Satish Mehta is the co founder and director of Credexpert - a credit and debt counselling company. Credexpert counsels individuals on matters related to their credit report & score and handholds them throughout their credit life cycle. Satish was the founding MD of India’s first credit bureau – CIBIL and has experience spanning over 33 years in the area of housing finance, consumer finance, business development, training, credit information and management consultancy. He can be contacted at firstname.lastname@example.org
The concept of Financial Planning is surely better known than Credit Counselling. But let me begin with decoding each concept…step by step!
Financial Planning, at its simplest can be defined as a process wherein a Financial Planner would examine your current financial situation, understand future financial goals and then develop a customized plan for you. This is the process. Next, let me list down the broad steps taken by a Financial Planner:
- Understand and examine current financial situation
- Establish goals – Buying a new house, retirement planning etc.
- Develop a step by step detailed financial plan customized as per your needs
- Implement the financial plan to help you protect your assets and grow your money
- Review and revise the plan as required
- Understand and analyze your current liabilities – loans, credit cards, EMI
- Guide you on how to read and understand your credit reports and scores
- Develop solutions and strategies to improve credit scores
- Handhold you throughout the credit life cycle process
Let me explain this to you with the help of a story. Let us assume Mr. Aam Aadmi – an investment banker! He has set certain goals which he wants to achieve at different stages of his life.
But a fact that cannot be ignored is that Aam Aadmi might have to take a loan for his car, house or child’s education! Now what if Aam Aadmi’s loan is rejected due to a poor credit report and score? All because his liabilities were not examined and neither was his credit behaviour. Aam Aadmi was taught to save for the rainy day but not about the importance of repaying loans on time and maintaining a healthy credit life!
Credit Counselling could have helped Aam Aadmi accomplish his goals! Let me list down few benefits from Credit Counselling: