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All You Need to Know About Your CIBIL Score

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Credit Score and Magnifying Glass

CIBIL is seen identical to credit score which is a three-digit number that is seen by a lender to ascertain a person’s creditworthiness. It lies between 300 and 900. RBI has licenced four companies in India to access and manage the credit information. CIBIL which started its activities in 2001 has been the oldest and so far the most popular one. The other three are Equifax, Experian and High Mark.

What is CIBIL?

It stands for TransUnion CIBIL Limited which is an Indian company having legal access to credit information of both the borrowers as well as lenders. It has data of around 600 million people including 2,400 lenders belonging to all varieties. It is the most trusted credit information companies in India and every lender accepts its score as genuine.

If you are worried about what is CIBIL score how to check, here is complete information on it.

What is CIBIL/Credit Score?

The score given by CIBIL is referred to as CIBIL/credit score which is often the sole deciding factor to get your loan application approved or denied. It can also affect the borrowing rates in some cases, where a higher credit score makes you eligible for lower rates.

How to Calculate the CIBIL Score?

This score comes from a combination of five components with associated weights. These are

Payment History with 35% weightage, amounts owed gets a weightage of 30%, Length of Credit History is at 15% weightage, Types of credit in use and Account inquiries get 10% each. The combined effect of all these factors gives the credit score, which a potential lender look at to ascertain the risk involved in lending the money to a particular borrower. The higher the score, the lesser, is the risk. Any score above 700 is considered as excellent and lenders are always willing to lend loans to such clients. It’s better to know your credit score before applying for a loan and for that you can make use of any credit score site that offers it for free.

Impacts of Poor Credit Rating

If you have a poor credit score, you can be charged higher interest rates as some lenders follow ‘rate-for-risk’ pricing. As the lenders see you as a risky entity they might lend only a smaller credit limit and if the scores are really bad, your credit application might also be rejected. This is because your low credit score implies; that their money is at risk and they might not be able to get it back in time.

Thus, you see how important is the credit score and what role it plays and hence, you should work towards having a good score. To improve your score there are no shortcuts and any quick-fix efforts can actually backfire. So refrain from trying them.

The right way to improve your Credit score is to set up payment reminders to make payments on time, and pay the highest interest rates debt first.

A good credit score is your ticket to get credit at attractive rates and hence, should be taken care of.

Top Inventory Challenges Encountered By Small Businesses

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Mispicks, out-of-stocks, and oversells are just a few of the most prevalent issues businesses deal with when it comes to product inventory. Undeniably, managing inventory can pose unique and sometimes seemingly impossible challenges. This is especially true for small businesses who are still trying to find their way around.

Fortunately, there is no shortage of ways small businesses can adopt to help ensure these challenges are addressed accordingly, if not totally avoided. If you don’t know where to start, the following are some of the top inventory challenges you should steer clear of at all cost:

Relying mainly on outdated systems

While a manual inventory process is undeniably cost effective, it is also very tedious and time-consuming. More than anything however, a manual inventory process is very prone to human error.

If you have been doing things manually for quite sometime, you probably already know how difficult it can be when you use data, computer systems, and equipment that’s already obsolete.

While investing in a modern inventory software can seem like an expense you can do without, nothing can be farther from the truth. If you look at the big picture, you’ll actually be able to save more in the long run if you invest in a reliable inventory software as opposed to continue doing things manually.

In addition, a great inventory software can also make processes faster and easier. An inventory software will also give your employees more time to focus on other important tasks. Bottom line is you’ll be able to save time, money, and resources.

You practice inefficient inventory accounting

If you employ inefficient inventory accounting, you can expect delays and errors to happen. An inefficient inventory accounting can also cause you to overstock on products since you don’t know exactly the items you have at hand.

There’s no denying you’ll end up losing money with an inefficient inventory accounting in place since you can overstock on items and they can end up sitting in your warehouse for years until it becomes obsolete.

The good news is investing in a new inventory software will not only resolve the issue, it can also help warrant you have accurate data when it comes to inventory and you won’t be spending more than you should.

There is no proper management

In some instances, it’s not always the process or numbers that are to blame. Sometimes, inventory errors can be attributed to mismanagement. Come to think of it, if your inventory staff is incompetent or overworked, they might not be able to carry out their tasks accordingly.

If your inventory staff will not be able to perform their job properly, you can end up with inaccurate data. In worst case scenarios, you can end up with more stocks than you actually need.

That being said, aside from investing in the best inventory software you can find, consider it a wise idea to also invest in the services of people who are equipped with the right knowledge and skills to perform the inventory task correctly.

Wrap Up

While you are likely to encounter challenges when it comes to inventory, it is reassuring to know that there are a lot of ways these challenges can be avoided, if not totally eradicated.

