Fintech startup Wishfin has partnered with Transunion Cibil to provide credit scores through WhatsApp
Shaikh Zoaib Saleem | Last Published: Thu, Jun 28 2018. 11 15 AM IST | LiveMint.com
Over the past couple of years, credit information companies or credit bureaus operational in India—TransUnion Cibil, Equifax Credit Information Services Pvt. Ltd, Experian Credit Information Co. of India Pvt. Ltd and CRIF High Mark Credit Information Services Pvt. Ltd— have tied up with several fintech companies to provide customers credit scores, credit reports as well as monthly updates, on request.
Fintech startup Wishfin has gone a step ahead and partnered with Transunion Cibil to provide credit scores through WhatsApp.
A credit score is based on your credit history, like repayment of EMIs and credit card dues. A good credit score can boost your bargaining power when you go for a loan, especially big-ticket loans like a home loan. Some banks even offer lower rates to individuals with high scores.
How to get credit score on WhatsApp?
You are required to either give a missed call on 8287151151 or enter your mobile number on Wishfin’s website. Following this, you will get a WhatsApp message from a verified business account “Wishfin CIBIL Score”. You are required to follow the instructions and share your name, date of birth, gender, address, permanent account number or PAN and email.
Mint tried the service, and got the credit score instantly. To get a detailed report, however, you need to log in to Wishfin’s website.
You can get your report, and 12 monthly updates free of cost as of now.
How to get credit reports from other channels?
From credit bureaus: The Reserve Bank of India has mandated credit bureaus operational in India to provide one free full credit report in a year to every individual who requests for it. This will contain all the details that will be reflected in a report that a bank would get when you request for a fresh loan. You can access these reports through the websites of credit bureaus.
From fintech platforms: Fintech companies have tie-ups with credit bureaus to provide reports, mostly free of cost. In return, they get consumer data they use to cross-market products. Some fintech platforms also ask for details like salary and current employer.
Rachel Chitra | TNN | Updated: May 16, 2018, 09:51 IST | Times of India
BENGALURU : Are banks gearing up to reward you for good behaviour? After Bank of India (BoI) and Bank of Baroda (BoB) announced such measures, IDBI Bank on Tuesday said that it will reward good borrowers by giving them differential pricing on their home loan interest rates based on their Cibil scores.
According to Cibil COO Harshala Chandorkar, this could point to a larger trend of “loan interests more aligned towards a carrot-and-stick policy – where good borrowers can reap the benefits of their financial prudence and bad borrowers get weeded out or have to pay steeper rates”.
With all four credit bureaus in India – Cibil, Equifax, Experian and CRIF Highmark – looking at wider coverage and criteria, from whether you paid your electricity bill on time to whether your parents paid off for the bike they got you in college, this score could affect your loan prospects.
In the last few years, with non-banking financial companies (NBFCs) and micro-finance institutions also sending information on borrowers to credit bureaus, lenders now have a wider and more comprehensive data set to assess. This could further widen as Cibil is currently in talks with telecom regulator Trai for access to data on prepaid recharges, and other agencies for utility bill payment history.
Banking analyst Hemindra Hazari said, “The whole point of Cibil assessing a customer’s data is that at some point it should translate into benefits. Corporates are always being graded on their term loans, unsecured debt and convertibles, AAA or BB++ rating, and that gives a better picture of their credit worthiness.”
In IDBI Bank’s case, it will be offering loans at 5-15bps (1 percentage point = 100 basis points, or bps) cheaper for customers whose Cibil score is above 700. A credit score normally ranges between 300 and 900 – based on credit behaviour and repayment history. Therefore, the higher the score, the more the chances of securing a fresh loan. IDBI Bank ED Jorty Chacko said, “We are keen to provide all aspiring consumers with access to credit. But while doing so, it is important to reward those consumers who have exhibited consistent credit discipline through timely payments and responsible credit management.”
But with many customers unaware of the role credit bureaus play and whether decisions taken earlier in life can come back to haunt one, Hazari said, “I am concerned about the privacy of our data. In India, there is a very low premium on methods employed for data collection and aggregation. And also, many a time, your consent is not required before financial institutions share additional sets of information over and above what is mandated.”
Lenders prefer to offer home loans to individuals who have a credit score in excess of 750.
Nikhil Walavalkar | May 16, 2018 09:46 PM IST | Source: Moneycontrol.com
Issuance of a credit card marks the entry into the world of credit for most millennials. The journey that starts with a credit card generally peaks when one opts for a home loan, thanks to sky-high home prices. Obtaining a home loan at an attractive rate is a task for many. But they forget that if one uses a credit card prudently, it can help strike a better home loan deal. Here is how it works.
