fool fellow Indians in the name of ethical hacking. The scammers tricked the users by claiming to offer a tool that could hack Facebook in order to obtain passwords belonging to the users’ friends with a disclaimer stating that it was for ‘education purposes’ only. For the same, the users needed to copy paste the code on browser console window and wait 120 minutes before the hack will supposedly work.
 
Unknowingly during this time, users ended up hacking their own accounts for the scammers and exposed their friends in the process. In the background, the account was used to follow lists and users, and give likes to pages in order to inflate the followers and like counts defined by the scammers. Additionally, it also tagged all their friends in the comments to maximise the reach of the scam.
 
Back to the malicious activity targeting mobile devices. “Recently we have seen a growth in the number of attacks targeting mobile users,” says Darya Gudkova, head of content analysis & research department at Kaspersky Lab. “Gadgets have become popular even among those who had little interaction with computers and are less familiar with computer security. This opens up new vectors of attacks for spammers and phishers.”
 
In order to protect themselves, the Kaspersky Lab specialist advises that users should remember not to open emails from unknown senders and especially not to click any links in these emails, which inevitably pose a risk to user security. Clicking unsafe links threatens user security regardless of which device is used—they pose a danger to desktop computers and mobile gadgets alike.
 
Many gadget owners are used both to synchronisation of their contacts and to the fact that messages from mobile apps can arrive via email, so few would be suspicious of the fact that WhatsApp is not directly linked to an email service. This lack of caution could prove costly, since the attached archive contained the notorious Backdoor.Win32.Androm.bjkd, whose main function is to steal personal data from users.
 
“The bad guys constantly develop new ways to attack your smartphones and computers in order to steal personal information,” says Altaf Halde, managing director, Kaspersky Lab—South Asia. “Most popular malicious programs are now multifunctional, they can steal data from the victim’s computer, make the computer part of a botnet or download and install other malicious programs without the user's knowledge. This is why it is extremely critical to update your operating system, web browser and to keep security software up-to-date,” he suggests.
 
“This will reduce the probability of cybercriminals running bad programs onto your computer or mobile device,” the Kaspersky Lab MD says. “Kaspersky Lab would also like to remind users that hacked email accounts can allow attackers access to all the information stored in your mailbox including other logins and passwords. We recommend you to use strong passwords and two-factor authentication if possible.”

Credit Sudhaar is India's first Credit Health management & improvement company whose goal is to help clients to Restore, Enhance and Protect their Credit and make them credit healthy

CS IdentityShield helps you to Monitor, Protect and Recover your Identity from multiple risks.

Coutesy: Financial Express

69% Of Targeted Cyber Attacks In India On Large Companies: Symantec

NEW DELHI: More than two-thirds of targeted cyber attacks in India are focused on large firms, with criminals willing to wait longer to strike for bigger rewards, security software maker Symantec said today.
 
There is a significant shift in cyber-criminal behaviour, with the bad guys plotting for months before pulling off huge heists instead of quicker hits with smaller rewards, Symantec India Technology Sales Director Tarun Kaura told PTI. 
 
"They are focussing on large enterprises, with over 69 per cent of the targeted attacks in India carried out on them," he added.
 
Globally, targeted attacks were up 91 per cent in 2013 and lasted an average of three times longer compared to 2012.
 
The number of "mega breaches" is on the rise, according to Symantec's Internet Security Threat Report, Vol 19. Globally, there was a 62 per cent increase in the number of data breaches from the previous year, resulting in more than 552 million identities exposed.
 
Each of the eight top data breaches in 2013 resulted in the loss of tens of millions of data records. By comparison, 2012 had only a single data breach that reached the threshold.
 
"One mega breach can be worth 50 smaller attacks. While the level of sophistication continues to grow among attackers, what was surprising was their willingness to be a lot more patient -- waiting to strike until the reward is bigger and better," he said.
 
The size and scope of breaches is exploding, putting the trust and reputation of businesses at risk and increasingly compromising consumers' personal information from credit card numbers to passwords and bank account details, he added.
 
"The potential for huge paydays means large-scale attacks are here to stay. Companies of all sizes need to re-examine, re-think and possibly re-architect their security posture," Kaura said.
 
The report found that support functions with access to critical data emerged as the strongest target for attackers.
 
"Personal assistants and those working in public relations were the two most targeted professions as cyber criminals use them as a stepping stone toward higher-profile targets like celebrities or business executives," he said.
 
In India, small businesses received the highest number of phishing and virus-bearing emails - almost three times as much as the larger targets, Symantec said. 
 
Also, almost four in 10 attacks were carried out on non-traditional service industries such as hospitality, business and personal services, followed by attacks on manufacturing, finance and insurance.
 
ndia continues to hold its position as the spam capital of the world, with close to 1.45 billion unsolicited e-mails originating from its borders every day. 
 
