Debt Management – How to Manage Your Debts Effectively

Debt Management – How to Manage Your Debts Effectively

Financial responsibilities and obligations keep cropping up from time to time. Some are planned while others are unplanned. For most of your financial responsibilities you plan and save in advance and yet sometimes your savings might not prove sufficient. Moreover, if an uncertain expense comes up, you might need additional funding to meet the financial obligation that you face. This is where loans come into the picture.



What are loans?

Loans are a source of funds which you can avail from financial institutions like banks and non-banking financial companies. The loan allows you a lump sum fund at a specific rate of interest which is fixed by the lender. Thereafter, you can choose the repayment tenure over which you can repay the loan in small and affordable instalments.

Types of loans

Banks and financial institutions offer a range of loans which can be availed for different financial needs. Loans can be broadly divided into two categories –

types of loan

Secured loans are secured against an asset while unsecured loans are not. Unsecured loans are offered based on your financial status and secured loans are offered based on the value of the asset against which they are secured.

Some of the commonly available secured and unsecured loans include the following –

Type of loan Meaning
Personal loan Unsecured multipurpose loan for financing various personal or commercial financial needs
Vehicle loan Secured loan to buy a vehicle
Education loan Secured loan to fund higher education
Consumer loan Secured loan to finance the purchase of consumer durables
Home loan Secured loan to purchase a home or a plot of land
Business loan Secured or unsecured loan to meet the financial needs of a business


Moreover, loans can be categorized as good loans or bad loans. Bad loans are those which have a high interest rate and severely impact your credit score in case of defaults. Good loans, on the other hand, are those which build up a good credit score and also offer tax benefits.

Important aspects of a loan

Here are some of the main components of a loan which you should know about –

  • Loan amount or principal

This is the amount of loan which you borrow from a lender.

  • EMI

EMI means Equated Monthly Instalment. This is the amount of money which is payable every month to repay the loan. The EMI consists of a part of the principal amount of the loan and the interest payable thereon. With each EMI paid the loan amount reduces.

  • Repayment cycle

The loan that you avail should be paid back within a specified duration. This duration, over which the loan is repaid, is called the repayment cycle of the loan. The lender specifies the minimum and the maximum repayment tenure that is available for the loan. You, as a borrower, then, can choose the repayment cycle as per your affordability.

  • Rate of interest

Rate of interest is the interest charged by the lender on the loan amount that you have availed. The interest is calculated on the outstanding balance of loan and the amount reduces after each EMI payment.

EMI calculation

The EMI of the loan is calculated taking into consideration the principal, the rate of interest and the repayment cycle of the loan. Here’s how these factors impact the EMI –

  • Principal – Higher the principal of the loan, higher would be the EMI
  • Rate of interest – Higher the rate of interest, higher would be the EMI
  • Repayment cycle – Longer the duration of the repayment cycle, lower would be the EMI

You can choose the principal and the repayment cycle but the rate of interest is determined by the lender. You can calculate the EMI before availing the loan to ensure that the EMIs are affordable and can be repaid easily.

Use our FREE EMI Calculators that will help you to calculate the EMI and it’s easy to understand.

Credit cards – a type of unsecured loans

Credit cards are quite popular among individuals for financial transactions. But did you know that credit cards are a type of personal loan?

Credit cards allow you to buy first and then pay later. There is a billing cycle and the entire transactions done within the cycle are payable within a due date. If you pay the entire outstanding amount within the due date, no interest is charged. However, if you don’t pay the amount or pay partially, interest is charged on the outstanding balance as well as on credit transactions done in the next billing cycle too.

Credit cards have high interest rates and can prove to be a bad loan if you don’t pay your bills on time. However, on the positive side, credit cards allow reward points and other benefits on your transactions. So, if you use a credit card wisely, it can prove to be a good tool.

Management of credit card debts

To ensure that credit cards give you the best benefits, you need to manage their usage. Let’s understand how –

The concept of MAD and revolving credit

Credit cards allow you a revolving credit facility wherein you can carry forward your outstanding credit card balance to the next subsequent months. For this revolving credit benefit, there is a limit of Minimum Amount Due (MAD). MAD signifies the minimum credit card due which you should pay in the current billing cycle to avail the revolving credit facility. Once the MAD is paid, the remaining credit card bill can be revolved to the next month.

Paying off MAD, though convenient, is not recommended. It is because the amount that you carry forward to the next cycle attracts interest. Since credit card interest rates are high, you tend to accumulate considerable interest expenses on the revolved credit. Moreover, if the credit is revolved, you also attract interest on the amount spent on the card in the next billing cycle from the first date of the cycle. This is also disadvantageous. Thus, you should not revolve your credit and pay the entire amount of your credit card debt within the due date.

To pay off your credit card debt, here are some tips which you can use –

  • Using your income and/or your savings
  • Converting the debt into affordable EMIs
  • Availing a personal loan
  • Using your investments


Personal loans – the most popular loans

Personal loans are quite popular among individuals as they are unsecured, easily available and allow funds for different uses. However, these loans have a high interest rate and affect the credit score adversely. So, here are the best practices and mistakes of availing a personal loan –


loan best practices

Read a complete guide on personal loan for salaried individual


Credit score – an important aspect

The credit score is a measure of your creditworthiness. It tells the lender how likely you are to repay a loan that you avail. The score ranges from 300 to 900 and the higher the score you have, the better would be the chances of getting a loan easily.

Your credit score is calculated by authorized credit bureaus like Equifax, CIBIL, etc. It is calculated taking into consideration the following factors –

  • Repayment history – if you have no repayment defaults, the score would be high
  • Credit mix – if you have a good mix of secured and unsecured loans, your score would be high
  • Credit utilisation – the lower the credit that you have availed, the higher would be your score
  • Credit history – if you have a good history of credit, your score would be high


How does loan impact your credit score?

The availability of loans solely depends on your credit score. The score tells the lender of your repayment risk and thus they consider the score before sanctioning the loan. Loans are usually allowed if you have a credit score of 600 or 650. For lower scores, loans are rejected. A score of 750-900 is the best score to get a loan easily.

Understand the loans available, how they work and how you can manage them to your advantage. Loans can prove to be a good source of funding your needs and if you manage them well you can avail and repay the loan easily. For a complete guide on management of debt, you can go through this financial planning course and get the complete knowledge on how to manage your liabilities to the best of your advantage.

Benefits of online trading of stocks

Benefits of online trading of stocks

The online platform has simplified the way we do transactions. From buying groceries to buying a car, everything can be bought online. Stocks are no different. You can buy and sell stocks through the online platform easily without any hassles. The online purchase and sale of stocks is facilitated through online trading. Let’s understand what online trading is all about and why it is beneficial –


What is online trading?

Online trading means buying and selling stock through an online portal. This online portal is offered by stockbrokers. Online trading of stocks is done in real-time and there is no paperwork involved. You can simply buy or sell the stock with the click of a button either on your laptop or on your Smartphone.

