Ever hear the term ‘credit history’ come up in conversation? Well to give you some context — if you have large financial goals for the future, chances are, you’ll apply for a loan at some point in your adult life. And a key factor that will enable you to get approved for these loans is your credit history.

Let’s examine a couple of pointers to keep in mind:

1. Financing large purchases usually requires a loan

There are two ways to finance a large purchase. Through your savings, or by taking on a loan. Typically for large purchases like a home or a car, taking a loan makes sense given interest rates are affordable, and we typically don’t maintain that much liquidity in our bank accounts.

Taking the example of a home loan, you’ll need to pay a down payment upfront, this is typically around 20% of the total price. And the balance is structured as EMI payments over a specific duration.

2. How do you get a loan?
   
   When applying for a loan – yes, there’s some paperwork involved. The lender evaluates your credit-worthiness as a borrower. Basically, they assess how likely you are to default on your upcoming loan payments. The lower the probability, the better your chances are of getting a loan. Especially one with favorable terms.
3. How does a lender figure out your credit-worthiness?

   Your credit-worthiness is determined by your credit-score. What is a credit-score you ask?
   a) It’s a number between 300 and 900 that signifies how ‘good’ a borrower you are.
   b) The higher the score, the better a borrower you are.
   c) Ideally, your score should be 700 and above. 750+ is considered ‘excellent’!Different credit bureaus calculate your score based on their own algos, but broadly speaking, these things matter:
   a) How regular you’ve been with repayment of prior loans (if any)
   b) How much existing debt you have
   c) How long you’ve been a responsible borrower.

4. How do you build your credit score?

   Start by getting a credit card – even if it’s a low limit. Gradually work your way up to higher limits, as you build up your score. Duration matters, so start building that score as early as possible. But remember, it’s still never too late.As mentioned above, it also ties in to being a responsible borrower. The best time to get a credit card is as soon as you start receiving an income in your first job.

5. Unsecured vs. secured loans

   To put it as simply as possible, you can get approved for a loan either with collateral – secured loans, or without – unsecured loans.Home loans and car loans are examples of secured loans. Personal loans and credit cards are termed as unsecured loans. For the most part, interest rates are lower on secured loans. This is because they are considered lower risk for the lender, as there is always the backup of collateral in case of default (i.e., if you’re unable to repay your loan).We hope this little checklist helps!  Building your credit score starting in your 20s will only help achieve larger financial goals as you foray into adulthood.Of course, there are tons of questions you’ll have during the process. But nothing that can’t be figured out. All we say is Your Money, Your Way!

The post Why Building Credit History Should Be a Financial Goal In Your 20s appeared first on The Pink Journey.

Let us get the answers to these questions with some business eminent personalities and experts who will share their expertise and knowledge. We will get to know how can a budget impact the economy. These experts will share their insight on what kind of budget we can expect, what government should take care of, how the budget can impact a business, individual, student, working-class and everyone. They will be discussing on what are the key focuses of this year’s budget, how will it help the economy which is suffering from the pandemic and, how will the budget strengthen the economy.

Saajan R. Thakkar, Chief Financial Officer, Kulfi Collective

With regards to ESOP tax deferment for startups, in the last decade or so, the Indian Startup ecosystem has become a key force that will lead India’s future growth. Currently, tax on such ESOP gets levied at the time of exercise at the fair value of ESOPs. This will save the employee from the tax burden on the notional amount and the tax payout will occur only on the actual realization of cash against such securities.

For clarity on Crypto transactions and tax, there has been a significant surge in crypto investors within India and also new players are emerging within the industry to cater to investors’ needs. Also framing taxation laws around it would clear the ambiguity at the investor’s end and thus avoid any potential conflicts with the taxation authorities. If at all the ban is announced on the existing set of cryptocurrencies as an asset class, what will be the implication of it for the existing set of investors? With the relief for individual and salaried taxpayers, It has been a long time since the current threshold limit of income was set on which there is no tax. For a certain corporation, the current maximum tax rate is 25% and thus it will be the right time to revisit the 30% maximum tax rate of individuals.

Tara Singh Vachani, Managing Trustees- Max India Foundations 2.0

During the challenging times of COVID-19, children have been forced to grow up at a pace faster than their previous generations. Owing to constant unpredictable circumstances such as the adoption of, and adaptation to, digital media, ambiguity around educational institutions opening and shutting down, children have undergone mental turmoil. Further, there exists a gulf between the number of children pursuing education in India and the resources available to them. Our aim must be to reduce this gap from widening – through alternative and immersive education models such as social-emotional learning – and offer equal opportunities to each child to enable society to realize its full potential.

Anmol Chawla, Director- VRAKSH Management Private Limited.

The pandemic has inspired many women to step outside of their comfort zones and gather the strength to hold their heads independently high in this society. Earlier, Small firms were neglected in the budgets. The government should take care of small and home-based businesses, where women not only confront societal restrictions but also lack financial security and savings. As 91% of working women does not have the higher education and skills for job markets, they are stuck in informal sector.

