7 tips on maintaining a healthy credit score


7 tips on maintaining a healthy credit score

Admin May 12, 2022


It is possible to live with bad credit, but it is not always simple or cost-effective. Having a good credit score can help you save money and make your financial life easier. Credit score is crucial in a lot of ways; hence, it is imperative to know how to:

  • Maintain a healthy credit score
  • Improvise a credit score

Check your credit report regularly

Loans are especially difficult to obtain for people who have no credit history. Even if the loan is approved, the interest rate will be hefty. As a result, having one credit line, such as a credit card, is a reasonable choice for maintaining a credit history.

Here’s why checking credit report regularly is important:

  • Examining your credit score and history might help you to better understand your current financial circumstances.
  • Checking your credit reports on a regular basis might help you become more aware of what lenders may observe.
  • Checking your credit reports can also help you find out if there is any information on your credit report that is incorrect or incomplete.

Availing at least one loan product

If you want to maintain a good credit score, you should take out at least one loan and make timely payments. Borrowing multiple loans at the same time indicates that you are credit-hungry, which lowers your credit score. Hence, to keep your credit score intact, you should opt for at least one loan.

Avoiding late payments

Paying in time is a good habit to get into so that your credit score doesn’t suffer. Also, avoid using your credit cards as much as possible to keep your debt to a minimum.

  • Payment history affects much of your credit score. It has the greatest impact on your credit score. To avoid harming your credit score, it is highly recommended that you pay credit card payments, loan EMIs, and other expenses on schedule.
  • According to a recent study, even a 30-day delay in bill payments can lower your credit score by 100 points. If you wait any longer, your score will decline even more.
  • Delays have a greater impact on your credit score and history if they occur frequently. For up to seven years, the delay is documented in your report.
  • Late payments not only hurt your credit score, but they also cost you money in the form of delay payment charges, higher interest rates, and other fees.

Managing a credit mix

Unsecured loans are commonly thought to be the leading cause of a poor credit score. As a result, use a combination of secured and unsecured credit.

What’s a credit mix?

Types of credit accounts you have are referred to as your credit mix.

  • Depending on the credit scoring methodology utilised, the influence of a credit mix on your credit ratings varies.
  • Lenders and creditors are often interested in how you handled various types of accounts over time.

Simply explained, your credit mix refers to the types of credit accounts you have, such as mortgages, loans, and credit cards. It’s a factor that’s usually taken into account when determining your credit scores, though the weight it receives varies based on the credit scoring model (methods for computing credit scores) employed.

Lenders and creditors, in general, prefer to see that you have a diversified credit mix – that means you’ve been able to appropriately manage several sorts of credit accounts over time.

Credit Utilisation Ratio

Keep an eye on your credit usage ratio as one of the golden principles to follow. It’s the amount of credit you’ve utilized in relation to the credit limit you have available. Experts recommend that you use no more than 30% of your credit limit at any given time.

For example, if your credit card limit is ₹2 lakhs, you should spend about ₹60,000. Your credit score may suffer if you have utilized more than 50% of your credit limit. Lenders will be in wary if you have a lot of credit exposure because it means you’re more likely to default.

Do not close old accounts

Closing old accounts or credit cards is never a good idea because that accounts reflect a long history of debt payments. Before you close any accounts, think about how many you have, how much they cost you, what you use them for, and how they might affect your credit score.

Although canceling an account may save you money in annual fees or lower the chance of fraud on those accounts, closing the wrong accounts can affect your credit score.


Avoid new hard inquiries

You permit the issuer or lender permission to examine your credit report to assess your “creditworthiness” when you apply for a credit card or any other sort of loan (mortgage, vehicle loan etc.).

In other words, your potential lender wants to know if you’ll be able to repay the money you borrowed or not. The better your credit history, the less danger you present, and the more likely you to get approval for that new credit card or loan.

It’s crucial to understand that there are two kinds of credit inquiries. Your FICO (The Fair Isaac Corporation) score is unaffected by soft inquiries such as examining your own credit report. Hard queries, such as applying for a new credit card or a loan, will have an impact on your credit score.