What are the benefits of online trading?

Online trading has become very popular nowadays because of the various benefits that it has. These benefits include the following –

1. Online trading is convenient

The best feature about online trading of stocks is that it is convenient. You don’t have to physically visit a stockbroker to buy or sell stocks. Some simple clicks of a button and you can trade in stocks as per your time and convenience. You just need an online account, an internet connection and a computer or a Smartphone and online trading would become simple and quick.

2. It costs less

Trading online saves on the costs involved in buying and selling stocks. When you trade online the commission payable to stockbrokers is low thereby helping you to save on the brokerage costs.

3. You can manage your investments easily

Your entire stock portfolio is at your fingertips on your online trading account. You can, therefore, assess and review your investments, buy or sell stocks, check the performance of your portfolio and then manage your investments as per your strategy with ease and convenience. This helps you to maximise your profits and reduce your losses.

4. You can control your stock portfolio

When you trade online, the record of your transactions is also available online. You can, therefore, have complete control over your portfolio. You can buy and sell any time that you want to as per your preference without having to depend on the broker and without any interference.

5. You can do instant transactions

Online transactions are done in real-time and as such, are instantaneous. The financial transactions are done instantly avoiding the risk of market fluctuations between the time that you initiate the buying or selling process until the time that the trade is carried out.

6. You get research reports for a better understanding of the stock market

When you have an online trading account, regular research reports are sent to you to give you an insight into the market. These reports are curated by experts and contain recommendations and analysis of different stocks based on their performance over the period. These reports, therefore, give you priceless knowledge about the nuances of the stock market and make you experienced in the art of online stock trading.

How can you trade online?

If you want to trade online, there is a process which you can follow. This process involves the following steps –

1. Learn the basics of the market

Plunging into stock trading without proper knowledge of the market is like appearing for an examination without any preparations. Stock trading is a risky activity and unless you have knowledge of the way the market works, you can incur considerable losses. So, understand the basics of the market before you start trading in the stock.

2. Choose the broker

Trading on the stock market is possible only through stockbrokers who are registered with SEBI (Securities Exchange Board of India). You cannot trade yourself and so you should find a registered broker who is registered on all exchanges through which you can trade in stock.

3. Open a demat account and a trading account

Just like you need a savings account to deposit and withdraw money from a bank, a demat account and a trading account are needed for stock trading. A demat account is like a locker which stores the stocks which you buy online in dematerialized format. The stocks held in a demat account can be traded online. A trading account, on the other hand, is an account through which you can trade in stocks. Thus, buying and selling of stocks would be done through a trading account while the purchased stock would be held in a demat account. Thus, the first step in online trading is to open an online demat and trading account.

4. Trade

After you have learnt the basics of the stock market, selected the broker and opened a demat and trading account, you are ready to trade. You can buy and sell stocks as per your choice by clicking on the ‘Buy’ and ‘Sell’ button on the broker’s platform.

5. Get the settlement of securities

After you have completed trading, there would be a settlement of securities bought or sold during your trading activity. If the securities have been bought, they would be transferred to your demat account and if you have sold securities, such securities would be transferred out of your demat account. The transfer of securities after the end of the trading day is called settlement.
Settlement of securities can be done in two ways which are as follows –

a. On spot settlement:

Under this settlement, the transfer of securities is done immediately. The time period for settlement would be on a T+2 basis which means that for trading done on a particular day, the settlement would be done within two days of such trading. So, if you trade on Monday, the settlement of the securities bought or sold would be done by Wednesday under on spot settlement.

b. Forward settlement

As the name suggests, the forward settlement means that settlement of securities is done at a later date. This later date can be on a T+5 basis, T + 7 basis and so on. So, for trading done on Monday if the forward settlement basis is T + 5, the settlement of securities would be done by Friday.

Documents required for online trading

To trade online you would have to open a demat account and a trading account with an online broker. This account can be opened only if you submit your documents to the broker. The documents which would be required to be submitted include the following –
a. PAN Card
b. Aadhaar Card
c. Address proof like utility bills, registered rent agreement, sale deed of the property, passport, Aadhaar card, Voter ID Card, driving license, etc.
d. Bank details which include your bank statement of the last 3-6 months and a cancelled cheque of your bank account through which you want to trade
e. The mobile number which should be linked to your Aadhaar card
f. Passport-sized photograph

Once the documents are submitted with the broker, they would be verified and if everything is found to be in order, your online demat and trading accounts would be opened allowing you to trade online.

Documents issued by the broker

When you trade with your broker, your broker is also required to issue certain documents to you. These documents include the following –

1. Contract note

A contract note is issued by your broker that shows your trading activities done on a particular day. The broker would issue a contract note within 24 hours of the completion of the trading activity and the contract note allows you to keep track of the trading that you have done.

2. Statement of funds

Your broker would also issue you a statement of funds showing the valuation of the stock held by you on a particular date. Statements of funds are sent either monthly or quarterly depending on the practice of the broker.

Things to remember before trading online

If you are a beginner in the stock trading domain, there are some things which you should remember before you start trading. These things are as follows –

A. Make a trading plan

Before you start trading, research the stocks in which you are interested and make a proper trading plan about the money that you would use to invest in stocks or the stocks which you intend to sell. Trading of stocks should be premeditated and should not be done on an impulse. Use research analyses, get recommendations from your broker, talk to your financial advisors and then plan your trading activity so that you can navigate the market fluctuations easily and without panic.

B. Use stock simulators before trading in reality

There are online stock simulators which allow you to practice trading before you actually start trading online. Practice your trading skills on simulators to understand the mistakes that you are making. Mistakes on simulators would cost nothing but if you end up making trading mistakes when you are actually trading, the consequences would be financially disastrous.

C. Invest what you save

While stock trading can promise good profit, it can result in substantial losses too. Stock trading is volatile and risky in nature and so you should only use your savings to invest and trade in stocks. Don’t make the mistake of borrowing for the purpose of investing and making a profit. You might fall in a debt trap. Risk only what you can afford losing so that even in a loss you don’t suffer financial consequences.

D. Be disciplined

As mentioned earlier, stock trading is volatile. Don’t let your emotions control your trading behaviour. Be disciplined when trading online. Ups and downs are a part of the game and don’t let them affect your trading. If your stocks suffer a loss, be patient for the market to correct itself. In case of a bullish market rein in your emotions and do not invest more than your savings.

