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Credit Rating or credit status is an important item that one needs to watch, if he/she is keen to borrow loans or avail credit cards from the market. Lending institutions attach a significant amount of importance to credit status. Here are some tips to help you maintain and improve your credit status. 
<ol>
	<li>
		Basics first. Ensure that you pay your instalment repayments as per the schedule. If you pay late, lender find it unacceptable. This might affect your chances of getting credit.</li>
	<li> If you are using <keyword id="6368202" type="ORGANIZATION" weightage="60" keywordseo="Credit-card">credit card</keyword>s, ensure that the balances on your credit cards are low. Also, if you have a certain limit on your credit card, try to keep your usage of the credit card as low as possible.</li>
	<li> Ensure that you have a good assortment of secured and unsecured credit. Ideally, if you have a <keyword id="6354730" type="UNKNOWN" weightage="60" keywordseo="Home-loan">home loan</keyword>, <keyword id="44700" type="UNKNOWN" weightage="60" keywordseo="Auto-Loan">auto loan</keyword> and some credit cards, with all of them being serviced in time, it should serve you well. But if you just have a large number of credit cards, without any loans, try to close some of them. Credit cards are expensive and hence the lenders would wonder as to why you are using expensive credit. </li>
	<li>
		When you need more credit, think twice before going ballistic about applying to multiple lending institutions. Be judicious in choosing one or at the most two lending institutions to apply. Study and enquire about your best chances of getting a loan or a credit card from an institution and then approach the one where you see the possibility being the best. This is because, every time you apply for credit, an enquiry is triggered to credit bureau and it reflects on your credit report. More the number of enquiries, more is the negative impact on your score.</li>
	<li>
		If you are a co-applicant or a guarantor on a loan, please take personal interest in ensuring that the repayments in those loans are going regularly. If you ignore that and the principal applicant of the loan defaults on the payment, that default will affect your credit score for no fault of yours.</li>
	<li>
		Get your credit report from the credit bureau and review it at frequent intervals. Doing the above things would bring about a gradual improvement in your credit score. And when you look at your credit scores frequently and see them improving, you get to feel good and feel encouraged to improve them further.</li>
	<li>
		Ensure that you credit score is above 750. If for any reason, your current score is below that, work diligently with the help of above tips to gradually improve it and bring it above 750. Keep a record of your credit scores over a period of time. So if you show to a lender that in Jan 2013 your credit score was 650, but the same got improved to 750 by December 13, the lending institution would view this positively.</li>
</ol>
Follow the above tips and maintain good credit health. 
 
(About the author: This article has been written by Mr Brijesh Parnami, CEO <keyword id="2639354" type="UNKNOWN" weightage="60" keywordseo="Destimoney-Advisors">Destimoney Advisors</keyword>) 
 
(Image: Reuters)

10
ways to improve your credit ratings

‘<keyword id="2829572" type="UNKNOWN" weightage="20" keywordseo="Mortgage-Protection">Mortgage Protection</keyword>’ refers to a <keyword id="6406875" type="COMPANY" weightage="20" keywordseo="life-insurance">life insurance</keyword> plan, which covers for the default in a <keyword id="1700193" type="UNKNOWN" weightage="20" keywordseo="mortgage-loan">mortgage loan</keyword> in the event of death of the borrower. This plan hedges the risk of loss, if the borrower dies during the course of the <keyword id="6360217" type="PERSON" weightage="20" keywordseo="Loan">loan</keyword>. This applies as much to an unsecured loan, as to any secured loan. 
 
Talking of mortgage loans, this product becomes more important for the customer than for the lender. The lender has a security of the mortgage of the property, which can be invoked in the case of death and the resulting default. However, the borrower’s family would have a difficult time with the loan, should the death happen and there was no such insurance cover available to repay the loan. Yes, the lenders sell these plans to the customers and earn commission on the sales. But it makes sense for the customer to look at this as something that is meant for his / her benefit. 
 
Under this plan, in case of any eventuality, the redemption insurance amount is directly paid to the lending institution by the insurance company. The money does not come to the nominee. Different types of mortgage insurance plans are offered by different insurance companies in India. The products are structured with single premium and multiple premium options. Typically, these are on reducing cover and the cover size is linked to the loan amount outstanding. The sum assured also reduces along with the liability as on repays the loan. 
 