Take advantage of one free credit report every year

The Reserve Bank of India (RBI) has mandated that all credit bureaus in the country give consumers with one free credit report each calendar year since 2017.

The four credit bureaus currently operational in the country are listed below:

  • TransUnion CIBIL
  • Equifax
  • Experian Credit Information Company
  • High Mark Credit Information Service

This implies you have the option of obtaining four credit reports per year. You can also sign up to receive your credit reports, which include your credit score, from any of these bureaus.


Top 5 Benefits of Term Insurance


Top 5 Benefits of Term Insurance

Admin Mar 17, 2022

Every hour, 53 accidents occur on Indian roadways, resulting in the loss of 17 lives. Similarly, every day in the country, 83 individuals drown. With such a high mortality rate, the country should be covered by a wide range of insurance policies. The truth is a little different. A large portion of the population lacks adequate insurance coverage. Low life insurance penetration could be due to complex products and costly premiums. Term insurance policies, on the other hand, can make life insurance affordable to a large number of people.

Term insurance protects your family financially if you are unable to provide for them. In today’s environment, term insurance policies are one of the most significant types of life insurance to obtain.

Term insurance not only protects your family financially in the event of a disaster, but it also saves you money on taxes. You can also take advantage of a number of other advantages that come with term plans.

Take a look at the following list of term insurance advantages.

  • Whole Life Cover

One of the most important term insurance benefits is whole life insurance, which provides total protection for policyholders up to the age of 99 and beyond. If the breadwinner dies, a term insurance policy could help reduce the financial strain on family members.

  • Easy to understand

When acquiring a life insurance policy, it is preferable to have a thorough understanding of the specific terms included in the term insurance policy. Another advantage of term insurance is that it is one of the most simple policies to comprehend. In addition, a term insurance policy is solely a life insurance policy with no investment component. The premium must be paid on time, and the insurance provides coverage for a set period of time with a variety of term insurance advantages.

  • High Sum Assured at an Affordable Premium

The most straightforward sort of life insurance is a term policy. The low cost of term insurance is its most enticing aspect. A term insurance policy, when compared to any other sort of insurance policy, has unquestionably low premiums. The most important rule to remember when buying a plan is to stick to it. The earlier you buy, the lower the premium. Similarly, getting a term insurance policy online is preferable to buying one offline because the rates are lower. Furthermore, checking term insurance benefits online is simpler and more convenient.

  • Critical Illness

Any significant illness can occur at any point in one’s life. Furthermore, the costs of care for severe ailments could quickly deplete the savings. Though life insurance is the most essential term insurance benefit, you can also acquire critical illness insurance, which is frequently included in additional rider options and allows you to avoid paying for medical expenses and depleting your assets. It is critical that you take advantage of this term insurance benefit since you never know what will happen tomorrow, even if you are currently well.

  • Return Of Premium Option

A maturity benefit is not provided by a term insurance policy. However, you can only get a maturity benefit if you choose the return of premium option, which requires you to pay hefty premiums that will be repaid to you once you have completed the policy period. However, the entire amount of premiums that will be reimbursed excludes taxes, rider premiums, any levies, and the modal sum that is paid on the premium. You may also use an online term insurance calculator to get an estimate of the cost with and without maturity benefits, which will help you make an informed decision and assess your needs.

Additional Benefits

Last but not least, the term insurance policy provides tax benefits under two different provisions of the Internal Revenue Code. You can get a tax break on the premium you pay for a term insurance policy if you use Section 80 C. The premium paid up to the maximum limit of Rs 1.5 lakh is exempt from tax. Furthermore, a maturity benefit granted by some term insurance plans, particularly the TROP (Term Return of Premium Plan), is tax-free under Section 10 (10D).