According to the indiatogether.org, the total women graduate in Science, Technology, Engineering and Mathematics (STEM) in India is nearly 43%. The government could establish some courses and awareness programmes for women to encourage their active participation in technological advancement. This will encourage women empowerment and also contribute to the literacy rate of women. As of 2021, according to the National Statistical Office, female literacy rate is 70.30% only. And not all 70.30% have access to an advanced education system.

Budget 2022 should provide incentives and subsidies to the working women, to motivate them and contribute to the recovery of India’s growth. Tax concessions will allow them to save and invest more in their business as banks consider women less capable of repaying loans than men, discouraging them from being self-sufficient. Women should have more allocations in the budget 2022, as their success and growth will eventually lead to the country’s development.

Varun Duggirala, Content Creator, Podcaster, Entrepreneur and Author of Everything is Out Of Syllabus

We’ve seen over the last two years that how we create, transact and consume is now digital first and with this budget I’m hopeful that there is further simplification of process and boosters for growth added to the digital economy especially to enable us to build digital first businesses. I also feel there needs to be a start to recognizing the needs of the influencer/ creator economy and simplify the process of how individuals and companies in this space can manage the business end of their work. It’s something that will help build an entirely new form of growth.

Malini Agarwal, Founder & Creative Director MissMalini Entertainment, Girl Tribe & Co-Founder of Good Creator Co 

As always, it is my hope to see this year’s budget provide support to areas having a direct impact on women’s health, safety and empowerment. As we already know, COVID has had a disproportionate consequence on women, whether in terms of historic declines in labor force participation or reduced access to critical healthcare resources. I hope Budget 2022 takes steps to reverse these declines, with support for women’s healthcare, education, job skilling, and family-friendly tax policies that ensure a woman never has to choose between her health, career or family. Particularly close to my heart would be initiatives to ensure that women are safe and empowered in the digital world—so that they may fully participate in the new Creator economy without rampant sexual harassment and intimidation that currently inhibits their full potential.

Shilpa Gandhi, ISC Section Head and Coordinator, Jasudben ML School

People have displayed remarkable resilience and adaptability in these uncertain times. It is urgent now to focus on school education. The Central Government along with stakeholders of the Education Sector must work to restore a sense of normalcy and build resilience into this sector. Normalcy will come once efforts are directed towards returning students to the classrooms. Technology alone cannot bridge the gap. The Central Government should appoint more teachers, train them to create classrooms with fewer students like ‘Study Bubbles’ to restore and sustain live interactions in a safe environment.

Resilience needs an appropriate support system. Children’s education has been compromised due to financial uncertainty and constraints. Government should create avenues for educational financing to support parents and schools. Insurance designed to mitigate risks that disrupt a child’s education should be provided. This will ensure continuity and improve accountability of the Education Sector.

 Gopal Upadhayay, Co-founder of Teabox 

The Union Budget will be presented against the backdrop of the country’s third coronavirus wave—vastly significant for a prime agricultural sector like Tea, one of the largest employment-generating sectors in India. Last year, the government had emphasized the health and well-being of the workforce, especially women and children working in the estates, alongside focusing on reinvigorating human capital. We expect the reinforcement of these policies in the sector with a clear roadmap on infrastructure development—particularly in terms of roadways, developing integrated cold chains and an integrated strategy to maximize productivity. Additionally, doubling farmers’ income will also help boost the tea industry.

Faster refund of GST input to start-ups and taxation process simplification for e-commerce companies will encourage investments in the sector. Moreover, specific measures to improve the ease of doing business in the country will help attract more FDI and stimulate production and employment generation. Focus on simplifying rules for B2C exports from India and relooking at the guidelines for FDI in the sector will also attract potential investors to this industry.

Sumit Joshi, Managing Director and CEO, Signify South Asia.

The upcoming budget should prioritize public spending on intelligent infrastructure such as connected LED streetlighting in both cities and villages as these lights are more energy efficient and also help reduce road accidents. Moreover, these intelligent lights can also be powered by solar panels, enabling our villages to become even smarter. To help the country reach its goal of becoming carbon neutral by the year 2070, the government should support companies that offer sustainable technologies such as LED lighting and 3D printed luminaires, by providing them special tax benefits.

We also recommend that the government should allocate more funds to upgrade sports facilities to encourage our youth to play professional sports. There should also be enhanced spending on beautification of our heritage monuments and tourist attractions, as it will help promote the growth of tourism in our country, providing much needed impetus to this sector

Vijay Kumar Mikkilineni, Head of Marketing, TCL India

Reduction on import tariff is something we are expecting, this will help us compete with countries like China, Mexico, Thailand and more. In the last two years, the PLI schemes have provided momentum to domestic and international investments, but so the investment from the Government side for infrastructure building will boost the ‘Make in India’ movement. We have to integrate India into the global supply chain scenario, to achieve that tariff should be equal or less than competitive markets.

Rimo Bose, PR and Branding Manager, TCL India

We are expecting that the import tariff will be reduced, so that our country can match up with the other competing countries like China, Mexico, Thailand and more. Additionally, we have witnessed much of compliance reforms in the last two years, the PLI schemes have indeed helped in domestic and international investments, but we have to keep in mind that setting up manufacturing units might take several years, so the investment from the Government side will boost the ‘Make in India’ movement.

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