Be that as it may, what happens if someone is caught in a Loan Trap? A loan trap is a situation, where an individual keeps borrowing from the market. Typically what happens is he / she takes one loan. Thereafter, the income source from where this loan must be repaid gets dried up. Then the customer takes another loan from the market, which is used to repay the first loan. And then another loan from the market which is used to pay the second loan and so on. He remains in debt and this leads to a situation, which is referred to as ‘Loan Trap’. Trapped in the vicious circle of borrowing and repayment. It is worth an effort to know that such a situation could arise and take steps to manage that if at all anyone gets caught in it. 
 
So, if at any point in time, if someone is found caught in a loan trap, he could consider taking the following steps: 
 
1. If the situation is such that income revival is going to take some time, the immediate need is to cut down on wasteful personal and household expenditure. Many people hesitate to do it, thinking that this is a small step. But big things happen when many small steps are taken together. Think of all those extras – movies, restaurants, clubs etc. – which can be cut down but won’t affect the core of your life. Sitting and writing it down would help you come up with a list and which in all likelyhood could be substantial. This can surely help in bringing down your expenses by 5 to 10% in a month. 
 
2. Overmanage your savings bank account: Keep only the bare minimum amount of money in your savings bank account. Whatever amount that you have as surplus over the minimum balance, invest them in alternate, higher interest earning investments. Even fixed deposits are a fine start as they pay more than the savings account. 
 
3. <keyword id="37018" type="UNKNOWN" weightage="20" keywordseo="interest-rate">Interest rate</keyword> structure: Lending institutions have an automated process of resetting of your loan interest rates. And if you do not pay close attention, you may find that your interest rate might have been regularly going up and the interest rate that you are paying currently is far higher than what you signed up for in the beginning. The best thing to do then is to get your interest rate structure modified with the lender, by paying a one-time fee. 
 
4. Build your credit score: The best and easy way to build your score is to ensure that your loan repayments and credit card repayments are always in time. Use your credit card in a very limited manner. For any expense that you incur pay in cash and limit the use of credit card. 
 
5. Take up freelance work: You can always earn some extra money, however small it may be through some freelance work. Browse the net to find out avenues where you can get the type of work that you can deliver. Elance.com is a reliable site for doing freelance work and earning some money. 
 
6. Above all, don’t let any form of depression eat you: It is important to keep oneself motivated and have a positive outlook to the future. Hoping for a better future and taking all possible steps to move towards it, would surely pay. It might test your patience in the short term or the medium term, but would surely benefit you in the long term. So, keep your chin up and look at things positively. 
With a combination of the above steps, gradually, you can come out of the loan debt trap. 
 
(About the author: This article has been contributed by Brijesh Parnami, CEO- Destimoney Advisors.)

Mortgage Protection: 6 ways to come out of a loan trap

Taking <keyword id="6354730" type="UNKNOWN" weightage="100" keywordseo="Home-loan">home loan</keyword> for the first time can be jittery as a number of questions cloud our minds. Doubts like whether it is the right time, if the property is suitable, which bank to seek loan from, etc, keep cropping up. 
 
Some people are almost cavalier when sealing a home loan deal and purchasing a property, and end up realising their mistake of not doing enough homework. 
 
So, one has to be very careful while taking the home plunge, because buying a house is much more than securing a home loan. When you decide on buying a home, make sure you know the long-term implications of your move and your capacity to make repayments. 
 
Here are 7 tips for beginners looking for a first time home buy 
 
-Evaluate your monthly cash flow and assess ways to save more 
Get your basic calculations rights. Make sure you list out your income and expenditure details regularly for at least four months to assess some basic factors like what extra expenditure you can cut, how much money you can save, and how large repayment instalments you can afford. This will not only make accounts clear in your mind but also make it easier to plan your expenses well. Your rented apartment may be bigger than what you need right now, consider moving into a smaller apartment to save on rent. Move in with your parents for a year or two, if possible. Only when you are convinced that you are saving enough and to the best of your potential should you move ahead with a house and loan search. 
 
