The Quickest Way to Build Credit Scores with Tradelines

There exist many ways to build and improve your credit score, but most of them take time and patience to come into effect. However, there is a quicker and easier way to this – making use of another person’s tradelines to build or better your credit score. You can do this by two means.

Becoming an authorized user

Often, you have a friend, a family member, or a significant other who has a long history of positive credit scores and paying bills on time. By being added as an authorized user to such a person’s credit card, their tradeline gets shared with yours and impacts your credit score in a positive manner. You don’t need to possess or use this person’s credit card to reap the rewards of being an authorized user. All you need to do is ensure that the primary cardholder, i.e. your friend or family member, reports the activity of all authorized users to the credit bureaus. Else, it can be a waste of time as non-reporting won’t help with credit building at all. It is advisable to come to an agreement with the primary cardholder before the exercise, especially if the person expects you to pay your share to him/her for giving you such access to their credit history.

Buying third-party tradelines

Not all people are fortunate enough to have friends or family with positive credit history, and even if you do, these members may not be willing to give you authorized access for a variety of reasons. In such a situation, the quickest way to build credit scores is by buying tradelines from a reputed and legitimate company. The tradeline purchase is made by a third-party agency or company who specializes in the same.

Professional companies buy tradelines from people who have a long history of positive credit card or loan payments and offer them to you at a fee. The advantage of this method is that you can choose one or more tradelines that help offset the not-so-great information on your credit report. You can also make a choice based on your goals – whether it is to obtain a higher limit on your existing credit or to secure a large sum of loan for a new house or car. The effect is typically visible in anywhere between 45 to 90 days.

However, when opting for this method, be wary of the company that you choose to work with. There is an exchange of sensitive information, including identity proofs with the third party and tradelines sales company. So, be absolutely sure that you avail the services of a legitimate organization lest your identity gets stolen or misused.

Also, remember that buying tradelines as the quickest way to build credit only works for a short term. You are usually removed as the authorized user once your goal has been achieved. Post obtaining a new credit card or loan, you need to continue making payments on a timely basis lest your credit score topples again, sending those hundreds or thousands of dollars you spent buying third-party tradelines down the drain in no time.

How to Give Your Finances a Fall Cleaning

We all hear about the ritual of Spring Cleaning – but what about “Fall Cleaning?” For many, fall is a natural new beginning, signaling the start of the final quarter of the year, the descent into the holiday season, and a ramp-up to a fresh new start when January 1 rolls around. In many ways, there is no better time to conduct a thorough financial refresh, take stock of your debt relief goals, and to restructure your family budget to optimize your financial success.

If you’re looking to organize your finances this Fall, here is a simple checklist for you to consider.

Take Your Financial Pulse
Comb your important files, check all of your bank accounts, pull your credit reports, and revamp your family budget to make sure that you have a grasp on your income streams, debt balances, debt relief payment plan schedules, assets, and liabilities. Before plunging into a new year, it’s important to know where you stand, where your finances look healthy, and where you have room to improve.

Once you’ve taken your financial pulse, the critical next step is to commit to change. If you consistently overspend in a particular area, resolve to significantly cut back in the next three months. If your emergency fund is looking a bit thin, devote a larger portion of your monthly paycheck to funding it – even if it’s just a few extra dollars. Finally, if your budget needs a refresh based on your most current income and expenses, update it, and make sure everyone in your family or household is aware of the changes.

Contribute to Your Retirement Accounts
In the last quarter of the year, do your best to max out your retirement contributions. You may have to play around with your amounts each month, especially if you’re currently in a debt relief program or attempting to settle a debt. Also, the amount you contribute may depend on whether your employer matches your contributions. Consider meeting with a financial planner to ensure you’re sufficiently padding your accounts before the end of the year.

Check Your Insurance Options
Check your options for open enrollment in a solid health, life, and disability insurance plan. Spend some time analyzing your healthcare spending and see if enrolling in a new plan would help you save more. Also, you can consider opening a Health Savings Account or Flexible Spending Account to contribute a set amount of healthcare funds before the start of the year.

Focus on Debt Relief
If you’re working through a debt relief plan, like credit card consolidation or debt settlement, consider using this final quarter to make substantial progress toward decreasing your balance. Rather than apportioning a substantial amount of your budget for holiday gifts, use that money instead to pay down your debt. Consider picking up a side job or extra shift or devote a larger percentage of your monthly income to debt relief, if possible.

