Debt Counselling: Sanjay Agarwal

I had defaulted on a personal loan two years back. However, I settled that with a gap of few months. Will the bank give me a clean chit or deny me a loan if I need one in future?
Once you have settled a loan, you will get a clean chit by way of a ‘No Dues Certificate’ from the bank. However, approval of a fresh loan will depend on your overall credit history with the credit bureaus that includes all your credit cards and other loans and the credit criteria of individual banks.

I am 32 and own a credit card of a private bank. I want a higher credit card limit. Will the bank agree to increase the limit or would I need to switch to a different bank?
Sometimes, credit card issuing banks enhance credit limits on their own, depending on the usage of the card and repayment behavior of the customer. They also do it on customer request, for which they normally ask for an application and the latest income details. You should speak to your banker about the process applicable to you. Decide about switching to another bank based on your bank’s response.

What is a decent credit score? Does every bank have different credit score requirements? And, does this differ for every type of loan?
Normally, a credit score does not depend on the type of a loan. Today, there are four functional credit bureaus in India and each has its own score. For the oldest bureau, Cibil, the highest credit score is 900 and the closer you are to that score the better it is. Approval of a fresh loan application depends on overall credit criteria of each bank, which is different, and the credit score is one of the factors that is considered.

I am 32 and run my own logistics business. I have been applying for a car loan since almost a year now. Two banks have rejected my application. I haven't taken any loan before this. I understand banks judge customers on credit histories. Hence, can I take a look at my credit history to check if it has any errors at all? Will the bank be able to share that with me?
Banks have their own credit norms to approve any loan application, of which credit history is just one. Banks are duty bound to provide you the reasons for rejection of your loan application if you ask for it. You may try to convince the bank of your credit worthiness once you know the reasons for rejection. To obtain your own credit history, instead of the bank, contact credit bureaus through their websites, where the entire process is explained in detail.

I earn Rs 1.5 lakh a month and have a Cibil credit score of 600. Still, a public sector bank refused me home loan. What could be the reason and how do I negotiate?

Credit score is just one of the criteria considered for approving a loan application. Banks should provide reasons for rejecting a loan. You should ask the bank and try to convince them about the apprehensions that it may have. Also, apply to other banks or HFCs.

The views expressed are the expert’s own. Send your queries to yourmoney@bsmail.in

Today, Sanjay Agarwal, Senior Vice-President and Group Head - Retail Business Group & Technology Solutions Group - at Arcil, answers your questions