By Soniya Gaonkar on Nov 4, 2021 10:00:00 AM
A credit score is a three-digit numerical representation of your credit history. A credit score typically varies from 300 to 900 points. Your credit score is calculated using information from your credit history. All secured and unsecured loans, as well as any other debts you may have or have had, are included.A credit report will include the following information:
- Record of credit amount availed by you
- Record of repaying the loan amount
- Due and settled credit card bills
- Late payments and/or defaults on past credit amounts
- Credit cards details held by you
- Loans against your name
How Much Cibil Score Required For Home Loan?
When it comes to house loan applications, CIBIL scores are quite important. In reality, it is a primary criterion used by banks to determine whether or not to execute a house loan application.
The bank will check your credit score and credit history when you submit your completed home loan application. It will most likely reject your application if your credit score is poor and you have a negative credit history. Your home loan application will be handled faster if you have a strong CIBIL score.
While no uniform score exists, every bank has a minimal CIBIL score that is used as a cut-off or indicator when accepting or rejecting applications. In general, 750 and above is considered a good score, 350 -750 an average score or maybe unacceptable and below 350 would be considered poor.
What Is The Minimum CIBIL Score For Home Loan?
An excellent CIBIL score for a home loan starts at 700 and goes up from there. The closer you get to 900, though, the more confident the creditor will be in your ability to repay the home loan. You can acquire financing up to 85 percent of the total cost of the home if you have a decent credit score and meet other conditions set by the bank.
How Is My CIBIL Score Used For Home Loans?
CIBIL analyses your eligibility for a home loan basis the following factors:
- Payment history: Lenders look for a pattern of late payments and defaults, which can make it difficult for a borrower to have a loan approved.
- CIBIL Score and Report: Because it defines the borrower's credit health, it is one of the most important elements that affect the likelihood of loan approval.
- Income and employment status: If the loan application is granted, these facts assist the lender in determining the borrower's ability to repay the debt.
- EMI to Income Ratio: Borrowers who have an EMI that is less than 50% of their monthly income have a better probability of getting a loan. If the borrower has other loans to repay, the interest rate will be lower.
- Account Information: Lenders examine the number of claims filed and those that have been written off if any have been.
- The address of the house is: Some lenders will assess your home loan eligibility based on the location of the home you want to buy.
- Papers pertaining to real estate: You have a better chance of being approved for a house loan for the same home/property if you have property papers that have no record of disputes linked to the land or home.
How To Check Your CIBIL Score Online?
You can check your CIBIL score online by going to CIBIL's official website. You'll find an application form on the website that you'll need to fill out with identifying information such as your name, date of birth, address, phone number, income, identity and address verification, and any loans you've taken out.
You will be led to the payment page after filling out all of these details and submitting the form, where you will have the option of paying the mandatory charge of Rs. 470 using your credit card, debit card, or net banking.
After you've made your payment, you'll be taken to an authentication page where you'll be asked 3-5 questions regarding your loans and credit cards before continuing. After you've verified your identity and authentication is complete, CIBIL will email you your score within 24 hours.
Knowing your CIBIL score before applying for a mortgage would greatly lower your chances of getting turned down by a lender. If you discover that your score is low, you can work to raise it.
How To Improve Your CIBIL Score For A Home Loan?
Don't worry if your CIBIL score isn't up to par for the housing loan schemes you want to apply for. With a little financial discipline, you can rebuild your credit history and increase your credit score so that you can eventually qualify for a home loan.
Here Are A Few Tips That You Can Follow To Improve Your CIBIL Score:
Make sure you pay all of your bills on time and in full. Part payments will still be marked as overdue in your report, and banks don't like late payments. Don't go above your credit limit. To maintain a good credit score, keep your credit use low and your outstanding balances low.
Regularly monitor your accounts (both single and joint accounts) to ensure that neither you nor the joint account holder misses a payment at the end of the month. Keep track of your credit score and history by reviewing your credit reports on a regular basis and correcting any inaccuracies.
Rather than having an excessive number of unsecured loans, attempt to maintain a healthy mix of secured and unsecured loans. It will aid in the improvement of your credit score.
Meanwhile improving your CIBIL score, choose and select the real estate projects you are interested in. In case you are looking for a spacious and affordable 2 or 3 BHK home in Pune. Kohinoor Group, one of the most trusted real estate developers in Pune offers a plethora of options in Hinjewadi, Tathawade, Sus, Wakad, BT kawade road, etc.