The 3-in-one account for online stock trading

You now know that you need to open a demat account and a trading account to do online trading of stocks. Moreover, there is a need for bank savings account too which allows you to pay for your stock purchases and receive credit for the sale of stocks. Keeping these requirements in mind, a 3-in-one account has become quite popular in the trading world. The 3-in-one account combines a savings account, trading account and a demat account in one. It allows easy transfer of funds to and from your bank savings account to your trading account for your trading activities. Some common features of a 3-in-one account are as follows –

  1. Banks offer these 3-in-one accounts to their existing as well as new customers
  2. A brokerage is charged based on the transactions done using the account. The brokerage is either expressed as a percentage of the transaction value or it depends on the number and value of trading transactions that you do
  3. Many banks not only allow stock trading through their 3-in-one accounts but also trading of mutual funds, IPOs, derivatives, etc.
  4. Investment advise and recommendations are also offered by banks to their 3-in-one accountholders
  5. The brokerage charged for a 3-in-one account is usually higher than the brokerage charged by stockbrokers

How 3-in-one accounts work?

In a 3-in-one account, you get one trading account, one savings bank account and one demat account. When you do online stock trading and place an order to buy stock, the amount of money required to buy the stock gets debited from the bank savings account. This money is, then, used to purchase stock and the purchased stock gets added to your demat account. Alternatively, when you want to sell your stock, you place a sell order and sell your stocks through your trading account. This sale results in the withdrawal of the stock from your demat account and credit of the sale amount to your bank account. Thus, one single account provides you seamless facility of stock trading by handling your money, stocks and trading activities through the bank account, demat account and trading account respectively. Furthermore, since a 3-in-one account is offered by a bank, you can use the account as a regular bank account. You would be issued a debit card and a cheque book allowing you to deposit or withdraw money from the 3-in-one account as and when you want without any restrictions.

Benefits of 3-in-one accounts

The benefits of 3-in-one accounts have been stated in the way these accounts work and their inherent characteristics. However, here is a quick look at the benefits which 3-in-one accounts offer –

  1. Since 3-in-one accounts contain three separate accounts which are essential for online stock trading, they eliminate the need of opening a demat account, trading account and a bank account separately
  2. They give you a single platform to trade online without having to link your bank account to your trading and demat account separately
  3. You can trade easily and conveniently as the trading activity gets coordinated within the different accounts of the 3-in-one account in real-time
  4. Banks offering 3-in-one accounts also offer expert advice to their account holders so that they can get the maximum benefit of the stock market
  5. Regular account updates and statements are sent to account holders enabling them to monitor and assess their transactions
  6. Since 3-in-one accounts also work like a bank account, they allow account holders the flexibility of using the accounts as their bank accounts without having to open a new bank account
  7. 3-in-one accounts serve multipurpose needs and are, therefore, suitable for online traders

Online stock trading is an easy way to trade on the stock market. It also helps you and your employees maximize their wealth. So, learn and educate your employees about the different aspects and benefits of online trading so that you and your employees can gain the benefits of stock trading with minimal efforts.

How to budget your monthly spends in 2020

How to budget your monthly spends in 2020

A budget is a simple plan according to which you are going to spend your money. Mainly, a budget is based on your income, your expenditure and is a plan for saving in the near future. By budgeting, you will always know in advance about the money you have and the things you would be able to do with the money. By following a budget, you can keep your finances on track and can remain away from debts. A budget will help you in spending sensibly and thus enable you to save for your future.

Monthly Budgeting and its necessity

A monthly budget is a simple plan to determine the income in a month, expenses in a month and determine the savings if any. Monthly budgets can also be referred to as household budgets or personal budget which is a list of the expected income and expenses in the household. This will help you in planning on how your money would be spent or how the money would be saved. A monthly budget would help to set the guidelines on how much expenditure must be done on a particular category of household items. Whatever may be your monthly income, it is necessary to prepare a monthly budget to control your finances.

Why do you need a monthly budget? Let us find out the major reasons for the need of a monthly budget.

Control over your money

When you are preparing your own monthly budget, you will feel like your control over your money is increasing. When you have a clear idea about where your money is being and how much is being used, you can feel the authority and control over your finances.

Determination of areas where savings are feasible

By a monthly budget, you can easily find out those areas where you are making expenditure unnecessarily. It would direct you in using your money in only those areas where it is necessary and thus help you in finding out areas where money can be saved.

The idea about your future expenses

With a monthly budget, you can easily find out the different categories where you are spending your money and the amount of money spent. You can easily have a clear idea about your future expenses very easily.

Easy in finding out any malicious acts

When you check and maintain your budget regularly, if there have been any suspicious activities with your accounts such as any unknown deposit, withdrawal or expenditure; you would be able to determine it easily.

Reveals wastage

By creating a monthly budget, you would be able to focus on those areas which are mostly ignored or neglected by most people in daily lives.

Financial Goals

By making a budget, you are preparing an intentional choice on your categories of expenses and the number of expenses. You determine what will happen to your money and how it will be spent. This will help you in having a clear picture of your financial goals and you will put in your efforts to achieve your financial goals faster.

Reduces stress

Finances are one of the major reasons for creating stress in the lives of common people. When the expenses are in a planned manner and there is the scope of savings, the stress reduces and you feel empowered.

Financial Education

By the creation of a monthly budget, money can be considered as a tool that will help in achieving long-term financial goals in life.

How to create a monthly budget?

Let us check out the step-by-step procedure in preparation for a monthly budget.

Step#1: Make a budget in advance

It is quite essential that you prepare your monthly budget in advance before the month starts. This will help you in meeting the real purpose of monthly budget creation i.e. moving ahead with money and moving ahead in life.

Step#2: Set your financial goals

You should be clear about your financial goals and set them in advance before the creating of your monthly budget. Financial goals are of two categories i.e. immediate goals and Long term goals. Immediate goals are those that require the use of the money instantly for fulfilling the requirements whereas long term goals deal with the income and expense which span over a decade.

You will have to classify which goals are an urgent necessity and which are luxurious goals. Your current expenses are your immediate financial goals such as food; child care, cell phone, household items, car loans, utility bills, etc. are the urgent necessities and need to be fulfilled immediately. Long-term goals are your future plans like retirement savings, investments, etc. which do not need immediate action but will be one of the major objectives of the monthly budget plan.

Step#3: Determine your income

Now after you have determined your financial goals, you need to follow steps to achieve your financial goals. For this, you will have to determine all your sources of income. You can make a list of all your sources of income and add up the numbers to obtain the final income.

Step#4: Identify your expenses

In the next step, you need to identify your expenses and expenses mainly fall into the below-mentioned categories:

  • Fixed committed expenses that have a fixed amount every month such as a mortgage, rent, health insurance or vehicle insurance, etc.
  • Variable committed expenses which occur every month but the amount is different for different people.
  • Discretionary expenses are optional expenses like recreational and expenses related to the environment.

Step#5: Analyze your expenses

The most important step involved here is to ensure that the expenses you are making do not exceed your income. If your expenses are exceeding your income then, you will have to make certain adjustments to the budget. In such a scenario, you can just make some adjustments in the discretionary expenses and adjust your budget accordingly.