-Select what you can really afford 
Now that you have a fair understanding of your buying capability, make an assessment of what you can afford. Do not take impetuous decisions while selecting property. Never select a house that will put more financial burden on you than you can carry in your present circumstances. Do not indulge in wishful thinking and assume promotions and appraisals down the years will help you tide in the payments. Apart from affordability, also take into account factors like safety, location, public transport accessibility, among other conveniences. Also factor in the cost potential of the property, whether it promises to surge in value with time. 
 
-Save for down payment and seek help if needed 
It is advisable to save as much you can to make a down payment for the purchase. The more you can pay without a bank loan help, the better it would be for you. Apart from saving some money, sell some assets if needed; or seek help from parents or other willing family members for making a substantial down payment. You won’t need to pay interest back to your family, just the principal some. The lesser loan you take from the bank, the shorter will be the payment course and the lesser the interest payment. 
 
-Check with multiple banks 
Do your homework well. Do not just plunge into a deal with the first bank you speak to. Make sure you go around and compare different deals, different banks are offering. Opt for the best deal available. Sometimes people hurry into a deal with a bank and realise later that another bank could have made a better and more profitable deal. 
 
-Go for loan consolidation 
When people decide to buy a home, they often have another running loan or liability. For example an auto loan which would now run parallel to the home loan. In such circumstances, consolidation of loans is a good option. Nobody likes to pay two EMIs simultaneously; a loan consolidation reduces the amount payable per month resulting in a single monthly payment instead of multiple payments. By consolidating two simultaneously running loans, one would not only reduce the instalments per month but also reduce the rate of interest as compared to what one would be paying on multiple repayments. 
 
-Have at least 3 months payments in your account 
When you activate a loan, you must not be living from paycheck to paycheck. Make sure you have some cushion money in your account to fall back upon. You should have at last three months of payment equivalent money in your account even after making the down payment. 
 
-Have contingency funds 
Some people buy a house without realising the liabilities it will bring. They end up forfeiting the buy, and this harms their credit score. Unforeseen events and exigencies can happen to anybody. One needs to be very careful and always have a Plan B. Make sure there is a contingency fund such as an FD that can be en-cashed on emergency or a PPF fund that can be relied upon in case an unfortunate incident like a pink slip happens. These emergency funds can come in the form of life insurance deposits, FDs, or mutual funds that you have invested in. 
 
(Author of this article is Brijesh Parnami, CEO, Destimoney Advisors) 
 
(Image: Thinkstock)

These 7 loan tips can help first time home buyers. Find out how

MUMBAI: The markets are on a roll, with the <keyword id="6484188" type="CITY" weightage="20" keywordseo="Sensex">Sensex</keyword> and Nifty making fresh life highs, led by gains in banks, auto and energy counters. 
 
The new life high for Sensex is 26,356.24; and that for Nifty is 7,865.85. 
 
The Nifty extended its winning streak for fifth consecutive session and hit an all-time high as FIIs continued to pump in dollars in Indian markets on expectations of pick-up in economy 
 
Sudip Bandyopadhyay, President, Destimoney Securities, is of the view that the market will continue to move upwards. 
 
“A lot of FIIs money is coming out of Russia into Indian markets through BRICS fund. Domestic investors are also entering the market and that is providing support,” said Bandyopadhyay. 
 
At 2:02 p.m.; the 50-share index was at 7,860.95, up 69.25 points or 0.89 per cent. It touched an all-time high of 7,865.85 and a low of 7,779.20 in trade today. 
 The S&amp;P <keyword id="35140" type="CITY" weightage="20" keywordseo="BSE">BSE</keyword> Sensex was at 26,340.82, up 237.59 points or 0.91 per cent. It touched an all-time high of 26,356.24 and a low of 26,075.28 in trade today. 
 
Sandeep Tandon of Quant Broking is of the view that market went through consolidation in the last three months. It is light at the moment and looks set for next leg of upmove. 
 
The CNX Midcap Index rallied 1.27 per cent and the CNX Smallcap Index surged 2.10 per cent. 
 
