As an NRI, your CIBIL score is very important. Your CIBIL score is used to assess your creditworthiness when you apply for a loan or credit card. A good CIBIL score can help you get credit on more favorable terms, such as lower interest rates. This can save you a lot of money over time. It is common for landlords and property management companies to check your CIBIL score when you apply for an apartment or house on rent. It is also common for employers to look at the applicant's credit history when applying for jobs that involve financial responsibilities. Let's take a look at how NRIs can build and manage their credit scores while abroad.
How can NRIs build credit?
Building credit as an NRI can be challenging, especially if you have limited financial activities in India. Here are some ways you can go about establishing a credit history:
Open an NRE or NRO account:
Consider opening an NRE (Non-Resident External) or NRO (Non-Resident Ordinary) account with an Indian bank. These accounts will act as a starting point for your financial activities in India.
Apply for an NRI credit card:
Some Indian banks offer credit cards exclusively for NRIs. These cards are designed for NRIs. They are usually easy to qualify for as they often come with lower credit limits.
Secure a Fixed Deposit (FD) loan:
If you have a Fixed Deposit (FD) with an Indian bank, you may be eligible for an FD loan. This type of loan will also help you build credit.
Maintain a local address:
Make sure to maintain a local address in India, even if it is your family home. Having a permanent address is good for your creditworthiness.
How to Manage CIBIL Score for NRIs
Increasing your credit score is just the first step. It is equally important to manage it responsibly. Let’s take a look at how to manage your CIBIL score as an expatriate.
Check regularly: Stay updated on your CIBIL score by checking your credit report regularly. You can request a copy of your credit report from CIBIL or other credit bureaus in India.
Pay bills on time: It is crucial to pay your bills like credit card bills, loan EMIs, and utility bills on time. Late payments can negatively impact your score.
Use credit wisely: Avoid maxing out your credit cards. Try to keep your credit utilization (credit card balances divided by credit limits) below 30%, as high utilization can lower your score.
Avoid multiple credit applications: Every time you apply for credit, a “hard inquiry” will be made on your credit report. Too many inquiries in a short period of time will lower your score. Apply for credit only when necessary.
Maintain old accounts: The length of your credit history is important. Do not close old credit card accounts as they contribute positively to your credit history.
Monitor your credit report: Review your credit report regularly to check for errors or discrepancies.
How to Check Your CIBIL Score for NRIs
As an NRI, it is essential to check your CIBIL score to monitor your credit score. Let’s see how to access your CIBIL score:
Online Credit Bureau: You can request your credit score and report by visiting the official websites of credit bureaus like CIBIL, Equifax, or Experian. Some websites may charge a fee for this service.
Credit Monitoring Services: Credit monitoring services like Creditmantri and PaisaBazaar allow you to check your CIBIL score and report for free. These services also provide additional features like credit alerts and personalized recommendations.
Banks and Financial Institutions: Some Indian banks and financial institutions allow you to check your CIBIL score for free if you have an NRE or NRO account. Check with your bank to see if this service is available.
Maintaining a good CIBIL score is essential as an NRI. And it is something that can be achieved through the right strategies and responsible financial management. By building credit, making timely payments, and monitoring your credit report, you can ensure that your credit score keeps rising, no matter where you live.