A monthly statement of your bank account would help you track your income and expenses and then track the necessary expenses accordingly.

Step#6: Revisiting the original budget and check progress

When you have created a monthly budget regularly for a certain duration like 2 months or 3 months, you can easily find out those areas which will need certain adjustments. Initially, you may not be aware of certain expenses but they have come up so, you can start including them into your monthly budget. You can make adjustments according to the requirements but you should ensure that the inflows and outflows must remain balanced.

Review of your budget within specific intervals is necessary as there are always certain changes in your income and expenses like a promotion or a layoff, car repairs, or some other expenses. Savings must be a part of your entire budgeting plan and it is wiser to create a separate contingency or emergency fund where you can save for certain unprecedented situations like loss of a job or medical issues, etc.

Step #7: Commitment towards the prepared budget

Creating a monthly budget is important and committing to that budget is even more important. If a monthly budget is made then your expenses should also be made according to that budget. You will have to remain realistic and make adjustments to the budget whenever necessary.

How to monitor monthly expenses and income?

It is necessary to monitor and track your monthly income and expenses. This will help you in getting a clear idea of where your money is going and where it should ideally go.

Check your account statements regularly

This is highly essential and will help you in determining your spending habits, where you are spending and how much you are spending. You should be very clear about the cash inflow and cash outflow in order to have control over your finances.

Categorization of your expenses

When your expenses are properly categorized, it will help you in having information about how much you are spending on which items. This would be helpful in making adjustments into your monthly budget if your expenses outgrow your income.

As said earlier, expenses are mainly of three major categories i.e. fixed expenses, Variable expenses, and Discretionary expenses. Fixed expenses are specific and would happen every month, variable expenses may vary from person to person and discretionary expenses are the ones that are adjustable.

Use of budgeting apps

There are different methods by which a budget can be created, tracked and even monitored. The most conventional method of budgeting is by the use of a notebook and pen. It is the simplest and least expensive method of budgeting. However, this method needed a lot of effort and time. So, there have been innovations in the field of budgeting and new, fast methods have been developed for budgeting i.e. budgeting apps.

There are numerous budgeting apps that will help you in creating a monthly budget and monitor your expenses. These apps will enable you to allocate a certain amount of income every month on the basis of what is being paid and what is being spent. You can log in to your purchases, input the time period and stick to your budget. These smart apps are an intelligent method to track, monitor your expenses and even create your monthly budget.

Maintaining other expense trackers

In case you are not much interested in the use of apps for tracking your expenses, then you can explore various other expense trackers that are available. Another alternate method to track expenses is through the use of spreadsheets. Spreadsheets also form an efficient expense tracking tool and can give a clear picture of your expenses and spending. They help in tracking, monitoring your monthly budget in a very organized manner. In addition to spreadsheets, there are various other budgeting and expense tracking tools available online which form an effective way of tracking expenses.

Make changes and adjustments

When you are tracking your expenses, then the next activity involved would be making changes and adjustments into the budget. You should be open to making changes and adjustments whenever needed in the budget as that is the most effective way of managing your finances. When you find the areas where you are spending more but those can be avoided, then you can make changes into your budget and spending habits.

So, by tracking and monitoring your expenses, income is really helpful and would bring a positive impact on your finances gradually.

Top 10 mobile apps and tools for monthly budgeting

Today, everyone is interested in planning their finances, tracking their expenses and saving money. The old conventional methods of maintaining records about your income and expenses, making notes on the unexpected expenses, etc. are time-consuming and cumbersome. The modern age is the age of technology and the tech world has noticed the need for technology in the field of budgeting and finance planning. So, there are various mobile apps and tools available which make monthly budgeting, tracking and monitoring expenses very easy.

Let us have a look at some of the popular mobile apps or tools which are widely used for monthly budgeting.


Mint is one of the best apps available for budgeting and expense tracking. Mint will help you in budgeting by categorization of the expenses in an automatic manner and create a picture of the expenses that have been done in real-time. You will be able to add up new categories according to your requirements, track your bills, split your transactions and even set the budgets in such a way that would provide an alert if the expenditure is exceeding the set limit. By the Mint app, you can also have checked and monitor your credit score free of cost.

Pocket Guard

Pocket Guard is a different type of budgeting app which helps in providing you with the exact amount which you have to spend. It will show the amount left out for spending after it has calculated the bills, other spending and the part which would be contributed for savings. You can have information on how much money is left in your pocket depending upon your choice of a week or a month.


By the Goodbudget app, you will portion out a specific portion of your income for particular categories. If there is one account on the app, many members of a family can use it for having access to the monthly budget of the house. Here, you have to manually add up account balances, your debts, and cash amounts. This app is not synchronized with your bank account and all the data needs to be entered manually. You will also enter the amount which is to be assigned to various categories for spending.

Clarity Money

Clarity Money is a budgeting app by which you would be able to link your bank accounts from different banks. By Clarity Money, you will be able to track your expenses, organize your expenditures into various categories. You can also use this app for viewing your credit score and monitoring your credit score.

Personal Capital

Personal Capital is an investment tool that also has budgeting features. It helps in checking the savings account, credit card accounts and other details related to financial accounts. There are various categories present and you can customize these categories to find out the total expenditure in each category.

Financial Calculator

A financial calculator is a financial tool that helps in preparing a budget for the future. This app consists of a collection of calculators that can help you in many calculations along with budget creation and expense tracking. It consists of loan calculators, return-on-investment calculator, etc.

Google Sheets

You can consider Google Sheets’s method of budgeting as the old school method but they are reliable and as good as the other mobile apps used for budgeting. You can easily fill in the sheets with data like income, expenses and other necessary data. By using these data you can easily find out how much you have as income and how much to spend. Google sheets are like the office apps, simple and a very secure method for tracking expenses and budgeting.


Monefy is a simple budget app that makes adding new data quick and easy. You can obtain various other features like an in-built calculator, dropbox integration, password protection, currency support, etc. You might take some time to learn about the app but once acquainted you find it quite easy to use.

My Budget Book

My Budget Book helps in detailed budget creation and expense tracking. It helps in collecting all basic details and can also set up the limit for each category. This app is customizable and you can export the file to HTML or CSV according to your requirements. It has a material design interface and you can obtain offline support for operating it whenever needed.


AndroMoney is a very successful expense tracker and even offers cross-platform support in the case of web and iOS. The design for AndroMoney is very clean and the analytics are presented in a very logical manner. This app works absolutely well and has features like multiple accounts, support for various currencies, back-up to Excel, budgeting functions, etc.


Hence, budgeting and keeping a track of your expenses are highly essential. It gives you the confidence of having control over your finances. Creating a monthly budget will help you in having a clear picture of how much money has been coming in and how those funds would be used. Budgeting and tracking your expenses act as an effective tool in building a successful financial future and helps you get the most out of your hard-earned money.

How to choose the right Bank for you?