Among the sectoral indices, the CNX Bank Nifty was up 1.49 per cent, the CNX Auto Index gained 1.02 per cent, the CNX Energy Index rose 1.42 per cent. 
 
The CNX FMCG Index was down 0.75 per cent and the CNX IT Index slipped 0.51 per cent. 
 BPCL (up 5.25 per cent), <keyword id="6355975" type="CITY" weightage="20" keywordseo="Axis-Bank">Axis Bank</keyword> (up 3.11 per cent), <keyword id="45008" type="CITY" weightage="20" keywordseo="Tata-Power">Tata Power</keyword> (up 3.04 per cent), BHEL (up 2.91 per cent) and Tata Motors (up 2.87 per cent) were among the major Nifty gainers. 
 
ITC (1.92 per cent), Infosys (1.01 per cent), HCL Tech (0.80 per cent), HDFC (0.70 per cent) and TCS (0.68 per cent) were among the index losers. 
 
The market breadth was positive on the NSE with 1090 gainers against 425 losers. 
 
Foreign institutional investors were net buyers worth Rs 625.18 crore and domestic institutional investors were net buyers worth Rs 135.75 crore on Thursday as per the provisional data from the National Stock Exchange. 
 
D-Street highlights @ 2 pm 
 
Cairn India: Plan pipeline to connect field to Gujarat gas grid 
 
Cairn India: Sees significant gas volume potential in Rajasthan 
 
Cairn India: Raageshwari deep field may hold 1-3 TCF gas 
 
ET NOW ALERT: Top Gainer On CNX Small Cap Index Alok Inds Price:12.3 Change: +1.35 Percent Change: +12.33% 
 
ET NOW ALERT: Up For 2nd Day CNX SMALL CAP Price:4979.95 Change: +118.3 Percent Change: +2.43% 
 
ET NOW ALERT: Top Gainer On CNX 200 Index AIA Engineering Price:844 Change: +56.6 Percent Change: +7.19% 
 
Sources Say: JSW Energy in talks to buy Bina, Nigrie power assets of JP Power 
 
Sources Say: JSW Energy says: Continue to evaluate opportunities 
 
Sources Say: Bina Power Plant's EV is pegged at around Rs 3,500 cr 
 
Sources Say: Alert: JP's Nigrie Thermal Power project to have capacity of 1,320 MW 
 
ET NOW ALERT: All 12 lenders in Bank Nifty post gains
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Tata Motors To ET NOW: Plan to increase exports by 25% over the next 3 years 
 
Tata Motors To ET NOW: Co to launch 25 new commercial vehicles in FY15 
 
Tata Motors To ET NOW: Will spend Rs 1,200-1,500 cr this fiscal on new product development 
 
Tata Motors To ET NOW: Expect FY15 M&amp;HCV sales to be 10% higher than last fiscal 
 Adrian Mowat: <keyword id="16898" type="PERSON" weightage="20" keywordseo="Spike">Spike</keyword> in crude oil prices can derail India's growth story 
 
ET NOW ALERT: Hits Fresh Record High SENSEX Price:26297.42 Change: +194.19 Percent Change: +.74% 
 
Adrian Mowat: Underweight on consumer staples, defensive stocks 
 
Adrian Mowat: India's divestment programme has potential to take mkt higher 
 
@ 1 pm 
 
Quant Broking: Bullish on IT stocks on good US economic recovery 
 
Quant Broking: Not optimistic on auto stocks currently 
 
Quant Broking: Positive on mid-cap pharma, cement stocks 
 
Quant Broking: Bullish on pharma, cement, IT banks, PSU oil &amp; gas stocks 
 
Quant Broking: Market is poised for next leg of the bull rally 
 
ET NOW ALERT: Hits Fresh Record High NIFTY Price:7840.3 Change: +48.6 Percent Change: +.62% 
 
JUST NOW: Harsh Mariwala raises stake in Marico Kaya to 2.21% from 1.94% 
 
Atlanta: Signed an agreement with Gujarat Govt to set up entertainment city 
 Fin Min Sources: Alert: In 2008, UTI AMC deferred <keyword id="6354763" type="EVENT" weightage="20" keywordseo="IPO">IPO</keyword> plans 
 
