What is CIBIL score & is it possible to buy a home with low CIBIL score?

What is CIBIL score?

CIBIL or Credit Information Bureau India Limited was found by the Reserve Bank of India in August 2000, under the Credit Information Companies (Regulation) Act.

CIBIL is the first and the most trusted credit bureaus in India. A CIBIL is a three digit number which is calculated on the basis of the financial history of the applicant. It should range between 300 to 900 and people having higher score have better chances of getting loans approved. The closer your score is to 900, the stronger your credit profile.


Is it possible to get a home loan with low CIBIL score?

Just in case if you have a bad CIBIL score, unfortunately, buying a home can be a challenge since you will not be eligible for home loans. You will receive a lot of home loan denials and high-interest rates if by chance you get approved for one. But it is still possible to buy a home.

There are some loans, such as FHA loans, that are available to individuals with credit scores that are lower than what may be required for conventional financing. Your loan lender/bank can discuss specific options for which you may qualify.

How can you improve your CIBIL score?

To help you better your CIBIL score, take a look at some useful tactics that will help you improve it:

  • Set Reminders for Payment and Be Disciplined with Credit

Clean the Credit Card i.e. repay outstanding dues on time when it comes to improving your CIBIL score. Plan your credit card spending in such a manner that you clear off your credit balances before the due date.

Delays in payments not only force you to pay a penalty but also lower your credit score. So, if you find that this is something that you’re guilty of, make it a point to set reminders for payments so that you can tackle them on time.


  • Ensure You Maintain Older Credit Cards to Lengthen Credit History

If you have old credit cards, you should continue to maintain them as long as you are able to pay your bills in full and on time. Realistically, a good credit card account over a long period of time, that has been managed well with timely payments of outstanding, is a blessing in disguise.

This will help you build a strong and healthy credit history, which in turn will help you increase and maintain a good credit score in the future.


  • Customise Your Credit Limit

Your credit utilisation ratio has a significant impact on your credit score. The more you are able to restrict your credit usage as per the allotted limit, the better it is for your credit score.

Reaching the limit has the opposite effect as it lowers your credit score. One way of tackling this is to get in touch with your lender and customise your credit limit based on your expenses.


  • Inaccurate Appeals

In certain cases, CIBIL may make mistakes when it comes to updating your records. This will also bring down your score. An individual must make sure that any errors in your credit report are appealed by the individual on the CIBIL website (www.cibil.com).

Appeal only if you have a valid point of disagreement. So, ensure that you check your CIBIL report from time to time. This will help you identify any errors and correct them on time which as a result, will improve your credit score.


To improve your CIBIL rating score and to be eligible for a home loan, these are some habits that you can weave into your life to improve your credit score over time. Scoring high on the CIBIL score is an indicator of an individual's disciplined expense and repayment behaviour.

After you have implemented them, it will take around 6 months to a year for your credit score to improve.


Home Buyer's Checklist - Kohinoor Group




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