How to choose the right Bank for you?

Banks are those financial institutions that deal with money, its substitutes and help in providing financial services to common people. The main function of banks is to put the money of account holders to use by providing loans to those who can be able to use the money for different purposes. In simple terms, banks are the financial institutions involved in borrowing and lending of money. Banks play an important role in offering finances to people who are interested in investing and expanding.

Let us have a look at the main purpose and functionalities of banks.

  1. Banks are the custodian of the money of their customers. Banks are one of the most secure places where the money of the customers can be kept safely.
  2. Banks offer interest on the money deposited by customers in banks. By this offering of interest on money, banks help the customers in preventing loss of value of money due to inflation.
  3. As said earlier, banks offer loans to those customers who are interested in making complete utilization of the money such as firms and customers who can use the loan for business expansion.
  4. Banks offer financial advice and other financial services whenever necessary.

Today, numerous banks are offering financial services and assistance. However, you must be able to choose a bank which is the right one for you. This can be feasible by considering certain factors while searching for the right bank.

Types of Bank Accounts in India

First, let us check out the different types of accounts that are available in banks along with their basic features.

Savings Account

Savings Bank Account is opened by those persons who have a fixed and regular income. You can suggest your employees open a Savings Bank Account and encourage them to save money.

The major characteristic features of Savings Account can be mentioned below.

  • The rate of interest payable on Savings Account is nominal and currently, it ranges from 4% to 6% per annum.
  • In a Savings Account, your employees would not face any restrictions on the number of deposits made and the amount deposited.
  • Savings Account does not have any maximum period of holding and the money is always available.
    Your employees can make withdrawals from their Savings Account. Depending on the type of account, there might be certain withdrawal limitations or charges applicable for the same.
  • Moreover, withdrawal of money can be done either through cheque or by the help of a withdrawal slip from the bank or through an ATM or Debit card from an ATM Machine.
  • Your employees need to keep a minimum amount in the Savings Account to keep the Account active. However, if the account is tagged along with their salary, the minimum balance requirement might be waived off.
  • Facilities like e-banking, EFT, ATM cards, etc. are available which can be of great help to your employees. They can use their Savings Account Passbook or Bank Statement as an identity proof and residential proof.
  • Your employees would be able to avail other benefits offered by the bank through their savings accounts like:
    • Bank Fixed Deposits and Recurring Deposits
    • Credit Cards
    • Other investments like mutual funds, insurance, etc.
    • Avail loans, etc.
  • One person can have multiple savings accounts as there are no restrictions for the same.
  • A savings account can be opened by an individual or an HUF(Hindu Undivided Family)

Salary Account

Salary Account is a category of Savings Account into which you would be depositing the salary of your employees every month. Thus, you need to have a tie up with a bank to open the Salary Accounts of your employees in the bank and your employees would be able to reap the benefits of the same.

  • A Salary Account is also known as a Zero-balance Account i.e. there is no need of maintaining a minimum balance in this account and has the main purpose of salary being credited.
  • Usually, no interest is paid on the Salary Account.
  • The employees can also deposit money through cash and cheque into the Salary Account whenever required and use it as a regular savings account.
  • The basic benefits of a Salary Account would include:
    • Transfer of money to and from the same through the various channels offered by the bank like net banking, NEFT, RTGS, IMPS, etc.
    • Debit card and cheque facility for withdrawing of cash
    • Using the mobile banking facility through the registered mobile application
    • Your employees would be able to avail other benefits offered by the bank through their salary account like:
      • Bank Fixed Deposits and Recurring Deposits
      • Credit Cards
      • Other investments like mutual funds, insurance, etc.
      • Avail loans, etc.

Current Account

Current Accounts are otherwise known as Financial Accounts and are maintained to carry out a higher number of regular transactions with the bank especially for a business purpose. A current account can be opened by an individual as well as a non-individual like company, trust, organization, NGO, etc. So, as an organization you can have a Current Account but your employees cannot open a current account through your company, as they are salaried individuals. However, they would be able to open a Current Account in their individual capacity.

The basic benefits of a Current Account are:

  • There is no limit on the transactions of payments on a particular day in a current account
  • Since this is a business account, charges are usually higher than savings account
  • There is a minimum balance requirement in a current account as well, which varies from bank to bank and depends on the type of account, etc. Even the benefits like overdraft facility limit, cheque books, charges, minimum average quarterly balance (AQB) requirement, free demand draft, CMS (Cash Management System), etc. depends on the type of account and the negotiations done with the bank based on the book value of the account. Larger the account, higher are the benefits
  • Internet and mobile banking facility along with investment opportunity is available for current account holders as well along with:
    • Bank Fixed Deposits and Recurring Deposits
    • Credit Cards
    • Other investments like mutual funds, insurance, etc.
    • Avail loans
  • Loans are an important part of every business and current account holders usually get a preferred rate for the same as the payment for the loan would be recovered from the account itself.

Fixed Deposit Account

A Fixed Deposit Account is opened for a fixed duration of time by depositing a fixed amount of money at a predefined rate of interest. By this, your employees can deposit a fixed amount in the bank for a fixed duration of time and then withdraw the amount by the expiry period of the account through their existing Savings or Salary Accounts.

The basic features of a Bank Fixed Deposit Account is:

  • The Bank Fixed Deposit Account of your employees can be linked to their Savings or Salary Account
  • Since the Bank Fixed Deposit Account is a guaranteed product, the rate of interest is fixed for the specific tenure, which can range from 7 days to 10 years
  • The tenure of a Bank FD(fixed Deposit) is specified at the beginning and if the account holder wishes to withdraw money before the completion of the tenure, he would be able to do so but there might be charges applicable for the same
  • However, if the Bank FD is for a tax saving purpose under section 80C, i.e. for 5 years, then the same cannot be withdrawn before the completion of the tenure, even in the case of emergency.
  • The rate of interest varies from bank to bank on a regular basis and depends on the tenure of investment chosen. However, once chosen, the same is guaranteed for the entire tenure
  • TDS (Tax Deduction at Source) of 10% is applicable on the amount that is paid to the account holder if the interest is more than Rs 10,000 in one particular year, if Form 15G or Form 15H(for senior citizen) is not submitted on time.
  • There is a loan facility against the Bank Fixed Deposit as well.

Recurring Deposit Account

A specific amount of money when deposited at a Bank on a monthly basis for a specific tenure with a predefined guaranteed rate of interest, the same is called a Bank Recurring Deposit and the account associated with the same is called a Recurring Deposit Account.

Recurring Deposit Accounts are those accounts that are opened with the intent of utilizing the deposited amount in the future for the accomplishment of some long-term goals like the purchase of a car or some luxury items, wedding expenses of children, etc. So, your employees can open their RD(Recurring Deposit) Accounts through their existing Savings or Salary Accounts.

