Rajesh was worried when he received a letter from ICICI closing his credit card. Worried, not because he needed the credit card. Worried, because he did not knew that he had that credit card in his name!
Other than being pissed with ICICI for pushing a card down his throat, Rajesh has doubts whether this could impact his credit history.
Rajesh is getting his credit history now and has a detailed post on obtaining credit history from CIBIL. Obtaining credit history costs Rs 142/-
Your credit report gives the loan companies basic information about you, your accounts, and your payment history. In general, it tracks all credit-related activities, although recent activities are given higher weight.
A good credit history can save you thousands/lacs of Rupees in interest charges. How? Well, if you have good credit, it makes you less risky to lenders, meaning they can offer you a better interest rate on loans.
The difference between a 10% loan and a 9% loan for Rs 10 lacs translates to Rs 156710/- over a 20 year period. You may argue that this amount is over a 20 year period and it’s present value would be much less. Yes, but isn’t that a frivolous argument?
I have personal experience of categorizing loanees under three different categories and offering them rates depending on their category. The algorithm that we used was complex, and not very transparent too. With the credit history report available now, the banks are going to use it for sure.
Do get your credit history and take care that you have a good track record. It’s going to pay in future.
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