Although it may seem early, by taking these simple steps now, you can slowly and intentionally work toward a financially healthy New Year.

How has Technology Redefined MSME Lending?

Differentiated underwriting, customized offering, flexibility, and fewer criteria for MSME loan eligibility are but a few reasons that make NBFCs a better choice for small organizations. Findings revealed that NBFCs demonstrated the lowest turnaround time for MSME loans which fell from 24 days in 2014 to 18 in 2018. (Stats from Economic Times)

As the most dynamic and promising sector today, MSMEs need easy, quick access to credit. With over 60 million MSMEs in India and a lending potential of 100bn that banks are unable to meet, they are forced to turn to informal sources of credit to finance their needs. There’s a wide gap between the demand and supply of credit in the MSME sector and NBFCs are well on their way to bridging it.

Technology and its uses have seeped into every industry across the board, each to different extents. The NBFC sector is no exception. Whether it’s the digitalization of documentation for paper-free processes or harvesting intelligence to deliver an exceptional, seamless experiences. The time has come for the leaders of change to adopt and implement technology to improve efficiency, accuracy, and speed and deliver value to their customers.

Against all odds, public deposits in NBFCs increased from $293.78 Mn in FY09 to $4.95 Bn (INR 319.05 Bn) in FY18.(sourced from Inc42, link mentioned) And, it might just have been the new financial technologies being leveraged that are responsible for this growth. Many NBFCs are strategically targeting this underserved market and leveraging technology to meet their needs. Let’s find out how tech is changing the MSME lending landscape:

Risk assessment

In the past, NBFCs depended on collateral and physical documentation to assess the creditworthiness of a small business. The birth of the internet and the domination of technology today has facilitated access to a wide range of formal and informal sources of data. It draws a clearer picture of the small business’ financial standing and allows financial institutions to assess their eligibility and take a call on whether the application should be approved or denied. This gives small businesses, with little to no formal proof of profit, the chance to become credible borrowers.

Documentation has gone digital, and processes online. While the migration of data to the cloud helps improve accuracy and speed of response, it inadvertently opens the organization up to a number of cyber threats. NBFCs must take the security measures necessary to safeguard their customer data, while they optimize the use of tech to simplify risk assessments and other operations.

Loan application process

Gone are the days when MSMEs needed to fill out a multi-page loan application or be present at a fixed location. Financial services technology has simplified the process to the extent of a few clicks. Additionally, it has the capacity to identify potential shortcomings related to the repayment of the debt and takes a call on whether to approve or deny the loan, almost instantly. The repayment process has also been simplified through the usage of UPI payment gateways that lets you pay both the principal and interest online.

Earlier the options available to MSMEs were limited by location, collateral, time, interest, etc. Technology gives customers access to lenders that were once out of their geographical reach and vice versa. NBFCs can now reach rural markets and provide services to the financially weaker and unserved markets like never before.

Challenges Faced

Technology is no longer the way of the future, but the way forward today. NBFCs that fail to recognize this critical shift, run the risk of extinction. Transformation is not possible overnight, it takes years of planning, implementation and course correction. There are a number of challenges faced by NBFC on the journey towards a digital tomorrow, some of which include:

Capital Intensity- Digitalization is a capital-intensive investment that a number of NBFC are unable to afford or unwilling to create a budget for. Many of them fail to see the potential impact and fear that it might be a risk too big to take.
Time and Man-power- Transformation is a time and effort consuming process that some NBFCs are unable to accommodate.
Stability- The NBFC market is currently in a state of influx, where most players are at a loss about what to do next.
The changes mentioned above have simplified processes, boosted the flow of credit and enhanced the overall loan experience for the MSME sector. It has also allowed financial institutions to launch MSME schemes that are customized to meet their needs. As one such NBFC, Capri Global is dedicated to empowering them with the finances to sustain and grow their businesses.

The contribution of the MSME sector to the GDP of India and the lending they receive from NBFCs, are both undeniable. Technology has become the stepping stone into the future and NBFCs that want to not just survive but win down the line have no choice other than walking the tech tight rope.