Some of the major features associated with the Recurring Deposit Account are mentioned below.

  • The minimum tenure for deposit into a Recurring Deposit Account is 6 months and the maximum is 10 years
  • The rate of interest varies from bank to bank on a regular basis and depends on the tenure of investment chosen. However, once chosen, the same is guaranteed for the entire tenure
  • Withdrawal of the Bank RD is allowed with the applicable charges but no partial withdrawal is allowed
  • TDS (Tax Deduction at Source) of 10% is applicable on the amount that is paid to the account holder if the interest is more than Rs 10,000 in one particular year, if Form 15G or Form 15H(for senior citizen) is not submitted on time.

And some of the benefits include:

  • A recurring deposit account will also help your employees in developing the habit of saving money.
  • There is a loan facility available with most banks for the Recurring Deposit

How to choose a bank for yourself?

While choosing a bank, there are some basic points which you should keep in mind. Let us have a look at some of the major things to look at while choosing a bank.

Safety: Security of your funds deposited

When you are choosing a bank, you should validate the security of the funds which you are going to deposit in the bank. Your bank is always insured and thus it provides apt security to your deposits. This is the primary reason for safekeeping your money with an entity like a bank.

Note: However, do you know the total amount of Insurance that is available for the money that you deposit in your bank in India? It is up to INR 1 lakh only. So, irrespective of what is the total amount of funds that you have in your bank, the insurance amount is at a flat INR 1 lakh only.

Charges: Transaction fees

Banks always charge a fee for the services they provide. However, there are some accounts like no-frills account or salary account or preferred accounts, where the charges are waived off.

Thus, you need to scout for those banks which have low charges and fees for the regular transactions which will be carried out in the banks. These fees can include monthly fees, processing fees, withdrawal fees, etc.

The difference in the rates of interest

Interest rates are related to the interest rate you will receive on your money deposited in the bank whereas another interest rate is related to that you will have to pay in case of any loan taken or credit card taken from the bank. You should always try and find a bank where the interest you receive on your deposits is high but the rate of interest on loans and credit cards is low.

Customer Service:

Customer Service is definitely a differentiating factor for choosing a bank. The bank you select must provide very good customer service. When you have queries or problems, you should receive proactive support and help from the customer representatives of the bank.

Ease of Transaction:

Even though in today’s age of technology, all transactions associated with banks can be done online but still there can be a certain situation in which you will have to deposit a cheque. In such a case, you should be aware of the physical location of your bank available near you. If you are frequently in need of depositing cash into bank accounts, then you must choose a bank that has physical locations near you for convenience.

Digital Support:

Mostly, all essential operations associated with the bank can be done online. So, a bank with a better internet banking and mobile banking facility is an advantage.

Once you have chosen a bank, you must choose the type of account that suits you the best. Even in a Current Account, there would be multiple types with varied benefits and varied AQB(Average Quarterly Balance) requirements. An account with a higher AQB would have higher benefits like dedicated Relationship Manager, etc. So, you need to weigh your requirements and then choose the type of account that suits your needs. Similarly, encourage your employees to do the same as well.

However, while you are selecting a particular bank you should be careful about these features and choose the ones which satisfy these criteria.

What questions should I ask my bank?

When you are choosing a bank, you should first ask certain necessary questions to your bank. These questions will help you in deciding about choosing the bank or not.

What are the options available for savings accounts, investment opportunities, etc. in your bank?

It is necessary to know about the options that are available with your bank about the savings account and other benefits like loans, investment opportunities, etc. This is a question you need to ask for the benefit of your employees. There must be a wide range of savings account options, investments and other benefits available at the bank and you must know about them in detail to be able to avail of the features and services.

What is the minimum balance requirement for keeping the account active?

Before you decide on opening an account in your bank, you must find out if there is any minimum balance that is needed to keep your account active. This would help you avoid unnecessary charges for not maintaining the same.

Is it easy for customers to avail of credit from the bank?

Usually, banks offer loans and credit cards to its customers at low-interest rates. You should check out if it is an easier process to procure loans or credit from the bank or not, which you or your employees might avail at any point of time.

What are the interest rates offered by the bank?

Banks offer interest to its customers for the money deposited into a savings account. You should thus be aware of the interest rates applicable in the type of account that you wish to avail.

Are there locker facilities available with the savings account?

Numerous banks offer locker facilities along with savings and current accounts. These locker facilities would be very helpful for you to keep your valuables safe. Your employees might also be able to avail this benefit.

Are there branches of the bank available nearby?

Even though most bank transactions can be performed online, there could be certain scenarios in which you would have to visit the bank. In such a case, you should be informed about the branches of the bank nearby for your convenience and you should be choosing a bank which has branches nearby.

What are the different types of debit cards and credit cards available for your employees?

Banks usually offer different types of debit cards and credit cards with various offers associated with them. VISA or MasterCard, RuPay Debit cards, Signature debit cards are some of the categories of cards available for transactions. You must know about the varieties of cards for convenience in choosing the card that matches your choice.

Are there facilities available for online banking? If so, what are the online services available for the customers?

Today, in this digital age all the banking operations are mostly performed online. It is necessary to know if your bank is providing online services for the convenience of customers or not. If so, what services are included in the online services? Many banks offer services like mobile banking, Pay Zapp, internet banking, etc. for their customers.

What is the schedule of charges for every transaction?

Charges are one of the highest incomes for a Bank. So, as a proactive customer, you need to be well versed with the schedule of charges so that you do not end up paying for the same unnecessarily.

What are the 5 most important banking services in India?

The 5 most important banking services provided by banks, other than safekeeping of your money and investment opportunity, can be summarized as:

Advancing of loans

Advancing loans is one of the most important services provided by banks. Banks can also be termed as financial organizations that are profit-oriented. Banks can provide loans to the public and the interest which is generated from the loan is the profit of the bank. After keeping some amount of cash reserve, as mandated by the RBI(Reserve Bank of India), the banks usually provide different types of loans to common people at a particular rate of interest which is mentioned before the product is signed up.

Overdraft facility

The process by which you can withdraw more than your deposits in your account is known as Overdraft. This is one of the important services provided by the bank by which they can lend money to people at the time of requirement. However, an interest is charged by the bank on the overdraft amount.
This is usually done to meet the emergency fund requirement for the short term.

Foreign currency exchange

Banks deal with foreign currency and on the requirement of customers, banks help in exchanging foreign currencies for local currencies. This is quite helpful in international trade as it helps in the settlement of the dues.

Discounting of bills of exchange

This is another means by which banks lend money to the customers. In this method, if you are the holder of a bill of exchange then you can get it discounted by the bank in the form of a bill of exchange. The debtor will accept the bill which has been drawn upon him by the creditor and will agree to pay back the amount on maturity. Then there are some marginal deductions made by the bank and then the amount is paid by the bank to you as you are the holder of the bill. On the maturity of the bill of exchange, the bank will obtain its payment from the party which had accepted the bill of exchange.

