Moving into your own home is an exciting proposition for all of us. The transition from renting to ownership allows us the freedom to indulge in all the nuances that make a house our home. Moving into your own home can also be an expensive affair requiring careful financial planning. Associated with this planning in most cases is also the first large debt that an individual takes on in the form of a mortgage loan. Other forms of borrowings through a loan or a credit card stack up with all the work on decorating the interiors and the appliances that afford convenience in the modern day world. LOAN APPLICATION When you apply for a loan,your lenders have to make sure that you are who you say you are and that you are likely to repay the loan as a part of their credit approval process. Typically that will refer to your credit information report (CIR) provided by a credit information company (CIC) which is an independent organisation that compiles credit transactions and payment histories of consumers along with public data and identity information. These payment histories are supplied to the CIC by banks and NBFC with whom you have other loans and credit obligations. When your loan application is processed,a lender will obtain a CIR. It contains identity information,past and present credit obligations,previous addresses and enquiries made by banks for all your loan applications. If your report shows that you repay credit on time,this will usually help you get credit at favourable terms. THINGS TO REMEMBER It is a good idea to get a copy of your credit information report before you apply for a home loan and before you go shopping for big household items. That way,you can spot if there are any problems on your report and sort them out before you apply for credit. It is also sensible to work out what loans you are going to need,and what you can afford,before you start shopping. Remember that you will probably pay interest on top of the cost of the goods you are buying. Draw up a budget to help you work out what you can afford to borrow. Cumulating and taking a single loan for all your requirements is usually a good idea too. Multiple loans leave as many footprints on your credit information report and is typically representative of bad financial planning or excessive credit hunger either of which are typically not looked at very favourably by lenders. Also taking one loan for all your needs may allow you get the loan at a competitive rate of interest. When you move home,always tell your lenders your new address as soon as youve moved so that your loan account details can be updated. Check your CIR to ensure that you have communicated the new address to all your lending institutions. Also contact your local post office to arrange for your mail to be redirected to your new home. Identity fraud is a growing problem. By changing your address with all your banks and NBFCs and with the post office,you can stop someone else getting hold of information about your accounts and committing fraud. Author is MD,Experian credit information company
