Rathin should know that the process of sanctioning loans has undergone a change. Earlier, it was easy to acquire loans and credit cards with limited documentation. Today, banks refer to the credit information bureaus to check the credit history of a borrower. If the borrower has a poor record of repayment, or instances of default, banks may refuse loans. Rathin needs a clean track record as a borrower to get loans, and to get a good rate on his borrowings. This is even more important as Rathin plans to borrow for his own hospital, and might need more credit to build and run it. Rathin can request for a credit score from the credit information bureau. He should then initiate the process of cleaning up his records.

He should get in touch with the bank whose credit card payments he defaulted on, and seek a negotiated settlement. He should also request the bank to notify the bureau, only after which his credit score will be modified. He can then go back for new loans. Rathin should keep in mind that good credit habits are immensely helpful while applying for loans. He can avoid delays in processing if he has a good credit history and score. As a professional with varying income levels, and need for loans to move ahead in his profession, it becomes even more important to establish his credentials with his lenders.

Content on this page is courtesy Centre for Investment Education and Learning (CIEL).
Contributions by Girija Gadre, Arti Bhargava and Labdhi Mehta.