What is a CIBIL/Credit Score
CIBIL/credit score is a three-digit number that ranges from 300 to 900. Every individual who has once availed credit (credit card or loan) will have a credit score.
A higher score denotes that the individual is creditworthy and has repaid all his obligations in time. However, a lower score does not necessarily mean that the individual has not paid his/her dues in time. A new borrower will have a low or even zero credit score.
In India, the credit rating provided by CIBIL is accepted by the majority of financial institutions. Hence, it is also known as CIBIL score.
What is a Good CIBIL Score for a Home Loan?
A good CIBIL score for home loan is anything above 750. When you applying for
home loan, 750 credit score is considered satisfactory for any secured and unsecured credit.
How is My CIBIL Score Used for Home Loans?
Lenders use your CIBIL score to determine whether you are eligible for home loan. They perform a credit enquiry to check the same.
Lenders also check your credit report during such enquiries. Your credit report contains all the details that influence your CIBIL score.
How to Improve Your CIBIL Score for a Housing Loan?
You can improve your CIBIL sore by repaying your existing debts in time. Generally, your CIBIL score is high if you use a credit card and make timely repayments.
Using a credit card is one of the easiest and quickest ways to improve your CIBIL score. You only have to do the following -
- Pay the total payable amount in time. Paying the minimum amount due decreases your credit rating.
- Utilise only 30-40% of your credit limit. Using more also lowers your CIBIL score.
Additionally, you must also refrain from applying for multiple credits at once. Each credit enquiry following an application will lower your CIBIL score.
What is the Minimum CIBIL Score Required for Home Loan Sanction?
The minimum CIBIL score for home loan sanction is 750. However, some lenders may offer you a loan against a lower rating since these loans are secure.
Also Read: How Much Home Loan can get on Salary?