Internet banking and mobile banking

In today’s modern world, these services are the most essential services provided by banks. By online banking, you can perform all the transactions related to banks from any place only with the help of the internet. Similarly, mobile banking is another service that is adding to the convenience of people by which you can perform your banking transactions with the help of your smartphone applications. These services have made banking easier and even more convenient.

In addition to these 5 important services provided by banks, many other services are provided by banks such as money transfer, credit cards, debit cards, lockers, investment banking, consultancy, ATM services, wealth management, etc. as well.

Which are the top 10 banks in India?

There is no specific list or ranking of the top #10 Banks in India and it depends on a completely personal choice, but some of the the most popular ones are mentioned below(in no particular order):

1. HDFC Bank

The HDFC Bank is one of the reputed private banks of India having its headquarters at Mumbai. The bank has a total of 4,800 branches and 12,000 ATMs across the country. HDFC bank is popular among common people because of it being an eminent choice for opening salary accounts. The HDFC bank offers services such as Savings Account, Credit Card, Debit Card, Car loans, Forex card, etc.

2. Axis Bank

Founded in the year 1993, Axis Bank is the third-largest bank of India in the private sector. Axis Bank has around 3000 branches throughout the country and around 13,000 ATMs. The major services provided by Axis Bank are a savings account, fixed deposit, credit card, investment banking, insurance, mortgage loans, etc.

3. State Bank of India

The State Bank of India (SBI) was founded in the year 1806 and is headquartered in Mumbai. It is the oldest bank in India and offers services such as corporate banking, investment banking, car loans, home loans, savings account, asset management, etc.

4. IDFC Bank

IDFC Bank is famous among people for the excellent customer service they provide. The debit cards of the IDFC Bank have excellent features such as the use of ATMs all over India, better Fixed deposit rates, opening accounts is easier, etc.

5. Punjab National Bank

Punjab National Bank is a state-owned multinational bank of India with its headquarters in Delhi. The major services provided by the Punjab National Bank are debit cards, credit cards, internet banking, mobile banking, ATM cards, etc.

6. Bank of Baroda

The Bank of Baroda was nationalized by the Indian Government in the year 1969. There are around 5,538 branches of the bank and a total of 10,000 over the country. The bank provides essential services to its customers in the form of debit cards, credit cards, savings account, online banking, etc.

7. ICICI Bank

ICICI Bank is one of the reputed private banks in India with more than 8,700 branches and 14,000 ATMs all over the country. The major areas of functionality for ICICI Bank are investment banking, wealth management, asset management, life insurance, venture capital funding, etc.

8. IDBI Bank

The IDBI Bank is otherwise known as the Industrial Development Bank of India. It is a public sector bank that was founded in the year 1964. The IDBI bank is headquartered in Mumbai and offers a great range of loan options in a hassle-free manner. IDBI Bank can be chosen for private banking, investment banking, corporate banking, insurance, mortgage loans, agriculture loans, etc.

9. Canara Bank

The Canara Bank is one of the oldest public banks in India and was established in the year 1906. The Bank has its headquarters in Bengaluru and is a convenient choice for commercial banking, investment banking, private banking, credit cards, asset management, etc.

10. Bank of India

Bank of India is a commercial bank founded in the year 1906 and offers excellent services through online banking. There are almost 5000 branches of the Bank of India and have the main motive of serving the Indian communities.


Hence, banks play a very major role in the economy and its growth. The main intent of banks is to help the common people with various issues related to the transactions and operations being carried out in banks. It is quite necessary to be successful in choosing a bank which is right as the right bank would have those necessary characteristics which would be helpful for common people. Some basic questions and major characteristics should be checked out before selecting a particular bank.

How to improve your credit score?

How to improve your credit score?

What is a credit score?

A credit Score is a number which helps in representing your creditworthiness. Your creditworthiness is can explain your likelihood of re-paying your debts. Your credit score will usually be dependent on the frequency of your payments being done on time. Credit scores are used by money-lenders to find out the probability of the loan being paid on time or not. Your credit score can range between 300 to 900, with 300 being the lowest and 900 being the highest. When your credit score is on the higher side, you are considered to be more trustworthy from a financial perspective and have a responsible behavior towards repayment.

In India, there are authorized credit agencies for generating credit scores and credit reports. These agencies are authorized by the Reserve Bank of India for generating the credit scores by taking into consideration the details of your credit information. Your credit scores are calculated on the basis of your financial data which is at least six months older. If you are maintaining a healthy credit score, it will help you in getting your loans approved in the future easily. You can easily maintain a high credit score by being disciplined when it comes to loan repayments and having a lower credit utilization ratio.

How to get your credit score?

A good credit score is proof of your financial management being done in a good way. It will act as a deciding factor for the financial institutions when there is a loan or credit card application filled in by you.

You can check your credit score online free for once in a particular calendar year. You can visit the CIBIL website and check your credit score online. The major steps which are involved in checking your credit score online free can be listed below.

  1. In the first step, you need to visit the website of the Transunion CIBIL and click on the link which highlights free credit reports.
  2. Now, in the next step, you will have to create an account by entering certain details like name, telephone number, and email address.
  3. In the following step, there will be a need for filling a form for providing certain information for identity verification such as date of birth, gender, postal address, and other proofs such as PAN, Aadhar number, etc.
  4. In the final step, once the form is filled you will have to accept the mentioned terms and conditions. Then you can view the credit score report which shows your credit score.

However, after checking the credit score once for free; you will have to make payments when you wish to check your credit score again in the same calendar year. In such a case, after the form has been filled you have to choose the mode of payment such as net banking, credit card or debit card, etc. A payment of Rs. 470 has to be made for checking the credit score generated by CIBIL.

After the payment is completed you will have to answer 3 questions correctly out of 5 questions related to your credit history. With the completion of this authentication, your credit score report will be available on your email address within a time period of 24 hours.

Moreover, the credit score can be checked by offline means as well. You can visit the CIBIL website and download the form. After filling out the details present in the form, demand draft of either Rs. 550 (for both credit score and credit report) or Rs. 164 (only for credit report) can be attached along with the form. The form has to be mailed to the mailing address of the Transunion CIBIL Limited branch at Mumbai. Your credit score and credit score would be mailed back to you.

Why it is important to have a good credit score?

A credit score which is above 750 is considered to be good by financial institutions for granting credit cards and loans. Let us have a look at some of the major benefits of having a good credit score.

Loan approval becomes easy

As said earlier, a good credit score is a key to hassle-free loan approval and credit card sanction. When you are having a credit score higher than 750, you will easily get any type of loan approved within no time.

Interest rates are sometimes discounted for a good credit score

If you have a high credit score, you are in a state to negotiate the rate of interest with the financial institutions. With a high credit score, your lender would consider you as a financial trustworthy client and can lower the interest rate even.

