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Is It Safe To Check Your Credit Score Online?

Adhil Shetty

Q. How beneficial is it to invest in PPF?
PPF is a safe scheme with returns guaranteed by the government. It is the go-to option for risk-averse investors looking to create wealth for the long term. You can open a PPF account online through leading banks if you hold a savings bank account with them. It offers the flexibility of depositing between Rs 500 to Rs 1,50,000 in a year, either as a lump sum or divided into monthly payments. The biggest benefit for investors of the scheme is the Exempt- Exempt- Exempt (EEE) status that not only provides for tax relief under Section 80C for upto Rs 1,50,000, but also exempts you from tax for interest earned through the term and on the total amount on maturity.

Q. Is it safe to check your credit score online?
A. It is perfectly safe to check your Credit Score online by way of a soft query, and there are many websites that provide this service for free, including BankBazaar. To elaborate on soft and hard queries, when you make personal enquiries about your report, it is considered a soft one and will not hurt your score. But when you apply for a loan or credit from a financial institution, the lender in question will make hard enquiries. Too many hard enquiries over a period of time can have a negative impact on your credit score.

Q. What is the role of RBI in the Indian banking system?
The RBI is a Central Bank that engages in functions such as overseeing of monetary policies, keeping reserves of all commercial banks in India, issuing currency and managing foreign exchange. It also acts as the Lender of Last Resort for banks in crisis. The RBI lays out rules and regulations for the banking sector in the country to ensure smooth transactions and efficient fund transfer, the maintenance of minimum balance to secure depositors’ money, and enabling banks to maintain reserves with the RBI. Furthermore, the RBI determines various policy rates in India. The Repo rate for instance, is considered the key policy rate which indicates the rate at which banks borrow from RBI. The RBI increases the Repo rate to tackle inflation and decreases the rate to increase the circulation of money in the economy.

Q. How did equity mutual funds fare during the 2008 financial crisis?
During the 2008 financial crisis, the market indices in India fell along with global markets. The Sensex, for example, fell from a December 2007 peak of around 20,000 to below 9,000 by October 2008. Naturally, the value of mutual funds also fell in tandem. However, by the early months of 2009, the recovery had begun. By October 2010, the Sensex had set new highs and equity investors who had continued investing through the slump would have come out of it with excellent gains, which is our biggest learning from the crisis: markets will rise and fall, but the intrepid investor must march on regardless.

Do you have any query on your money matters? Post your queries @bankbazaar on Facebook and Twitter with the hashtag #AskAdhil. Bankbazaar CEO Adhil Shetty will answer all your queries at the earliest.