4 Handy Tips to Set Up a Successful Small Business 

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If you have decided to get into a small scale business of your own, you will probably be looking for guidance about what to do and what not to do? You have come to the right place. You won’t be given a checklist or a to-do list, but you can have access to some wonderful tips for setting up your business:

  1. Take Your Family’s  Support

It is important to understand how much of a risk you are willing to take, not just in terms of money, but in terms of time and effort. What is it that you are willing to give to your business? Since it is your own start-up, it is important to have the support of your dear ones to keep you afloat with their moral and motivational support. Keep the goals realistic and in line with the resources available to you.

  1. Ensure you are in the Right Business

If you can find a certain requirement in the market which is not being fulfilled, but if you think you have the knowledge and expertise to fill in the gap, you should shift your focus on that requirement. It is very important to find a source of fulfilment in your expertise area as well.

  1. Make Sure there is a Market for your Product/Service

Rather than assuming what people want and what products you would want to sell, it is best to research the scope of the business. Just because you come across a few people who would be interested in your products, it does not necessarily mean that you should recklessly invest in it . Talk to potential customers and understand the marketability of your product.

  1. Start Small and Grow Big

Go for a small scale start-up rather than assuming the ‘all is well’ factor and investing in a large scale business. The advantage of going small is that it helps you learn the ropes of all the tasks at hand and in case of a failure, the results are not that harsh. If you succeed, you can always take smaller steps towards your growth.

 

There is always scope for growth and many serious steps that needs to be taken in the right direction. Keep learning and keep growing with your business.

 

Trade, Jobs and Growth: Facts Before Folly

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Our new President rails against it, unions denigrate it, and unemployed blame it. And not without reason. On trade, jobs and economic growth, the US has performed less than stellar.

Let’s look at the data, but then drill down a bit to the nuances. Undirected bluster to reduce trade deficits and grow jobs will likely stumble on those nuances. Rather, an appreciation of economic intricacies must go hand-in-hand with bold action.

So let’s dive in.

The US Performance – Trade, Jobs and Growth

For authenticity, we turn to (by all appearances) unbiased and authoritative sources. For trade balances, we use the ITC, International Trade Commission, in Switzerland; for US employment, we use the US BLS, Bureau of Labor Statistics; and for overall economic data across countries we drawn on the World Bank.

Per the ITC, the United State amassed a merchandise trade deficit of $802 billion in 2015, the largest such deficit of any country. This deficit exceeds the sum of the deficits for the next 18 countries. The deficit does not represent an aberration; the US merchandise trade deficit averaged $780 billion over the last 5 years, and we have run a deficit for all the last 15 years.

The merchandise trade deficit hits key sectors. In 2015, consumer electronics ran a deficit of $167 billion; apparel $115 billion; appliances and furniture $74 billion; and autos $153 billion. Some of these deficits have increased noticeably since 2001: Consumer electronics up 427%, furniture and appliances up 311%. In terms of imports to exports, apparel imports run 10 times exports, consumer electronics 3 times; furniture and appliances 4 times.

Autos has a small silver lining, the deficit up a relatively moderate 56% in 15 years, about equal to inflation plus growth. Imports exceed exports by a disturbing but, in relative terms, modest 2.3 times.

On jobs, the BLS reports a loss of 5.4 million US manufacturing jobs from 1990 to 2015, a 30% drop. No other major employment category lost jobs. Four states, in the “Belt” region, dropped 1.3 million jobs collectively.

The US economy has only stumbled forward. Real growth for the past 25 years has averaged only just above two percent. Income and wealth gains in that period have landed mostly in the upper income groups, leaving the larger swath of America feeling stagnant and anguished.

The data paint a distressing picture: the US economy, beset by persistent trade deficits, hemorrhages manufacturing jobs and flounders in low growth. This picture points – at least at first look – to one element of the solution. Fight back against the flood of imports.

The Added Perspectives – Unfortunate Complexity

Unfortunately, economics rarely succumbs to simple explanations; complex interactions often underlie the dynamics.

So let’s take some added perspectives.

While the US amasses the largest merchandise trade deficit, that deficit does not rank the largest as a percent of Gross Domestic Product (GDP.) Our country hits about 4.5% on that basis. The United Kingdom hits a 5.7% merchandise trade deficit as a percent of GDP; India a 6.1%, Hong Kong a 15% and United Arab Emirates an 18%. India has grown over 6% per year on average over the last quarter century, and Hong Kong and UAE a bit better than 4%. Turkey, Egypt, Morocco, Ethiopia, Pakistan, in all about 50 countries run merchandise trade deficits as a group averaging 9% of GDP, but grow 3.5% a year or better.

Note the term “merchandise” trade deficit. Merchandise involves tangible goods – autos, Smartphones, apparel, steel. Services – legal, financial, copyright, patent, computing – represent a different group of goods, intangible, i.e. hard to hold or touch. The US achieves here a trade surplus, $220 billion, the largest of any country, a notable partial offset to the merchandise trade deficit.

The trade deficit also masks the gross dollar value of trade. The trade balance equals exports minus imports. Certainly imports represent goods not produced in a country, and to some extent lost employment. On the other hand, exports represent the dollar value of what must be produced or offered, and thus employment which occurs. In exports, the US ranks first in services and second in merchandise, with a combined export value of $2.25 trillion per year.

Now, we seek here not to prove our trade deficit benevolent, or without adverse impact. But the data do temper our perspective.

First, with India as one example, we see that trade deficits do not inherently restrict growth. Countries with deficits on a GDP basis larger than the US have grown faster than the US. And further below, we will see examples of countries with trade surpluses, but which did not grow rapidly, again tempering a conclusion that growth depends directly on trade balances.

Second, given the importance of exports to US employment, we do not want action to reduce our trade deficit to secondarily restrict or hamper exports. This applies most critically where imports exceed exports by smaller margins; efforts here to reduce a trade deficit, and garner jobs, could trigger greater job losses in exports.

Job Loss Nuances

As note earlier, manufacturing has endured significant job losses over the last quarter century, a 30% reduction, 5.4 million jobs lost. Key industries took even greater losses, on a proportional basis. Apparel lost 1.3 million jobs or 77% of its US job base; electronics employment dropped 540 thousand or 47%, and paper lost 270 thousand jobs, or 42%.

A state-by-state look, though, reveals some twists. While the manufacturing belt receives attention, no individual state in that belt – Pennsylvania, Ohio, Illinois, Indiana and Michigan – suffered the greatest manufacturing loss for a state. Rather, California lost more manufacturing jobs than any state, 673 thousand. And on a proportional basis, North Carolina, at a manufacturing loss equal to 8.6% of its total job base, lost a greater percent than any of the five belt states.

Why then do California and North Carolina not generally arise in discussions of manufacturing decline? Possibly due to their generating large numbers of new jobs.

The five belts states under discussion lost 1.41 million manufacturing jobs in the last quarter century. During that period, those five states offset those loses and grew the job base 2.7 million new jobs, a strong response.

Similarly, four non-belt states – California and North Carolina, mentioned above, plus Virginia and Tennessee – lost 1.35 million manufacturing jobs. Those states, however, offset those loses and generated a net of 6.2 million new jobs.

The belt states thus grew 1.9 jobs per manufacturing job lost, while the four states grew 4.6 jobs per manufacturing job lost.

Other states mimic this disparity. New York and New Jersey ran a job growth to manufacturing job lost ratio of under two (1.3 and 2.0 respectively), Rhode Island less than one (at .57), and Massachusetts just over two (at 2.2). Overall, the 8 states of the Northeast (New England plus New York and New Jersey) lost 1.3 million manufacturing jobs, equal to 6.5% of the job base, but grew the job base by only 1.7 jobs per manufacturing job loss.

In contrast, seven states that possess heavy manufacturing employment, and losses, but lie outside the belt, the Northeast, and the CA/VA/TN/NC group, grew 4.6 jobs per manufacturing job lost. These seven are Maryland, Georgia, South Carolina. Mississippi, Alabama, Missouri, and Arizona.

5 Top Personal Finance Tips

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I think it’s fair to say that whilst most of us have the best of intentions when it comes to our own personal finances, there is usually quite a lot of room for improvement. It might be the case that a few small tweaks to the way you manage your money will suffice, on the other hand, you might need a complete overhaul of the way you go about your personal financing.

Staying on top of your money is quite a big job in itself, certainly a long term commitment and one that definitely should not be neglected in any way. If you are struggling, you are in luck! We have put together some of the best personal finance tips that you should start employing as soon as you possibly can.

1) To have a decent idea about your financial spending, jot down everything you spend money on for on week. This included food, rent beer, literally everything goes. You might think you know and could certainly take a pretty good educated guess but the point is, you will never know for sure and by writing it down you will know for sure.

2) Once you have a list of your weeks spending, look for ways you can shave some spending. A good example is usually cutting back the amount of coffees you have throughout the day. Or if you’re spending too much on parking at work, have a look for some free spaces nearby. Better yet, dust off the bicycle and cycle into work, not only will you be saving money, you will also be getting fit!

3) Pay off your debts each month. If you have spent on a credit card/store card then make sure you pay the balance off in full at the end of each month. If you avoid paying the full amount you will be susceptible to the ridiculously high APR that comes with these things.

4) Spend less than you earn. I can hear you screaming – “why are you telling me the most obvious thing in the world?” Well, you would be very surprised at the amount of people who don’t just spend more than they earn, they spend a lot more than they earn. This is utter lunacy as far as finance goes, the idea of spending money you haven’t got is unthinkable – don’t do it.

5) Understand your finance goals. By setting yourself solid, realistic finance goals, you will be constantly working to fulfill them. For example, know when you want to buy that new car, that new house and know exactly when you want to retire. After you have decided all these things, work your backside off until they are achieved.