Chances of getting loans with longer tenure

You can negotiate on the interest rate of the loan and simultaneously can also negotiate on the tenure of the loan. Since your bank would consider you as a reliable client, you can also be successful in procuring a loan for a longer tenure easily.

Chances of getting credit cards with better rewards

When you have a high credit score, you can even be able to negotiate on the credit limit of your credit card. You can ask for credit cards that have a higher credit limit and also offer much better rewards, benefits.

How to read your credit score report?

Your credit score report is a summary of your credit activities and payment activities. Your credit score report will contain details related to your credit accounts which might be current or old in nature, closed accounts even, payment history, loans, and credit cards, the limit of credit cards, collection records, public records, and new credit inquiries.

Let us check out in details associated with the different sections of your credit score report.

The actual credit score

The section for Credit Score will mention the credit score which lies between 300 and 900. This credit score is calculated by using different factors such as credit inquiries, history of payments, age of the credit, credit exposure, etc. You should always take initiative to maintain a high credit score.

Personal Information

This section of the credit score report will contain personal information which is related to your identity such as your name, address, date of birth, current accounts, previous accounts, PAN, Voter ID, Driving license number, etc. You should be careful and validate if these details have been provided correctly or not.

Bank Account Information and other Financial Details

The account information section consists of credit cards, credit accounts, credit limit, loans, current balance, date of opening of the account, amount of loan procured, amount overdue, total outstanding payment, etc. You can also check that this information is correct and if there is any incorrect information, you can bring the issue to the notice of your bank immediately.

Credit Inquiries

The credit inquiries section enlists the name of those companies and the exact dates on which your credit report has been viewed for any credit application. This section mostly includes information about credit reports pulled out by financial institutions. It will also consist of the size of the loan and the type of loan you have applied for.

Which agencies in India provide a credit score report?

The Indian Government has authorized four credit score agencies that generate a credit score report. When you are making a particular transaction, your respective banks will send those transaction details to the credit score agencies. This has been mandated by the RBI as an essential step for generating the credit score report. The credit score agencies would also try to collect information from other financial institutions about your financial habits and health. Then the information is processed by the credit score agencies to obtain the credit score report. Whenever your banks would require the credit score report for approving any loan or credit card they will approach the credit score agencies for the credit score report.

Any credit institution, the financial institution can request for a credit score report at any time. A format has been specified by the RBI, based on which credit sore agencies will share the credit score report. The credit score and credit score report generated by all the four credit score agencies is the same and so, financial institutions can approach any one of them at the time of need.

Let us have a look at these credit score agencies which are generating the credit score report in India.

Transunion CIBIL

Transunion CIBIL is a credit information company that has been authorized by the Government of India as a credit score reporting agency. Transunion CIBIL maintains credit files related to around 600 million individuals and around 32 million businesses.

This agency generates credit score reports which are classified into Consumer credit reporting and business credit reporting. Consumer credit reporting is associated with information related to consumer borrowing and payment. It helps in finding out the loan risk and also setting up the interest rate for credit. However, business credit reporting deals with the aggregated data on business finance and the information related to the payment made by businesses.

Experian PLC

In India, Experian PLC was established in the year 2006 as a joint venture with other financial institutions and banks. The credit score report for individuals is prepared by Experian PLC on the basis of the transaction information shared by banks and financial institutions. A fee of Rs. 399 is charged by Experian PLC for generating your credit score and credit score report. Moreover, a fee of Rs. 138 is charged for generating your credit score report only.

Equifax Inc.

Equifax Inc. was registered in India in the year 2010 by the Reserve bank of India. However, Equifax is one of the oldest Credit Information Company founded in the year 1899 in Atlanta. It collects credit data for more than 800 million individual consumers and 88 million businesses all over the world. Equifax Inc. charges a fee of Rs. 400 for both credit score and credit score report whereas Rs. 138 for the credit score report.

Highmark Federal Credit Union

The Highmark Federal Credit Union was founded in the year 2005 in Mumbai. It provides credit reports about customers and also has segments to help commercial and retail borrowers. A very nominal fee is charged by the agency for generating a credit score report.

How to improve a bad Credit Score?

As said earlier, a good credit score is very much necessary for obtaining loans and credit cards. In case of a bad credit score, some of the essential steps can be taken to improve credit score.

Let us check out some of the measures to improve the credit score.

Tip #1 – Regularly checking of a credit score

  • You are making your payments on time
  • There is no anomaly in the report
  • There is no misrepresentation for the same

You should always keep on checking your credit score report regularly. This is helpful as you would be able to know about any delayed payments which are affecting your credit score and if there is any wrong information present in the credit score report can be reported for correction immediately.

Tip #2 – Always repay your loan on time. Do not bounce EMI’s

If you have EMIs to be paid, you should always be cautious about it and make the re-payment on time. When loan re-payment is done in time, it helps in raising your credit score high.

Tip#3 – On-time credit card bill payment

It is advisable to clear your credit card dues on time and always avoid spending too close to your credit card limit. This will be quite helpful in improving your credit score.

Also, you save heavy finance charges on being a balance payer.

Tip #4 – If loan or credit card is rejected, avoid applying again and again in the short while

In case you have applied for a loan or a credit card and your application has been rejected due to your low credit score then you should avoid applying for a loan or credit card again and again. You should wait for some time till your credit score improves and then you can try applying again.

Tip #5 – The low frequency of credit applications

You should avoid applying for a loan or credit card again and again. This will make banks ask for your credit score and this inquiry will be recorded in your credit score report. When this inquiry is done frequently, it will have a negative impact on your credit score and lower it.

Tip #6 – A mixed bag of credit- Secured + Unsecured

Another method by which your credit score does not get impacted is by getting a mixed bag of both secured and unsecured loans. If all your loans are unsecured then it will have a negative impact on your credit score, so you can procure a combination of both personal loans and a car or home loan.

Tip#7 – Borrow minimum amount

You should avoid taking numerous loans and should prefer taking loans only when it is extremely urgent. Numerous frequent loans would have a negative impact on your credit score. It is necessary to avoid frequent loans for obtaining a good credit score.

Tip #8 – Have joint applicants

Suppose, you are a joint applicant in a loan application and your other partner has not re-paid the loan amount then it would also have a negative impact on your credit score. In such cases, you should try to ensure that the necessary payments are made on time to avoid being a defaulter.


Hence, your credit score is a snapshot of your credit health. It will give the money lenders an idea of your capability of loan re-payment. It is necessary to maintain a good credit score to avail of various advantages related to loans and credit cards. Your repayment history, your type and amount of debt, credit inquiries, etc. are major factors that are affecting your credit score. You should try and be regular with your debt payments and avoid taking many frequent loans to maintain a high credit score. This high credit score would be beneficial for you in the future for obtaining loans and credit cards easily.