Fin Min Sources: Alert: SBI, BoB,PNB,LIC currently hold 74% stake in UTI AMC 
 
Fin Min Sources: SBI, BoB, PNB to seek board approval to cut stake in UTI AMC 
 
Fin Min Sources: Government looking to list UTI AMC 
 
@ 12 pm 
 
Edelweiss Financial: Q1 IIP growth has been at 4%, indicating a sharp pick up 
 
Edelweiss Financial: Expect exports to grow at 7-8% on a monthly basis 
 
Edelweiss Financial: Need to monitor export demand from US, Europe &amp; Japan 
 
Edelweiss Financial: Trade deficit is not a concern at current juncture 
 
Edelweiss Financial: Agri output remains weak due to delayed monsoon 
 
Edelweiss Financial: Lower crude oil prices will help inflation to cool off as well 
 
Edelweiss Financial: Crude oil prices correcting is positive for twin deficits 
 
Mythili Bhusnurmath: IEA has stated oil consumption may be lower than last year 
 
Mythili Bhusnurmath: Most economic data is within consensus estimates 
 
Mythili Bhusnurmath: Economic data in Q1 has not been disappointing 
 
Mythili Bhusnurmath: Expect EXIM policy to be announced by end of the month 
 
Reliance Comm: Expect to bring down debt by another Rs 10,000 cr 
 
Reliance Comm: Net debt to EBITDA ratio to be below 2.5-3 levels 
 
Reliance Comm: Thrust on CDMA biz has helped achieve a turnaround 
 
Reliance Comm: Had a healthy revenue growth of Rs 4,571 cr, up 2% QoQ 
 
Reliance Comm: Net debt on books at Rs 35,500 cr from Rs 40,000 cr previously 
 
Reliance Comm: Raised Rs 6,100 cr in Q1 via QIP; Promoters invested Rs 1,300 cr 
 
@ 11 am 
 
Meghmani Organics: Have completed investments in capex for FY15 
 
Meghmani Organics: Aim to grow by 25% in topline &amp; bottomline in FY16 
 
Meghmani Organics: PAT likely to be around Rs 55 cr in FY15 
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Meghmani Organics: Expect a topline of Rs 1,550 cr &amp; EBITDA of Rs 250 cr for FY15 
 
Meghmani Organics: Target a business of Rs 600 cr for agro chemicals segment 
 
ET NOW ALERT: 1.21 Lk Shares Trade In A Block Axis Bank Price:382.7 Change: +4.9 Percent Change: +1.3% 
 <keyword id="6358584" type="CITY" weightage="20" keywordseo="HSBC">HSBC</keyword> AMC: Constructive on select financial stocks 
 
HSBC AMC: NPAs for banks will remain a overhang till economy recovers 
 
HSBC AMC: Expect a real change in economy only by 2015 
 
ET NOW ALERT: 50,000 Shares Trade In A Block Ambuja Cem Price:214.85 Change: +3.95 Percent Change: +1.87% 
 
HSBC AMC: Recommend being invested in quality stocks 
 
HSBC AMC: Will remain selectively invested in consumer stocks 
 
HSBC AMC: Oil &amp; gas stocks will move up if under-recoveries continue to fall 
 
HSBC AMC: Upside in auto stocks seem to be overstated 
 
HSBC AMC: Will adopt a wait &amp; watch strategy on oil &amp; gas stocks 
 
RCF Says: Need to look for overseas JVs for phospahtic fertiliser 
 
RCF Says: Govt is looking at restarting urea plants which have shutdown 
 
RCF Says: Gas availability &amp; pricing issues need to be sorted for fert sector 
 
@ 10 am 
 
Reliance Capital: Waiting for all bank licence guidelines before applying 
 
Reliance Capital: Expect profit growth of 15% to continue for AMC biz 
 
Reliance Capital: Commercial finance loans have grown by 10-11% on YoY basis 
 Reliance Capital: Premium growth in general <keyword id="35450" type="COMPANY" weightage="20" keywordseo="insurance">insurance</keyword> at 11% in Q1 
 