The country also ranked especially high in the number of top botnets, which are networks of computers that are used to send out spam e-mail messages, spread viruses, attack computers and servers, and commit other kinds of crime and fraud.

Credit Sudhaar is India's first Credit Health management & improvement company whose goal is to help clients to Restore, Enhance and Protect their Credit and make them credit healthy

CS IdentityShield helps you to Monitor, Protect and Recover your Identity from multiple risks.

Courtesy: Times of India

Monday, 19 May 2014

How Mis-reporting By Banks Can Hurt Your Credit Rating

When a customer was refused home loan by a government bank due to a negative rating assigned by the Credit Information Bureau (India) Ltd (Cibil), little did he realise his callousness in ignoring a 'free' credit card he had never applied for nor used earned him a spot in the defaulter list.
 
A good 30 days were spent in reversing the negative rating, but by then he had lost the opportunity of buying the apartment he and his family had set their eyes on.
 
The free credit card that was delivered to his home address actually had a non-disclosed annual renewal fee. Non-payment of this fee made the issuer promptly file negative default details of the ignorant customer with Cibil.
 
Cibil is the largest rating agency for assessing creditworthiness of consumers seeking bank loans, the others being late entrants such as Equifax, Experian and High Mark.
 
"We are aware of such practices, and in our bank we immediately terminate the employee indulging in unethical practices," said a CEO of a card company – a subsidiary of a large government bank.
 
"Consumers must report the matter to the Banking Ombudsman to alert such malpractices," said a spokesperson of Reserve Bank of India.
 
The scoreboard ranges between 350 points and 900 points, and any score above 750 indicates high creditworthiness and will have bankers at your doorstep with a bouquet of loans.
 
Having a score of below 750 points means banks will chase you out of their office as you are more likely to be a future defaulter.
 
Banks subscribe to Cibil's services for an annual fee.
 
Cibil maintains a huge data on every kind of bank borrowers, be it credit cards, auto loans, consumer loans or home loans. It does an analysis from its vast data and present a report card to the bank which had requested for the report.
 
Cibil, the largest of the four and the oldest, maintains over 330 million loan accounts and 180 million consumers. Any financial transactions in loans routed through banks and their subsidiaries get into Cibil's system and scores are based on the timeliness and promptness of repayments.
 
No wonder, big shopping malls, in a bid to boost sales, house representatives of banks, non-banking finance and credit card companies.
 
All these finance companies have to do is to access Cibil records for the scorecard, after which loans are doled out instantly to buyers of white goods and furniture. These companies charge a processing fee, usually 1% of the goods' value, in lieu of instant credit. How else can they earn back the hefty fee paid to Cibil?
 
Cibil on its part is secretive on its fee structure but is vocal when consumers are deprived of a good rating by unscrupulous players.
 
Speaking to dna, Harshala Chandorkar, senior vice president-consumer relations at Cibil, said, "There are two ways by which an aggrieved consumer can challenge such mis-ratings. One is through online and the second, by seeking a direct appointment with us. We are aware of such practices where a consumer gets penalised for no fault."
 
The rising malpractices of negative ratings have given rise to fly-by-night operators, who take advantage of innocent victims by offering services to reverse their negative ratings.
 
They charge a fee upwards of Rs 15,000 per negative rating, depending upon which category – credit card, auto, home loans, etc – the consumer has been classified a defaulter.
 
"There is nothing these companies can do than what individuals themselves can do," said Chandorkar.
 
"Even if a consumer has defaulted and has a poor rating score, it takes six to nine months to improve the score. Cibil has several such awareness drive for consumers," Chandorkar said.
 
Consumers can download their scorecard from the Cibil website for a fee of Rs 470.
 
"We take up such issues of mis-reporting with the concerned banks," she said.
 
But for now consumers have no equal choice of defacing banks indulging in fake negative ratings nor are there any agencies that will adversely rate banks for unethical practices. The only choice left for the salaried class is to fight through long-procedural chronology like first a protest note seeking explanation from the bank, lodging a complaint with the Ombudsman, then with the rating agency, and wait of at least four weeks to get back lost self respect.

Credit Sudhaar is India's first Credit Health management & improvement company whose goal is to help clients to Restore, Enhance and Protect their Credit and make them credit healthy

Courtesy: DNA

Friday, 16 May 2014

Cybercrime Rises 168% In Just One Year

MUMBAI: A global cybercrime syndicate's bizarre 'employee of the month' competition, in which a Ferrari has been offered for a blueprint of the best online scam, made headlines earlier this week. Closer home, cybercrime has seen an alarming 168% rise in just a year. From 63 in 2012, the number of cases went up to 169 in 2013, as per Mumbai Police.
 
