A home loan approval depends on many factors, one of the most important being the applicant’s CIBIL score. The CIBIL score determines your creditworthiness, influencing the chances of securing a loan, and getting good terms on the loan. TransUnion CIBIL is a credit bureau that gives a credit score based on financial history. Hence, your CIBIL score is the Credit score given by CIBIL and is known as the CIBIL score.
Your CIBIL score is a complete overview of your credit history as a three-digit number between 300 to 900 provided by TransUnion CIBIL. One of the most reputable credit bureaus, Creditworthiness is assessed for individuals and businesses across the country. It will include all your debts, including credit card usage.
If you want to know your credit score, you can get a credit report at a minimal charge from CIBIL. Most lenders consider the CIBIL score as a prominent home loan criterion in India, which can make or break your application.
Hence, it is better to analyze your CIBIL score before applying for a housing loan.
Your CIBIL report will contain the below-mentioned data.
- Report of the credit utilization
- Repayment history of loans and credit card bills.
- Default payments or late loan payments
- Bank accounts
- Recently submitted loan and credit card applications
Advantages of having a high CIBIL score
Generally, a CIBIL score of more than 700 is required by most lenders to consider an applicant for a home loan. Mentioned below are the advantages of possessing a high CIBIL score.
- You can leverage it during negotiations with the lender.
- Receive a lower interest rate on a house loan
- Get a higher home loan amount
- Take advantage of quick loan processing
What is the minimum CIBIL score for a home loan?
If you want to know the precise minimum CIBIL score for a home loan, check with multiple lenders. The score varies as per the lender’s lower acceptance limit.
- On average, most lenders will grant loans for CIBIL scores above 700, subject to fulfilling other criteria and the type of loan you are applying for.
- A CIBIL score between 700 and 750 is considered good, while a 750 or above CIBIL score is excellent.
How does a decent CIBIL score increase your chance of getting a home loan?
If you are guessing whether or not your CIBIL score will increase your chances of getting a home loan, then the answer is yes. With a decent CIBIL score, the whole process of eligibility and approval of the application for a home loan becomes quick. But the opposite of it is also true. If your CIBIL score is less, it will decrease your chances of getting a home loan, and lenders may reject your application.
How to improve the CIBIL score for a home loan?
If your CIBIL score is not good to apply for a housing loan, you do not have to worry because it is possible to improve your CIBIL score. With this CIBIL guide, you can check your home loan eligibility online.
Financial discipline is the best way to enhance your CIBIL score. It will become easy to get a higher amount on your home loan once your CIBIL score has improved.
Here we have mentioned some tips which you can easily follow to enhance your CIBIL score.
- If you are paying EMI or payments for existing loans or have any debt, you should repay the same at the earliest. If you pay your EMI in parts, it will be treated as overdue in the official papers. Your lender will not appreciate delayed payments, and it may also hinder the approval of your home loan.
- Keep in mind not to consume all credit limits. Make a habit of checking your credit utilization regularly. Keeping your credit score high will benefit you.
- It is important to regularly check every bank account (it does not matter if it is a single or joint account). You can use it to ensure that no payments are due at the end of the month.
- Make a habit of checking your credit score and history of transactions at a regular interval of time.
- Be sure that you do not have a lot of unsecured loans. Maintain a balance between your secured and unsecured loans. It will increase your credit score.
Most online sites clearly state the minimum credit score required to apply for a loan. Do not apply for a loan if your score is lower, as it increases the chances of a rejection that will impact your credit score negatively. Reach out to the lender’s representative to get doubts cleared before filing a loan application even if you meet the credit score requirement.