ALTERNATE CREDIT SCORE

Alternative Credit Score acts as one of the prime criterion for loan disbursement for an individual. Credit Score has positive co- relation with income.

Many individuals have thin or non-existent credit files. It indicates that giant U.S. credit bureaus don't have enough information about finances of many individuals and hence they are not assigned any credit score, a figure generated via statistical models that examine outstanding borrowing, history of payments and debt loads. Banks use credit scores to determine eligibility and pricing for mortgages, auto and other loans.

However, this group of people having proper income but devoid of necessary credit score is increasing in number which is no less significant and opportunities are opening up for them with extensive effort from the financial institutions who are developing credit values of these people on the basis of what is today popularly termed Alternate Credit Score. It runs parallel to regular credit scores, risk profiles are updated on the basis of diversified data like rent, utility, child care, medical, and other payments. Banks are also coming up in hurried pace to tap this un-trodden territory and it may see a sea change when lot of people will shift more towards banks and move away from high interest bearing payday lenders.

However due to lack of collective data and information of either parties with each other, there remains a vide gap of co-ordination and it may happen that many among the credit seekers fall in hands of several pay day lenders or may end up consuming several products that otherwise wont have a valid presence in their port-folio. One necessary point to remember is the appropriate data should be with the banks and the degree of authenticity is worth mentionable in this Alternate credit Score method.

Thanks

Pamela

USA Insurance Sector - Slow Down

Recession in Global Economy has definitely created a huge impact on world market and insurance sector has also been hit by the financial slow down.

The catastrophic impact has become prominent with several millions being wiped out from the industry and many insurance giants witnessing sluggish growth and even negative return since last year as compared to returns booked and revenue generation analysis on quarterly basis.

Let us brush through a few points to carry forward the analysis.

Several millions were invested in financial institutions according to the portfolio set up which had badly affected the insurance sector on a whole.

Going by the available data, Hartford’s financial erosion reached around $2 billion during third quarter of 2008 as compared to $850 million gain during the same period the year before. MetLife’s accounts witnessed shooting up of costs in leaps and bounds with more than $ 1 Billion draining out to meet the claims and benefits. With rising cost and dampening effect on profit margin Insurance companies coughed large sum of money with little margin to fall back on.

Analyzing the problem from economic point of view, the gross approach of portfolio build up and direction of monetary flow boomeranged in many ways fuelling the problem. The portfolio had major exposure in fixed maturity investments like bonds mainly corporate bonds and with lesser credit liability; the insurance companies are witnessing fast erosion of asset value.

With the fall of value of the bonds, the claims and benefit payments are getting hard for the companies, drawing them to the verge of facing the problem of survival.

The most likely effect of this scenario may be total government assistance to sail through the tough period as well as several mergers and acquisitions may occur.

The question of survival now hovers around for most of the insurance companies.

Thanks

Pamela