Adi Godrej: Govt's reforms need to be implemented quickly 
 
Adi Godrej: Hope GST is implemented by April 2015 
 
Adi Godrej: PM Modi's August 15 speech will have an impact 
 
Dimensions Consulting: Have been building position in Reliance Infra 
 
Dimensions Consulting: Jubilant Foods is an expensive stock at current levels 
 
Dimensions Consulting: Prefer Indian Oil &amp; BPCL to ONGC 
 
Dimensions Consulting: Remain bullish on Pharma, FMCG, IT sectors 
 
Dimensions Consulting: Will focus on quality stocks which aren't highly leveraged 
 
ICICI Direct: Prefer TCS to Infosys at current juncture 
 
United Bank: Bank consolidation will be positive for the sector 
 
ICICI Direct: New management of Infosys will be positive for stock 
 
United Bank: Bhushan Steel remains a standard account 
 
United Bank: Bankers to meet on Bhushan Steel loans today 
 
United Bank: Set a target of Rs 1,200-1,300 cr for recovering bad loans 
 
ET Now spoke to various experts and here's what they have to recommend for today's trade: 
 
Ashwani Gujral of ashwanigujral.com 
 
Yes Bank Ltd is a 'BUY' call with a target of Rs 575 and a stop loss of Rs 540 
 
Bharat Forge Ltd is a 'BUY' call with a target of Rs 790 and a stop loss of Rs 766 
 
IndusInd Bank Ltd is a 'BUY' call with a target of Rs 575 and a stop loss of Rs 540 
 
RIL Ltd is a 'BUY' call with a target of Rs 1040 and a stop loss of Rs 990
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Sandeep Wagle, Founder &amp; CEO, Power My Wealth 
 
Yes Bank Ltd is a 'BUY' call with a target of Rs 575 and a stop loss of Rs 544 
 
BPCL is a 'BUY' call with a target of Rs 688 and a stop loss of Rs 623 
 
AIA Engineering Ltd is a 'BUY' call with a target of Rs 910 and a stop loss of Rs 826 
 
Tata Motors Ltd is a 'BUY' call with a target of Rs 528 and a stop loss of Rs 480 
 
Prakash Gaba, CFT, prakashgaba.com 
 
HDFC Bank Ltd is a 'BUY' call with a target of Rs 845 and a stop loss of Rs 825 
 
Tata Motors DVR is a 'BUY' call with a target of Rs 370 and a stop loss of Rs 345 
 
ZEE Entertainment Ltd is a 'BUY' call with a target of Rs 285 and a stop loss of Rs 273 
 
Abhishek Karande, CMT, Technical Analyst - Institution Research, SBICAP Securities 
 M&amp;M <keyword id="6354241" type="COMPANY" weightage="20" keywordseo="Financial-Services">Financial Services</keyword> Ltd is a 'BUY' call with a target of Rs 300 and a stop loss of Rs 248 
 
HPCL is a 'BUY' call with a target of Rs 465 and a stop loss of Rs 409 
 
UltraTech Cements Ltd is a 'BUY' call with a target of Rs 2850 and a stop loss of Rs 2610 
 
Mayank Mehta, Derivative Analyst, KIFS Securities 
 
IndusInd Bank Ltd is a 'BUY' call with a target of Rs 575 and a stop loss of Rs 525 
 
Hero MotoCorp Ltd is a 'SELL' call with a target of Rs 2450 and a stop loss of Rs 2600 
 
Lupin Ltd is a 'BUY' call with a target of Rs 1225 and a stop loss of Rs 1150 
 
A K Prabhakar, Independent Market Expert 
 
L&amp;T Ltd is a 'BUY' call with a target of Rs 1600 and a stop loss of Rs 1480 
 
Yes Bank Ltd is a 'BUY' call with a target of Rs 610 and a stop loss of Rs 538 
 
Rallis India Ltd is a 'BUY' call with a target of Rs 254 and a stop loss of Rs 214 
 
(Views and recommendations expressed in this section are the analysts' own and do not represent those of EconomicTimes.com. Please consult your financial advisor before taking any position in the stocks mentioned.)

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10 ways to improve your credit ratings

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These 7 loan tips can help first time home buyers. Find out how

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