5 Financial Mistakes That Cost You Dear
One fine day, we get tired of living in a rented accommodation and decide to buy a house of our own. We are of the firm belief that banks are only too eager to help us. All those advertisements on the television and call on your mobile do indicate that. But, when you approached the bank for availing of a home loan, it rejected your application, citing some reasons that seemed beyond your understanding. It seems how you handled your credit and debit cards also has a role to play in you getting a home loan or otherwise.
This is why it is better to know what not to do — we mean things that you might have considered insignificant — if you are nurturing the hopes of securing a home loan in future.
- You may be averse to the idea of living on credit. Living under a financial liability does not suit your sensibilities. However, living by this rule might not always be beneficial. While a poor credit history works against you, no credit history does somewhat the same. In case you need credit in future, banks may not be much thrilled to know you have no credit history at all. Financial institutions like to know about a customer's financial behavior before granting them a loan; a credit history helps them do it.
- We feel ill-used when credit card companies or other institutions jack up our bills and expect us to pay the same. Disillusioned and hurt, we might decide to do nothing at all about it, no matter how many times the agents call us or send us warning emails. This sort of behaviour reflects poorly on you and would work against you. No matter how small the amount was, the credit history would always reflect such incidents as proof of our indiscipline.
- Only because you are eligible to avail of a loan worth Rs 1 crore does not mean you must enjoy the limit to the fullest. It is not just your repayment record that impresses upon banks that you are financially prudent; how you deal with credit also has a role to play in the same. Any frivolous activity in this regard is going to reflect poorly on you. Even otherwise, it might not be a good idea to overburden yourself with huge credit.
- Without giving it much thought, you have been calling banks to know about their loan products, etc. You are also engaging with them in such a way that leaves the impression that you might be serious about buying a product. No fault of your for you were only trying to gain knowledge. However, banks might not take it kindly upon knowing that the whole exercise was only an attempt by you to gain information.
- Owing to a lack of understanding, you might accept the offer of banks to get credit cards made (do they not call you often for the same?). They are likely to help in your hour of need. What could be the hard in keeping multiple credit cards anyway if you do not buy things impulsively, you think. Well, you thought wrong. By and by, keeping multiple credit cards also amounts to managing each one of them prudently. These plastic currencies are something to adorn your wallets with. This would indicate towards your lack of understanding of finances.