Lenders prefer to offer home loans to individuals that have a credit score in excess of 750. This score is not built overnight. If a borrower has been repaying the loan on time, it can help build a credit score over a period of time. Here is how your credit card usage aids in building a credit score and obtain a home loan at an attractive rate of interest.
Timely repayment of outstanding
Credit cards allow you to access funds without interest for a stipulated period of time, if you pay the entire bill before the due date. “Failure to pay the bill in full attracts interest but also harms your credit score,” Satyam Kumar, co-founder and CEO of LoanTap Financial Technologies, said.
He advises paying all credit card dues in full before the due date to ensure that the credit score goes up. If possible use standing instructions on your saving bank account, so that the lender debits the bill from your account. If you pay the minimum amount due, even though the banker is not treating it as a default, credit score companies do not take it positively.
If you miss your bill payment once in a while by a couple of days, it may not kill your credit score. But avoid repeating such instances a few months before applying for a home loan.
Credit utilisation ratio
“Keep your credit utilisation ratio low at around 30 percent,” Kumar stated. For beginners, it stands for how much credit one uses out of the allotted limit. It is calculated for each card separately as well as jointly for all cards. For example, if you have two credit cards – A and B – with a credit limit of Rs 1 lakh each. and spend Rs 60,000 and Rs 2,000 on these cards, respectively. Then the credit utilisation ratio for Card A and B stands at 60 percent and two percent, respectively. Jointly it stands at 31 percent. Had the user spread this expenses equally on both cards he would have been closer to the 30 percent mark.
Once in a while this number may go up. But consistently high numbers shows a credit hungry behaviour. If you are using a credit card with low limits, it makes sense to ask your banker to increase the credit limit on the credit card. This will ensure that your credit utilisation ratio falls, if you keep spending a similar amount.
Longevity of your credit card accounts
Credit score gives more weightage to older credit accounts. Longer the repayment history, better is the credit score. Avoid closing your old credit card accounts. Keep using the old credit card and repaying it before the due date helps the credit score.
Personal loans on credit cards
Many prefer to avail personal loans on their credit card to avoid paying a high rate of interest. This move blocks their credit card limit. The borrower is also expected to repay the loan on time. Late payments or defaults on these loans also pull down one’s credit score.
“Be diligent while repaying these personal loans as they are high-cost credit compared to other secured loan options. Also, failure to repay leads to a fall in credit score,” Vishal Dhawan, Founder and Chief Financial Planner at Plan Ahead Wealth Managers, said.
If there is a dispute with the lender pertaining to a transaction or charge on the credit card, do not ignore it. “Sometimes individuals tear the credit card as they are unhappy with the service. However, it does not help. One has to ensure there is no outstanding and formally close it,” Dhawan added.
Opting for a one-time settlement or not paying it up will lead to adverse remarks in your credit report. “If you spot a disputed transaction or a charge on your credit card, it makes sense to speak with the card issuer and follow up for an amicable resolution,” Kumar said.
If you use your credit card prudently, there is a high possibility that your credit score will remain good and you will be offered a better deal.
By Preeti Kulkarni, ET Bureau | May 14, 2018, 06.30 AM IST | Economic Times
Are you feeling tempted to access your credit report for free? Before you rush to share your personal details with a little-known third party in return for the free report, remember you can get it directly from the credit information companies (CIC). You are entitled to receive one report per year from each CIC— TransUnion CIBIL, Equifax, Experian and High Mark. However, third-party fintech portals such as Paisabazaar, Bankbazaar, Creditmantri, etc. offer customers access to more than one free credit report in a year, along with some other services.
“Some fintech firms help consumers understand their credit situation and guide them to improve their credit score. Others help compare and find the best credit card and loan offers based on one’s credit score,” says Manu Sehgal, Head, Business Development and Strategy, Equifax. These are the services that CICs do not offer. Also, as third-party portals do not have any restrictions on how many times you access the credit report, you can take corrective steps quickly, if needed, to improve your credit score.
“Even a small discrepancy in the records or a single day’s default in EMIs or credit card bills has an impact on your credit score. Easier access to credit report allows you to quickly initiate steps with CICs/banks to correct mistakes,” says Navin Chandani, Chief Business Development Officer, BankBazaar.
Approach with caution
Given the recent reports of data leaks and its misuse, should one part with personal information in exchange for free services? Third-parties typically seek PAN, identification, address, mobile number and email details. Also, you will have to give your consent before CICs can share your credit history with a third-party. “We can share credit reports with portals we have partnered with only if the customer consents to it,” says Harshala Chandorkar, COO, TransUnion CIBIL.