This year, the number of cases was 54 in just the first quarter; by the year-end, it is expected to cross the 200 mark—almost half of the 421 cybercrime cases recorded in Mumbai from 2010. Also, experts say, more money will be lost to cybercrime this year than in the last three years put together.
 
Sending obscene emails, SMSes and MMSes tops the chart, with 84 cases registered in the city from 2010, followed by credit card fraud (78 cases).
 
The police say card fraud is the most worrisome trend. From 2012 to 2013, it rose by 300% (8 to 32 cases). This year, seven cases were registered till March 31, almost equal to the number of cases in all of 2013. The incidence of sending obscene emails, etc, rose by over 191%—from 12 in 2012 to 35 in 2013.
 
As for hacking, 32 cases have been registered since 2010, with its incidence going up from two in 2012 to eight in 2013. Also, eight cases have been registered in the first quarter of this year—a sign of things to come.
 
Cyber crime lawyer Vicky Shah said nailing cyber criminals may be time-consuming, but not difficult: "Tracking takes time due to various factors such as contacting the service provider, filing a complaint, looking into the merits of a case, jurisdiction, technology involved, etc. But the machine or communication device from where an offence is committed is traceable."
 
However, doing this needs special police skills. JCP (crime) Sadanand Date said cybercrime would only grow in the coming years. "Apart from personnel in the cyber crime cell and the cyber crime police station, officers in regular police stations, too, are being trained in the investigation of cybercrime."
 
Online expert Vijay Mukhi said securing conviction is rare and the system has failed in this regard. "Unless we put cyber criminals behind bars, the cybercrime rate will not come down. We need a special court to handle cybercrime exclusively. It is the need of the hour."

Credit Sudhaar is India's first Credit Health management & improvement company whose goal is to help clients to Restore, Enhance and Protect their Credit and make them credit healthy

CS IdentityShield helps you to Monitor, Protect and Recover your Identity from multiple risks.

Courtesy: Times of India

Tuesday, 13 May 2014

Good Credit History Opens The Door For Everything You Want

Every individual wants to give his family the best in terms of their needs and wants. They want their family to enjoy each and every luxury available and affordable.
 
For people who are financially strong, it is very easy to get whatever they and their family want. People, who are not financially strong, take financial assistance to provide luxury facilities for their family.
 
For people who are not financially strong will have to take assistance from banks and financial institutions in the form of loans. Banks and financial institution provide credit cards and loans on the basis of the credit score of the individual.
 
Now, Credit score is a three digit numerical figure which is a snapshot of the credit health of an individual. Credit Score ranges from 0 to 999 for all the bureaus. CIBIL, Experian and Equifax are the major credit bureaus that provide credit score and credit report are.
 
Of all these, CIBIL is the prominent credit bureau of India. Generally a credit score of more than 750 is considered as a good credit score.
 
All the banks and financial institution rely on the credit report and score provided by CIBIL. These scores are calculated by the bureau on the basis of the basis of the past and present credit behaviour of the individuals. Credit behaviour of the individuals can be identified by the credit history of that individual.
 
Credit history can be determined by the credit accounts taken by the individuals and the way those accounts are maintained. If an individual maintains his accounts in an efficient manner, it will result into a positive credit history and vice versa.
 
Nowadays, maintaining a good credit history is really important for individuals who intend to take financial assistance in the near future. If they do not do so, there are possibilities that their loans and credit card applications will get rejected.
 
Banks and financial institutions offer lower interest to only those individuals who have a relatively good credit score and positive credit history. Individual with bad credit score and poor credit history will have to pay out higher rate of interest.
 
Nowadays, banks and financial institutions highly depend on the credit history of the individuals whether it be a person whose income is good or not. They will charge the rate of interest as per their credit score and credit history.
 
So, maintaining a good credit history will help built good credibility and become credit healthy.

Credit Sudhaar is India's first Credit Health management & improvement company whose goal is to help clients to Restore, Enhance and Protect their Credit and make them credit healthy

Courtesy: Yahoo

5 Ways To Avoid A Credit Card Debt Trap

Niharika Mariwala is 24 years old and holds two credit cards. The Mumbai resident uses these when she travels abroad or for shopping or at a “big” dinner, and diligently pays off all dues on time. Any money left over from the salary? “On my teacher’s salary? No!” she said.
 
The number of credit card users is on the rise in India. According to Worldline E-payment Services, the total number of credit cards has risen from 19.6 million in the financial year (FY) 2013 to 20.3 million in FY14. The overall credit card spending, too, have gone up 17% over FY13.
 
Credit cards are easy to use, but difficult to understand. First-time users are especially prone to misusing them as they tend to be “swipe-happy”. There is a real danger of all the swipes adding up to a figure that’s nearly as big as your monthly salary, or bigger. Here are five ways to stop from falling into a credit card debt trap.
 
