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CIBIL evaluates your payment history, credit handling trends, and existing banking to arrive at a final score. However, this entirely depends on the lender’s policy and it may be better to check with the lender before applying. Besides the credit score and other factors of the applicant, various parameters of the property are also considered by the lenders while granting a Home Loan. Keep reading to know more about how CIBIL score plays a critical role in getting a home loan approved.
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Why is a CIBIL™ score important when applying for a home loan?
A bad credit score will make you ineligible for loans and credit cards. CIBIL score is a three-digit number which defines the credit history of an individual, and ranges from 300 to 900. Nowadays, it has almost been mandated to sanction a home loan only if the applicant holds a credit score of more than 750.
CIBIL™ is one of the four authorized credit bureaus in India which provide a credit score, the others being Equifax, Experian and CRIF High Mark. If your credit score has gone down due to an error, get your report rectified immediately. As a potential Home Loan applicant, you must now be wondering how to calculate CIBIL score for Home Loans? There are many online websites that give you your credit score within seconds, based on the information provided by you. You can use one of these websites to check your CIBIL score.
CIBIL Score: Tips to improve credit score after loan default
If you have a low score, lenders might see you as a high-risk customer with a history of defaulting on payments and might be unwilling to approve your loan application. To calculate the credit score, CIBIL evaluates the past credit repayment history, number of loan accounts, loan tenure of the last seven years. This is an excellent decision, especially since a home loan has several advantages, the most important being that it gives you the ability to get your own home. It is a human tendency that when one bank rejects a credit card or personal loan, we apply to other banks for the same.
So, it’s always desirable to have a higher CIBIL score in terms of the upper limit. If you or a loved one needs a home loan, then reach out to Tata Capital today. You can avail reliable consultation on your financing options, as well as your CIBIL score. Also, you can take advantage of Tata Capital’s competitive interest rates, multiple financing options, and flexible repayment options. The CIBIL score is a measure of your ability to repay loans.
FAQs about CIBIL or Credit Score
CIBIL will notify you about your existing score through an email within 24 hours. Make sure you read the loan document thoroughly and clear your doubts before signing on the dotted line, so prevent yourself from getting caught unaware in the future. If authentication fails, you can fill and send a hard copy of the application to CIBIL by mail. CreditMantri is India’s No. 1 site for Credit Analysis and Free Credit Score Online.
However, home loans are normally hefty amounts and last for years, sometimes even decades. Therefore, when lenders consider loan applications, they need to be extra cautious. To ensure repayment, they determine your capacity using several parameters. CIBIL score is one such, in fact, the primary determiner of your home loan eligibility. CIBIL Score determines your eligibility for securing a loan. Having a loan or multiple credit cards does not negatively impact your score.
CIBIL or Tans Union CIBIL is “Credit Information Bureau Limited” set up in the year 2000 by the Reserve Bank of India with an aim towards minimising credit-related risks. This bureau provides loan lenders with the borrower’s CIR and Credit Score. That said, a score of 700 and above is still good and should suffice for most lenders. A higher CIBIL score translates to swifter loan approval, on more affordable terms.
The most important thing before availing of a home loan is to have a proper insight into documents. Priorly preparing documents makes the process of a home loan simpler & smooth. These documents help banks to check your eligibility for a home loan. This helps you consolidate all your debts and pay them all off at once while creating a new repayment schedule based on your financial preferences.
To get a home loan that matches both your CIBIL score and your debt-to-income ratio, use a Home Loan Eligibility Calculator or simply before applying and avail home financing on personalized terms. Single-step verification here gives you instant approval through a customized home loan deal. Your CIBIL score, in simple terms, is a 3-digit figure ranging between 300 and 900. CIBIL evaluates your repayment history, credit handling tendencies, and existing finances to arrive at a justified score. Clearing dues and other liabilities is certainly a great move to improve your CIBIL score. However, it will take a few months for the improvement to reflect in the report.
The age of your credit history is the number of years that have passed since you opened your first credit account. CIBIL considers the average number of years for which you have been holding a credit account. Having a good balance of secured loans as well as unsecured loans helps to boost your score. To maintain a high score, you need to be prompt with your monthly credit card bill payments as well as loan EMIs. If you are delaying your payments or are defaulting on EMIs, it will hamper your score. A recent CIBIL analysis revealed that 30-day delinquency can reduce your score by 100 points.
If you have a lower CIBIL score and your co-applicant or guarantor has a CIBIL score above 750, then some banks may sanction the Home Loan applied. However, it is to be noted that this method is not guaranteed to get a Home Loan with a low CIBIL score. Such cases are rare, and it is up to the discretion of the bank to sanction a Home Loan where one of the applicants has a lower CIBIL score. Loan Against Property is for individuals seeking loan against an already existing property.
However, they may offer you a plan after going through your other financial details and eligibility parameters. As you may have understood by now, CIBIL score plays a huge role in securing a housing loan. In case your credit score is not up to the mark, no need to fret and worry. By following certain financial discipline, you can easily improve the credit score record and make yourself eligible for the loan.
Home Loan Eligibility: What you Need to Know About your CIBIL Score?
Do not worry -- even those who do not have the credit score required for Home Loans can avail of good Home Loan deals. Home loans are big-ticket size loans and the repayment tenure usually ranges between years. These factors increase the risk factors for lenders as it gets extremely difficult to judge whether the borrower will make timely repayments or not. The cost of purchasing an apartment or a flat is prohibitive, leaving a home loan as the rescuer. Many things are taken into consideration for banks to accept your loan application.
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