Once you give consent, you cannot hold the CIC responsible for any misuse of your information by a third party—so be careful whom you give consent. “If the customer is not diligent and gets lured into giving out his information—PAN, date of birth, mobile—required to get the credit score, he risks misuse of his credit history and other information in the report,” says Chandani.
Additionally, sharing personal details with third parties may invite spam calls and emails. “Read the terms and conditions when accessing the services of these portals and avail services of only the betterknown fintech portals,” says Sehgal.
Before you share your details, verify if the portal has a tie-up with a credit bureau. “The portal should mention the name of the bureau offering the credit report and it should also provide consumers the option to unsubscribe or delete their details from the platform,” says Radhika Binani, Chief Products Officer, Paisabazaar.
S Murlidharan | Mar 12, 2018 14:38:24 IST | First Post
Individuals are supposed to fret and agonise over their credit score awarded by CIBIL (Credit Information Bureau (India) Limited) so that they are not in disfavour with the lending banks and institutions. All payments made by them are passed on to CIBIL which together with three other companies in the same business keeps a running score of the credit behavior of individuals. While the efficacy of the regime is debatable, for which this is not the occasion, what raises eyebrows is the absence of a similar regime for corporates who are by far the heaviest borrowers and defaulters.
What CIBIL does is brought out in its blurb: “TransUnion CIBIL is India’s leading credit information company and maintains one of the largest collections of consumer information globally. We have over 2,400 members–including all leading banks, financial institutions, non-banking financial companies and housing finance companies–and maintain credit records of over 550 million individuals and businesses. Our mission is to create information solutions that enable businesses to grow and give consumers faster, cheaper access to credit and other services.”
To be sure, there is a regime for corporates as well—CRISIL—but that is extremely limited. CRISIL (Credit Rating Information Services of India) and its competitors are credit rating agencies whose services are used by corporates episodically, i.e. when they issue bonds, invite deposits or mobilise funds through commercial papers. To be sure again, it is not as if once these episodic events take place, the role of the credit rating agency is over; it does keep a vigil on the credit behavior of the borrower till the instrument through which funds were mobilized is redeemed or discharged. But the vigil kept by the credit rating agency is not as comprehensive, continuous and all-encompassing as it is for individuals under the CIBIL regime.
Time has come for the banking regulator, the Reserve Bank of India (RBI) to mandate constant monitoring of corporate banking behavior that if anything is more rigorous and thorough than the one for individuals given the enormous stakes involved.
The Punjab National Bank (PNB) fraud perhaps might have been pre-empted had there been a regime such as the one outlined above. Why did PNB scam happen? It happened because Nirav Modi had banking dealings with PNB and not with Axis or Union Bank, to wit. And the RBI has said banks should not entertain requests for Letters of Credit (LoC) unless the borrower had banking relationship with them.
Thus arose the need for an intermediary instrument—letters of undertaking (LoU). LoU assures the stranger-banks, as it were, that the familiar-bank vouchsafes for the creditworthiness of the unknown credit-seeker. Modi got the requisite LOUs forged in collusion with two corrupt Mumbai branch employees of PNB and got the credit from a clutch of Indian banks having foreign branches including Axis and Union Bank. The charade of LOU need not have been enacted had the banks had a CIBIL-like regime under which the banking behavior of Modi with PNB would have been shared with Axis and Union Bank.
Banks in India do come together and share vital information when they form themselves as a syndicate when the loan asked for is too big for their boots in terms of funding required and risks involved. But what is required is a more transparent, general and accessible information regimea la CIBIL.
The comprehensive CIBIL regime for individuals in juxtaposition with absence of a similar regime for corporates smacks of penny-wise pound foolish behaviour. It also gives credence to the long-held view that when you borrow in thousands you are in trouble with the bank but when you borrow in millions or billions, the bank is in trouble. Banks can correct this skew by putting in place a robust monitoring regime of corporate financial behavior that is accessible on real-time basis by everyone having a skin in the game.
(The writer is a senior columnist. He tweets @SMurlidharan)
A high credit score certainly boosts the chances of your loan approval. However, if you fail to qualify on other parameters, even your high credit score will not help.
Published: March 14, 2018 4:37 PM | Financial Express
A high credit score certainly boosts the chances of your loan approval. However, it doesn’t guarantee it. Credit score is just one of many parameters used for credit approval by lenders. If you fail to qualify on other parameters, even your high credit score will not help. Here are the some of the most common reason why loan applications are rejected despite a good credit score:
1. Minimum income eligibility: Most lending products have minimum income criteria for loan applicants. Lenders may also set varying income eligibility criteria depending on your location, i.e. metro, urban, semi-urban and rural areas. As this is often the first filter that lenders apply for processing loan applications, those who fail to meet this criterion are usually rejected outright, even without the consideration of other eligibility factors, such as credit score and EMI affordability. As this criterion may vary across lenders, visit online lending marketplaces to find out the loan options available to you basis your monthly income.