Understand the card
 
Credit cards come with a range of interest rates, fees, and reward programmes. Look for one that best suits your circumstances. If you go to a bank’s or a card provider’s website, you will see that the cards are segregated into various sections; mainly travel, shopping, fuel, cash back, premium or luxury. Some of the important details to take note of are: rate of interest, grace period, membership fees, and renewal or annual fees. Use the comparison tool.
 
Take care to understand how the card works and how the interest is applied. If the website’s explanation isn’t enough, take the help of the Internet for more information.
 
Can’t afford; don’t buy
 
Credit cards are not a source of free money. In fact, using a credit card is like taking a loan. A simple way to avoid card misuse is to charge only those purchases to the card which you know you will be able afford even at the end of the month. A Rs.20,000-mobile phone may look affordable in the first week of a month, but too expensive in the last week.
 
Increasing the credit card’s limit may sound attractive, and there are many offers to do so. Before you take up such an offer, refer to the 20-10 rule. “Avoid borrowing more than 20% of your annual net income on all of your loans (not including a mortgage). And payments on those loans should not exceed 10% of your monthly net income,” said a Visa spokesperson.
 
If for some reason you need cash urgently and decide to use your credit card at an ATM, remember that there is a fee attached, and that such cash withdrawals attract an interest rate from day one. For instance, Citibank NA charges a 2% transaction charge (subject to a minimum of Rs.300) on platinum cards.
 
Many of us also make the mistake of using our credit card to pay for a group meal at a restaurant and accepting others’ share in cash. Or, pay for someone else’s online purchase. Before you generously offer your card, ask yourself: will you spend the cash that everyone is paying or will you have enough left when it’s time to pay the credit card bill?
 
Remember the due date
 
This is a real killer because interest rates on credit cards can be quite high: from 1.99% a month (that’s 23.88% annually) to 3.5% a month (that’s 42% a year) depending on the type of card. What’s more, the interest is charged on the entire outstanding amount; and it’s applied from the date of purchase, and not from the beginning of the month. The formula used to calculate daily interest is: [(outstanding amount x interest rate per month x 12)/365].
 
Let’s take the Rs.20,000 phone as example. Say, the interest rate is 3.1% per month, purchase date is 20 April, and statement date is 1 May (difference of 12 days). Now, if you miss the due date, the amount of interest you will be charged is: [(20,000 x 3.1% x 12)/365] x 12 = Rs.244.60
 
On top of this, there will be a late payment or a delinquency fees. For example, HDFC Bank Ltd, charges a flat fee depending the statement balance due—it’s Rs.700 if the bill is above Rs.20,000.
 
“The late payment fees along with the accruing interest rate can lead you straight into a debt trap,” said Sanjay Agarwal, senior vice-president and group head-retail business and technology solutions group at Asset Reconstruction Co. (India) Ltd.
 
The side-effects of paying late go further. Credit card providers offer a range of incentives and rewards. “Typically, a card user can get one point per Rs.40-200 spent, depending on the card and the bank,” said Shailesh Baidwan, country manager and head-consumer services, American Express Banking Corp. These points will expire if you do not pay your bill on time over a period of few months.
 
Late payment and even withdrawing cash using your card will mean losing out on the grace period or interest-free period, which usually varies between 20 and 60 days.
 
Pay the full amount
 
Card issuers give you the option of paying a minimum amount by the due date, which is usually 2.5-20% of the total amount due, along with applicable card fees, overdue minimum payment, and any instalments. “Any amount paid that’s less than the total amount will have interest charged on it. Any amount paid less than minimum payment due as on payment due date will also attract late payment charges,” said Parag Rao, senior executive vice-president, business head-card payment products and merchant acquiring services, HDFC Bank.
 
Here’s an example given by American Express on its website: On the American Express Platinum travel credit card with an interest rate of 3.1% per month, on a transaction of Rs.5,000 if the minimum payment due is paid every month (subject to a minimum payment of Rs.100 every month), it will take up to 75 months for entire outstanding amount to be paid—which will balloon to around Rs.10,000.
 
Make payments easy
 
Credit cards can be a smart tool if used the right way, especially to ramp up a good credit score. “A credit card bill is the first loan that a person will default on. A disciplined credit card user, according to banks, is a good borrower,” said Agarwal. To protect yourself from all the damages, pay on time. But it may happen that you forgot to pay the credit card bill on time. To avoid such instances, simply create an electronic clearing system mandate with the bank to automatically debit the credit card bill amount every month. According to Agarwal, “This will bring about discipline of payment.”

Credit Sudhaar is India's first Credit Health management & improvement company whose goal is to help clients to Restore, Enhance and Protect their Credit and make them credit healthy

CS IdentityShield helps you to Monitor, Protect and Recover your Identity from multiple risks.

Courtesy: Live Mint