  • Section 80c – You can get a tax break on the premium you pay for the coverage. The premiums paid for term insurance are eligible for tax exemption under Section 80C of the Income Tax Act 1961, up to a maximum limit of Rs.1.5 lakhs.
  • Section 10 (10D) – Under section 10(10D) of the Income Tax Act 1961, the maturity benefit granted by some term insurance policies (particularly the Term Return of Premium Plan TROP) is also eligible for tax exemption.

Accidental Death Benefit

This rider benefit is particularly important because it deals with an unavoidable, irreversible misfortune – the death of the person. As a result, his or her family is left to deal with the sadness while also being under a lot of financial stress. Unexpected medical bills are a huge expense right now, and if it turns out to be fatal, the family will have to manage the death toll as well as future pay. The blow of this two-fold risk of medical bills and permanent loss of pay from the death of the earning member can be softened by the addition of an accidental death benefit rider to the policy.

Why is it crucial to get Term Life Insurance in 2022?

In a nutshell, Term Life Insurance has a number of advantages. It provides more coverage for less money, is simple to understand, and has major tax benefits. However, before you evaluate all of the benefits, keep in mind that the primary objective of insurance is to provide protection rather than financial gain. Term insurance, unlike most other types of life insurance, sticks to this objective.

How to Improve Your Credit Score


How to Improve Your Credit Score

Admin Mar 16, 2022

You may want to focus on boosting your credit now that you know more about the advantages of having good credit. These seven credit-building steps can be useful:

  • Keep track of your credit ratings on a regular basis.
  • Understand the components of a standard credit score.
  • Keep an eye out for any inaccuracies on your credit reports.
  • Find out how frequently you should check your credit reports.
  • Learn how to prevent the most common credit card blunders.
  • Pay your bills on time and keep your credit card balances low.
  • Quick credit score repairs should be avoided.

What formula is generally used to calculate a credit score?

While each credit bureau has its unique model for determining credit scores, there are a few unchanging characteristics that all credit bureaus take into account. The following factors are taken into account:

  • 35 percent payment history
  • 30 percent credit utilisation
  • 15 percent of people have a credit history
  • 10 percent new credit
  • 10 percent credit mix (credit accounts of different types that make up a consumer’s overall credit report)

Requesting a Free Credit Report

Since 2017, the Reserve Bank of India (RBI) has required all credit bureaus in the country to provide consumers with one free credit report every calendar year.

Below are the four credit bureaus currently operating in the country:

  • TransUnion CIBIL
  • Equifax
  • Experian Credit Information Company
  • High Mark Credit Information Service

This means you can acquire four credit reports per year. You can also sign up for any of these bureaus to receive your credit reports, which include your credit score.

Benefits of healthy credit history


Benefits of healthy credit history

Admin Mar 15, 2022

Living with bad credit is doable, but it is not always simple or economical. Having an excellent credit score can enable you to save money and simplify your financial life. If you’re seeking a reason to keep your good credit, consider the following advantages of having a good credit score.

Low Credit Card and Loan Interest Rates

The interest rate is one of the costs associated with borrowing money, and it is frequently linked to your credit score. You’ll almost always receive the best interest rates and spend reduced finance expenditures on credit card balances and loans if you have a strong credit score. The less interest you spend, the faster you’ll pay off your debt and have more money for other things.

A Better Chance of Getting a Credit Card or Getting a Loan

Borrowers with a low credit history are sometimes hesitant to apply for a new credit card or loan since they have previously been denied. Because lenders analyse other variables such as your income and debt, having a good credit score isn’t a guarantee of acceptance. A strong credit score, on the other hand, boosts your chances of getting new credit. In other words, you can confidently apply for a loan or a credit card.

Increased Bargaining Power

With a strong credit score, you can get a better interest rate on a credit card or a new loan. If you need more negotiating leverage, you can use other appealing offers based on your credit score that you’ve gotten from other organisations. Creditors are unlikely to budge on loan terms if you have a low credit score, and you won’t have any other credit offers or possibilities.

