Good Banking Record, Credit History
or Bank History & its Effects
This article is helpful for those, who want to raise
any type of loan like Personal Loan, Business Loan, Loan Against Property(LAP),
Education Loan, House Loan, Agriculture Loan, Credit Card or to offer any type
of guarantee or to have a good track record for future borrowing from bank,
NBFC ( Non-Banking Finance Company) or other financial institution.
Anyone would like to have good record in every field
whether it is personal or non-personal. The reason for this is to build good
relationship and enjoy the benefit in future. Any negative feedback in track
record will have adverse effect on future relationship. Similar is the case
with financial institutions, banks or NBFCs.
The relationships
with these institutions are of two types i.e. for credit/ loan purpose or for
deposit purpose. Banks generally welcome the deposit without any hassle or even
reward with different kinds of benefits or privileges but in case of credit
these banks and other institutions are very cautious. This is necessary because
bank advance the depositors money to earn interest on it for payment of
interest to depositor and to earn profit.
Credit is
an important need to a person or businessmen to meet the personal and business
requirement. But if the loan case declined, it has a very depressing impact on
personal and business front and force the needy to borrow funds at high rate of
interest which disturb the financial position.
The decline
of loan case may be of different reasons, but the most common is the
unsatisfactory bank record or credit history. This might be in the knowledge of
applicant of loan or not. A small mistake or negligence cost dear.
Now almost
all the banks or financial institutions are well connected through networking
and data can be accessed from anywhere. There are specialized hubs which stores
the data of every individual and banks can easily access the data from there
hubs. If there is any discrepancy in saving account like non maintenance of
minimum balance in account, bouncing of checks, unpaid installments of loans,
penal interest applied on earlier or other loan account, delay in payment of
credit card bills or any other utility payments it shows bad match when query
is raised. This ultimately results in decline of loan case.
These
negative match are sometime intentional and sometime non intentional. In India
this data is stored in CIBIL or in banks internal de-dupe. When the applicant
is aware of his credit rating or banking track record, then he/ she should
forward the application for loan. In case it comes to the knowledge of
applicant regarding bad credit history, it should be rectified first. To update
the record in CIBIL, application should be filed to update the credit record
and after ensuring its correctness, case should be forwarded to bank for
further processing.
It is also
advised that one should maintain his/her banking history well. Timely repayment
of loans, credit card bills and other utility bills should be ensured. The saving
bank account statement or passbook should be checked regularly and any
discrepancy should be rectified within time. Financial literacy should be
ensured in this connected world, who knows when the need for finances arises at
the once. A small mistake will affect the future of child if educational loan
is declined or will shatter the dreams of own home if home loan is not
approved.
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