2. Age: Most lenders cap the age of loan applicants at 60 years. This is because monthly incomes usually dip after retirement, which increases of the risk of default. Some credit products may also cap the age by which the repayment has to be completed. For example, most lenders require the borrowers to complete their home loan and loan against property repayment before they turn 70. Those who fail to meet these requirements may have their loan applications rejected. If you too are approaching your retirement age, improve the chances of loan approval by making your spouse or employed children your co-applicants.
3. Frequent job changes: Nowadays it is quite common to frequently change jobs for better career prospects and higher income. However, frequent job changes is considered as a sign of an unstable career and hence, job hoppers are regarded as less creditworthy, especially for longer tenured loans like home loans and loan against property. If you too are planning to avail a longer tenured loan, avoid job changes for some time.
4. Guarantor of other loan: Whenever you become a guarantor to someone else’s loan, you become equally liable for its repayment. Hence, during fresh loan application, lenders will reduce your loan eligibility by the amount of outstanding loan guaranteed. This might lead to the rejection of your loan application. As banks do not allow changes in guarantor(s) unless requested by the borrower himself, ask the primary applicant of the loan to find another guarantor as your replacement.
5. High FOIR: Fixed obligation to income ratio (FOIR) is the proportion of your total income which goes out as EMIs (including the EMI for the new loan application) and other repayment obligations like house rent, insurance premiums, etc. As lenders prefer to lend to those with FOIR of 40-50% or lower, those exceeding it may have their loan application rejected. Hence, those with higher FOIR should prepay their existing loans in whole or part to increase their loan eligibility. Alternatively, opt for lower EMI for the new loan if that contains your FOIR within 40-50%.
6. Job and employer’s profile: Many lenders also consider your job description and/or your employer’s profile while processing your loan application. Lenders prefer government employees and those working with top corporates and MNCs the most due to their higher job certainty, whereas those working with lesser-known or financially-strained companies are less preferred. Employees with hazardous job profile have lower loan approval chances. Consider loans from NBFCs if banks reject your loan application due to your job or employer’s profile.
(By Naveen Kukreja, CEO & Co-founder, Paisabazaar.com)
By Arshad Khan | Express News Service | Published: 04th March 2018 04:45 AM |
NEW DELHI: In the wake of Punjab National Bank scam and numerous other banking frauds detected in the days followed, it became clear that the process of granting loans to borrowers differs for different class of borrowers. While it becomes a nightmare of paper work for borrowers falling in the CBIL minus and CIBIL category, banks mends its ways for the people falling in the CIBIL plus category.
Banking experts say the approach of granting loan to everyone needs to be standardised. Ranjeet Mudholkar, vice-chairman and CEO, Financial Planning Standards Board India, said that banks need to make Cibil score of corporate bodies, mainly the listed ones, public, for the betterment of account and share holders. “Imagine a situation when you know in advance the credit score for Kingfisher, it will not only help rationalise the stock movement of the share holder but also bring a lot of stability in the system. The account holders will also know where their money is going,” Mudholkar said.
He adds that banks will have to become transparent in their working and there is a need to promote financial literacy among account holders. However, the two immediate requirements for a better banking system are far from international standards. In developed nations, accounts holders are much more aware as what is happening with their money, beside having easy available of CIBIL scores.
Another stark contrast is that many account holder in the India are not necessarily its share holder, hence they don’t see a need to know their bank’s working. Financial institutions, too, differentiate between an account holder and a share holder when it comes to revealing information. Even though, account holders are less likely to lose their deposit money in the whole scam episode, there is always a fear that there earning might get impacted, which, has an impact on every stake holder.
It was reported that post the illegal transfer of around $1.8 billion of taxpayers’ money from a single PNB branch in Mumbai, many account holders of the bank closed their fixed deposits in fear of the bank shutting down and they losing their money. A PNB clerk in a Delhi branch said the number of new account openings has seen sharp decline. Share price, too, continues to touch new lows.
But will things change in the way banks function. Mudholkar says that things are pretty much in place for middle class borrowers but for UHNIs, he hasn’t seen change in Bank’s approach yet. “Not taking ratings into consideration while granting loan to corporate bodies should stop and certain guidelines should be followed by banking official. In the absence of this, there will always be a crook who will try to take advantage of an outdated system,” he said.
When checked with a banking official whether they follow the standard norms while dealing while HNIs, she said sometimes they break limited norms while dealing with them as they are ‘valuable’ customers.
“A trust is built between them and bank. At the end of the day we do business and in most cases we know that the money is secured but problem comes in when there are wrong intentions,” she said.