With Christmas festivity over, it is the pulse that sets a new beginning starts racing. It is no time for reflection or pondering over the sombre moods and the times when spirits were just below exhilarating. Instead it is time to move and embrace the New Year with faith and joy. It is also the time to set in order priorities that would stand in good stead for you. Here is how you can do to ensure a healthy ‘· Reality check: You have to define where you stand today and where you want to go. List out your loans portfolio and quantify all your loans along with rate of interest on each loan. This will help you identify your position and then define how you want to manage your loans. If you want a clearer picture, then you should go for your credit report.
· Right desires: Just like Santa fulfils all good desires, and never supports your ill wishes, you should also aim for healthy and smart credit profile. Your first and foremost aim should be for a credit score of 750 and more. Secondly, you should try to keep all your loan repayments to the extent of 40% of your net salary. It is vital that you should save at least 25% of your income and take care of your family.
The 40% threshold applies when both these conditions are satisfied. If otherwise, try to bring down your loans substantially. Many argue if Santa gives one gift or two or more. As your family’s Santa you may want to give goodies in the form of a healthy credit profile.
· Buoyant sentiment: Many of us battle with the problem of plenty. Loans are no exception. We carry too many loans on us. This Christmas it is the time to consolidate. Towards the end of the year, banks too float a lot many loans schemes. Beside this, they also waive charges towards processing, and prepayments. Make the most out of it. If your straight faced banker is offering you a good deal on loans give it a serious thought. If you have high cost credit card loans or personal loans transfer them into a loan against an asset. At least convert your credit card balances into a relatively low cost personal loan.
· Be simple: As you reflect the significance of Christmas, you should bear in mind the element of simplicity in the Santa Claus. The simplicity in dress, in gifts and manner of speech makes Santa an endearing angel. You should learn and inculcate this simplicity too. Why not cut many of the unwanted things around you? Some of us have five or ten credit cards, which we hardly use. If you belong to this segment, better keep only two cards and close the rest. Too many credit facilities bring down your credit score, irrespective of whether you use it. Also this virtue of simplicity helps you decide if you want the new electronic gadget or any other item the next time you go shopping. The more objective you become, the better are your chances of not falling into a debt trap.
· Peace of mind: More you are in control of your loans, the better you can control your stress. It becomes easy to live a peaceful life. Effectively you are not just gifting yourself a better credit profile, but you are also gifting yourself peace of mind and overall better life. Because when you start anew, it should not be about trepidation or anticipation about the beginning that should weigh strongly on your mind. It should be about preparations. It should be about precautions. More so, it should be about understanding and bearing in mind: Failing to prepare is preparing to fail.
About the author: Rajiv Raj is the director and co-founder ofwww.creditvidya.com.