There is almost NOTHING in the BFSI space meant to help you the COMMON MAN. All the tools and so called ‘useful’ things may have been created for you, but later on it became a big money making or harassing tool.

Term Life Insurance – an excellent product when it was devised, but no longer. There are so many bastardized versions – like being available with riders, return of premium versions, etc. Then of course was Endowment plans – more meant to make money for the manufacturer than as a tool for helping you. Greed took over from need. Greed of the manufacturer I mean.

Potato is good for health, but chips are bad – can be the only way to explain how Term insurance is good, but all its derivatives and riders are bad!

Have you heard of CIBIL? Were you told it is like CRISIL and meant to rate you – and help you? Far from the truth. You are now given a ‘Credit score’ based on which you can get a loan at a fine rate. However, for a majority of the population, CIBIL has come as a nuisance.

Suppose SBI was good enough to issue a credit card. Great. Only problem is you never received it. It was supposed to be a card costing Rs. 400. Great. You will now pay off Rs. 400 and get rid of it, no issues. Hell no. The interest on it has grown and the amount due is Rs. 28,540! OMG – is this the power of compounding that Subra talks about every now and then? Yes, it is!!

So if you do not pay off this amount, your cibil score will remain at 504. Nowhere near the 800 where it could have been!

Also if you have NEVER borrowed and repaid, your score will be low. Yikes, sad but true.

What if you had taken a loan and then RENEGOTIATED the repayment? Well that also goes (went) against you – you have a lower score.

So now if you do not repay that Rs. 28450 – for a card that you never received you cannot get a loan.

In most ‘settlement’ cases you may have made payment and not received a settlement letter(duty of the credit card co. to provide the same)  or

you may have had a credit card earlier which you may not have used (or not received?)

and the annual fees have not been paid by you.  The Credit Card companies treat this as default and go on adding penal interest on the amount, which at the time of buying your new house or car becomes a really big amount.  If you have never taken a loan in your life it proves that you never needed any LOAN at all (I am one such freak) . Why should this decrease your score I have no clue. I believe the score of such individual should be very high given the fact that he/she has never taken a loan.  But CIBIL looks at it differently – typically the stupid AMERICAN WAY! Do we really need more proof of American’s stupidity? Well BFSI has all American children…so they copy their parents, so we need to live with that shit.

So next time somebody tells you nice things about CIBIL, direct them to this post. However if you do not have a good score  YOU cannot get a bank loan, bank job, or…maybe even a girl to get married. If I were looking for an employee, tenant, or a son in law / daughter in law – anything – the score is important. I can afford to fool around bcoz I have very little to lose!

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  1. one more thing, when it was launched, it was said maintaining good credit would mean lower interest rate and easier process. all bullshit, even if someone got 780± score intrest rate is same, band harras you with all kind if charges.

  2. My CIBIL is 820, but but and a big BUT
    Subra has through his blog brainwashed me into never ever ever take a loan.
    How can then I monetize this 820 🙂

  3. When I applied for SBI Housing loan in 2010 with my wife as joint borrower. The loan has been denied by SBI-RCPC stating that I have a taken a loan of Rs. 35,000 from Bajaj finance and that is not declared in liability section of the application.

    Fortunately that day RCPC manager was available in the branch, so I have said that the monthly salary income of mine and my wife [combined] was almost 3 times at that time. Then why should I go for a loan of Rs.35,000? Also the manager shown me the copy of CIBIL report, when I checked the address mentioned in the report for loan from Bajaj Finance is nowhere related to me.

  4. The RCPC manager said the CIBIL is 3rd party entity and SBI has nothing to do. I replied saying SBI was 30% stakeholder in initial days and now it is 10% stakeholder. I have given a letter of undertaking that I will get the Bajaj finance thing sorted out and I never took loan, then they approved my loan application.

    That time CIBIL was sharing the report offline. I have availed the CIBIL report, then send clarification query to Bajaj finance and rectification request to CIBIL and get a new report. It took 4 months of time.

    I was running out of time to pay my 1st installmenet to the Tamilnadu Housing board. If the RCPC wouldn’t have listened and agreed to approve my loan, I would have been paid a penalty of Rs.50,000 to TNHB.

    CIBIL is a big bullsit in India.

  5. Atiker: You didn’t take the loan because you don’t need to so far! When you need it say a medical emergency to parents or to buy a home then you wouldn’t remember Subra’s blog or his articles. By the way, my CIBIL score is 855.

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