FLAME Newsletter—November 27, 2013

It is also important for every person to know his or her own credit worthiness as we never know when we will need a loan

November 27, 2013 2:56 IST | India Infoline News Service

"There is no ban on giving loans on credit cards. Don't charge 12 per cent actually and claim that I am charging only zero per cent interest," - KC Chakrabarty, Deputy Governor, Reserve Bank of India 


What do credit ratings mean?

Credit rating is done for debt instruments such as debentures, fixed deposits, commercial papers, bonds, etc. Credit rating is an assessment of the credit worthiness of individuals and corporations. It is based upon the history of borrowing and repayment, as well as the availability of assets and extent of liabilities.

The company which issues debt instruments is called “an issuer” or “issuing company”. The issuer, issues instruments to collect finance from investors. Among other factors, an investor should also look at the credit rating of the debt instrument and the issuer before investing.

Typically, ratings are expressed as letter grades that range, for example, from ‘AAA’ to ‘D’ to communicate the credit rating agency’s opinion of relative level of credit risk. Credit is important since individuals and corporations with poor credit will have difficulty finding financing, and will most likely have to pay more due to the risk of default... Read more

How important is it to track your CIBIL credit score?

It is also important for every person to know his or her own credit worthiness as we never know when we will need a loan. Following are steps to be taken to track your Credit Information Bureau of India (CIBIL) score:

There may be errors in your credit score: The first step in achieving your goal is to get your personalized credit score. When you get your personalized credit score first check if your name, address, telephone and PAN numbers are accurate. Then verify your bank accounts mentioned in the score and also the credit cards and loans being serviced in your name. Report to CIBIL immediately in case of discrepancy. You can log on to CIBIL Website to register a dispute for errors on your credit report...
Read more

Discrepancies in your credit report? Here is what you need to do

Every time you apply for a loan or a credit card, the bank/lender check your credit report for your credit history and information. This report is available with Credit Information Bureau of India Limited, or CIBIL, an Indian company which keeps track of all your credit information. Every time you take a loan, they collect information about your loan amount or repayment records from the lender. But what if the credit report with CIBIL is does not state the correct facts? Here is what you need to do.

You have the right to obtain a credit report from CIBIL. You can get the report online from the bureau’s website for a nominal fee. Log on to the website and fill in the necessary forms with the payment option to get your copy of the report.

Peruse the report to understand everything and check if all your information and credit history is correct. Any wrong information can jeopardize your loan eligibility. If you notice any discrepancy, take it up with CIBIL to correct it... Read more


Credit score below 700 is dangerous for you

The numerical figures of 700 and above are fast forming a superpower club that determine what job you should get, what EMI (equated monthly installments) on your loan you should pay, what should be the interest rate on your loan, your marriage eligibility, phone number eligibility and limit and much more. Whether you are planning to buy a home, a car or even a new credit card, your credit score has immense affect on your loan processing...
Read more


Beneficial Owner: A person who enjoys the benefits of ownership even though title is in another name. Any individual or group of individuals that, either directly or indirectly, has the power to vote or influence the transaction decisions regarding a specific security.


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FLAME (Financial Literacy Agenda for Mass Empowerment) is an IIFL initiative to promote financial literacy amongst the masses in order to make them an integral part of India’s spectacular growth story.

In an era of accelerating GDP and rising per capita growth, financial literacy has become more critical than ever before such that we all reap the tangible benefits of the nation’s economic prosperity. Financial inclusion has been quite high on the governmental agenda, given its emphasis on widening the Banking & Financial services network across the country. IIFL’s FLAME initiative stands committed to complement this effort by helping common people gain financial growth and security though better awareness and education on the variety of financial products while avoiding the lure of and loss from unrealistic claims made by unscrupulous agents and ponzi schemes.

Our objective is to light a FLAME, as the name suggests, which will set ablaze a chain of FLAMEs across the country. The new-found light of knowledge will undoubtedly dispel the dark clouds of financial illiteracy and ensure the bright sunshine of financial growth and prosperity.

This portal is but one of the various IIFL initiatives that would be part of FLAME.

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