Just like your physical fitness, it is important to check your financial fitness. Financial fitness defines how to fit you are to avail financial assistance in emergency situations. There are certain parameters that give you your financial status and financial fitness.
Why is financial fitness important?
Financial fitness is important because it helps in at the time of emergency. In case any unknown situation that requires liquid funds arises, you should be fit enough to seek hassle free financial assistance. Be it a loan or extension on credit limit or credit card, you should have a respectable credit history that will help you get quick assistance.
Characteristics of financial fitness
Here are some of the parameters on the basis of which your financial fitness can be checked:
- CIBIL score above 750
- All bills including utility and credit bills paid on or before time
- Utilization of the maximum credit limit
- Not taking too many loans, even if taken should be both secured and unsecured
- Credit monitoring and reporting of wrong entries
- Vigilance over closed and active accounts
Monitoring your credit is highly important as the theft happens often by misusing the identity. Someone might take a loan in your name and default the same without even letting anyone know.
It is also advisable to pay your credit bills fully and not overdue it. The expenses should be planned at the beginning only and then accordingly the month should be carried out. Once out of pocket will always struggle for the same. Define your limits prior to spending and you will experience efficient life management.
Treating your expenses casually and delaying the bill payments may affect your credit history and the possibility of acquiring a loan keeps getting bleak. Don’t get into the trap, be wise with your expenses and life will be easy.