You Need Good CIBIL Score for Home Loans

This stuff will guide you in enhancing your CIBIL score. Before discussing the right methodologies, first understand how much you need to improve on your score.

28 Aug,2016 05:00 IST 1449
You Need Good CIBIL Score for Home Loans

Are you worried about your home loan rejection?

What should be your CIBIL Score?

How can you improve your CIBIL Score?

If you are looking for the answers to these questions, you are about to land on the right space. Yeah! This stuff will guide you in enhancing your CIBIL score. Before discussing the right methodologies, first, understand how much you need to improve on your score. CIBIL trans union score is calculated on the grade of 900. If the credit score is above 700, it is fine. Above 700 credit score makes the winning home loan application. But in case if your credit score falls below 600, aim higher and remember there are lots of scope for improvements.

Here’s how you can make a good CIBIL report and create a winning situation for yourself –

Repayments on time  Repayments must be done without falling on the timelines. One must utilize the maximum credit limit of his credit cards. But simultaneously, prepayments should be done for the outstanding amounts. This will enhance your CIBIL score.

Joint Home Loan – If your credit score is not good, search for a co-applicant in home loan. As the co-applicant will share the equal responsibility of your repayments, his credit score will also be taken into consideration on an equal basis. So, if your credit score is below average, apply with any co-applicant whose credit score is high. Co-applicants can be husband & wife, father & son, brother & sister or sister & sister and some other specific relations are also acceptable. Brother and Brother can also apply on a joint basis, but their address should be the same.

Enhance your Credit Limit – If you have good repayment habits, it is likely banks will offer you an increased credit limit. That means bank has gained confidence in your financial portfolio. Leverage the situation and get your credit limit enhanced by the bank. It does not mean you have to spend more and more and exhaust all the credit facilities. Always spend within your repayment capacity.

Leverage online lending platforms – There is another mantra for improvement of your CIBIL score rating. Unfortunately, if you have a low CIBIL score, you can take home loan from a peer to peer lending platform like Lend box, Vote4Cash, i-lend. Justify the reasons for your poor credit score, and this will help you get registered on these platforms.

Keep the credit card running – If you have good repayment history for any credit card, keep that account running.  The timely payment history would be boon for you. Banks will consider this as an instrumental factor while evaluating your home loan application.

Track your credit report at regular intervals- It’s good to track your credit report at least twice or thrice in a year. Study the report in detail; this will give you a fair idea where you stand. If you track any discrepancy or incorrect information in the report, immediately inform the same to the lender.

The discussion would not be complete if we will not show you how your CIBIL Score is affected

*Note this diagram gives you a fair idea. The actual percentage may vary from the above figure.

You must also note that there are several other factors that do not affect your CIBIL report in any way. These are mentioned below -

  • Qualification
  • Caste or religion
  • Gender and
  • Savings account behavior 

So, do you know your CIBIL Score? Have you calculated your home loan eligibility? 

Disclaimer: The information contained in this post is for general information purposes only. IIFL Finance Limited (including its associates and affiliates) ("the Company") assumes no liability or responsibility for any errors or omissions in the contents of this post and under no circumstances shall the Company be liable for any damage, loss, injury or disappointment etc. suffered by any reader. All information in this post is provided "as is", with no guarantee of completeness, accuracy, timeliness or of the results etc. obtained from the use of this information, and without warranty of any kind, express or implied, including, but not limited to warranties of performance, merchantability and fitness for a particular purpose. Given the changing nature of laws, rules and regulations, there may be delays, omissions or inaccuracies in the information contained in this post. The information on this post is provided with the understanding that the Company is not herein engaged in rendering legal, accounting, tax, or other professional advice and services. As such, it should not be used as a substitute for consultation with professional accounting, tax, legal or other competent advisers. This post may contain views and opinions which are those of the authors and do not necessarily reflect the official policy or position of any other agency or organization. This post may also contain links to external websites that are not provided or maintained by or in any way affiliated with the Company and the Company does not guarantee the accuracy, relevance, timeliness, or completeness of any information on these external websites. Any/ all (Gold/ Personal/ Business) loan product specifications and information that maybe stated in this post are subject to change from time to time, readers are advised to reach out to the Company for current specifications of the said (Gold/ Personal/ Business) loan.

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