Obtain Higher Limits Approval

Your borrowing power is determined by your salary and credit score. Because you’ve demonstrated that you return your loans on time, banks are more willing to let you borrow more money if you have a strong credit score. With a negative credit score, you may still be approved for some loans, but the amount will be limited.

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7 ways to Finance your Business the right way.


7 ways to Finance your Business the right way.

Admin Sep 8, 2021


Starting a business is always tough. One has to check a lot of boxes off in order to get there. The most important and difficult box to check off is FINANCING. How to fund and finance your business is the biggest question that comes to your mind when you think about starting your business. Even Jeff Bezos needs to finance his business from time-to-time, in order to meet the company’s financial goals.

Thinking of ways to finance your business could be a daunting task but we have got you covered. We have compiled a list of 7 ways to finance your business so that you can focus on growing your business and not worry about financing it.

1.  Owner’s Equity – Equity or Preference Share

Owner’s equity is a win-win situation for the company’s owner as well as the investor. The greatest benefit of owner’s equity is that you don’t need to repay the cash. If your business enters liquidation, your investor or financial backers are not creditors. They are the fractional proprietors in your organization and, hence, their invested capital remains invested alongside your organization. If the company makes profits, even your investor gets a share of the total profits.

2.  Unsecured Loan – Family and Friends

Getting financial backing from your friends and family is the best way to commence your business as you won’t be pressurized for the repayment dates. A relative who knows and trusts you might offer you a similar credit at much lower interest rates. Pick an interest rate that is reasonable yet at the same time gives your relative a bonus to lend the money.

3. Term Loan/Working Capital Loan – Financial Institutions

A term loan is a loan which is generally for a longer tenure of 3 years and above. This may be availed for long-term capital expenditure requirements such as the purchase of assets, machinery, deposits etc. A working capital loan aids a business in dealing with short-term liabilities so its long-term objectives can be centered around and accomplished per the needs. Working capital loans are normally simply appropriate to small and medium enterprises and the loan period is for almost 6 months to 1 year which can be availed against primary security: stock or book debts/receivables.

4.    Third-Party Investment – Angel Equity:

Angel investors are high-net-worth HNI individuals who invest in startup ventures in hopes of earning profits. Angel investors sometimes join together in small groups to collectively invest in early-stage ventures. Angel equity is a good way to get capital for your business.

5.    Unsecured Loan – Financial Institutions:

Opting for unsecured loans from financial institutions is better because of quicker and hassle-free processing of funds without the risk of losing the collateral making it easy for the borrower. So if in case you plan to commence a business, do check for unsecured lending from NBFC’s and other financial institutions which normally gives amounts based on various parameters such as credit score, banking transaction, GST transaction etc.

6.    Top-up on Existing Loans – Personal, Housing, etc.:

The significant advantage of the top-up loan is that it can be availed at low-interest rates when compared with an individual or gold credit. The normal personal loan interest rates fluctuate between 11-24%, however for a top-up loan, the interest rates are equivalent to home loan interest rates.

7.    Government Grants:

A government grant is one the best ways to get your business funded. Unlike a loan, you don’t need to repay the grant offered by the government. Small companies and new businesses can think that it is hard to finance their business operations but getting a grant would ease all of their problems. In case of the grant is accessible, the organization would secure their position and might grow eventually without mortgaging its future. All the state governments are providing with various grants & subsidies to support MSME, as that in turn creates a lot of jobs in the state. The central government also has a lot of schemes such as interest subsidy and capital subsidy. One can take maximum advantage of the schemes.


With these financing avenues to choose from at your disposal, you can streamline your business funding and get the operations up and running. Making the decision on how to finance your business can be made after taking several factors into consideration like the amount of funding required, the situation of the credit system, debt calculations and other such factors.

If you are planning to approach the loan options then consider calculating the credit score to make sure about your available options.

Considering your return on investment will also be recommended thus making sure that you are well aware of what you are getting involved with. We, at Ratnaafin are accessible to you and providing financial solutions and guidance at every step, so that you can focus on your project.

Let us know your favorable option of financing your business in the comment section.