In any home loan application, the lending bank checks the applicant’s credit score to determine his/her creditworthiness. The bank reaches out to credit bureaus to know the applicant’s credit score. While there is no minimum credit score for home loans in India, a score of 750 or above is considered ideal for easy home loan approvals.

Here, we will discuss the ideal credit score for home loans in 2021 and how borrowers can work towards attaining an ideal credit score.

What is a Credit Report and Credit Score?

A credit report is constructed by one of the credit bureaus like Equifax, TransUnion CIBIL™ (Credit Information Bureau of India Limited), Experian, etc. A credit score is a 3 digit number that could range between 300 and 900. The closer the credit score is to 900, the better it is considered, especially when it comes to home loans.

Banks and lenders check an applicant’s credit score to determine his/her creditworthiness during a home loan application. Borrowers who maintain a minimum credit score of 750 or above are generally considered ideal for loan approvals. Borrowers should avoid making multiple loan applications simultaneously. This is because every application may affect one’s credit score negatively. 

A credit report contains all the important information on a borrower which can be used by financial institutions to analyse and offer home loans. Borrowers can check their credit score for free on CreditMantri as it can help in keeping a tab on their score before applying for a home loan.

How Much Credit Score is Good for Home Loans?

A credit score generally ranges between 300 to 900. A score of 750+ is considered a good CIBIL™ score for home loans. Most lenders and banks prefer borrowers with a score of 750 or above.

Does Credit Score Affect Home Loan Eligibility?

A credit score affects a borrower’s home loan eligibility since banks and lenders use the credit score to determine whether to approve their home loan application or not. If an applicant’s credit score is above 750, there is a high chance of getting a home loan application approved. However, if it is low, for instance, 450, then the chances of home loan approval could be very low. Even if the home loan is approved with a poor credit score, you are more likely to be charged high interest rates. 

How to improve my credit score for a home loan application?

Here are some easy ways in which home loan borrowers can work towards improving their credit score:

  1. Timely repayments – Home loan borrowers must ensure that they do not miss any ongoing EMI payments or make any delayed credit card payments. To avoid delays, you can set up monthly reminders for repayments. By making timely payments, an individual’s credit score can improve over time and reflect the borrower’s responsible behaviour in the credit report accessed by lenders.
  2. Low credit utilization ratio – Borrowers can request their banks or credit card issuers to increase credit card’s limits such that they can maintain a low credit utilization ratio low. This can help in improving one’s credit score. It is also important to check credit usage and maintain it at lower levels at all times. Lower credit utilization for long periods shows that one is capable of handling extra credit and allows easier loan approval in future.
  3. Healthy credit mix - To improve credit score for a home loan application, it is advisable to maintain a healthy credit mix that is the right combination of secured and unsecured loans. Too many unsecured loans at any point can negatively impact credit scores and hamper the chances of easy home loan approval. 
  4. Frequently check credit reports - One of the easiest ways to work on credit score improvement is to regularly track credit reports. This can help in eliminating the chances of incorrect information being contained in the report with regards to loan repayments, credit card dues, etc. 
  5. Retain old accounts – A home loan borrower must avoid closing old credit accounts so that lenders can check repayment capacity and the borrower’s capability to manage credit. 


To enjoy the lifelong dream of owning a home, one may have to borrow a home loan. Therefore, it makes sense to work towards improving credit history and credit score as it will eventually result in fetching the best home loan deals that benefit the borrower. Home loan borrowers must aim for a credit score of 750 or above to get low interest home loans at reasonable terms. 

FAQs Credit Score for Home Loan

  1. Can I get a home loan with bad credit in India?

Yes, you can get a home loan with a low credit score in India. However, it is important to know that a home loan with a low credit score may result in a higher rate of interest on the loan. 

  1. Can CIBIL™ defaulter get a home loan?

If an individual has defaulted in the past, it can be very challenging to get a home loan application approved since his/her name may appear in the CIBIL™ defaulter’s list. However, some lenders may approve a home loan application depending on how responsible the borrower has been after the default.

  1. Can I get a home loan without a CIBIL™ score?

A home loan is usually a substantial borrowing and most lenders prefer to lend to borrowers who have a good credit track record. However, many lenders offer home loans to new borrowers depending on factors like job stability, employment category, etc. It is, however, important to work towards a good credit score before availing of a home loan.

  1. What is a good credit score in India for a home loan?

A good credit score for home loans in India is anything above 750. Such a score can fetch a home loan borrower reasonable interest rates and other credit terms. 

  1. Can I get a home loan with a 650 credit score?

A 650-credit score is generally considered poor when it comes to home loans in India. Banks and lenders prefer borrowers who have a credit score of 750 or above. This reflects good credit behaviour on part of the borrower and therefore lowers the risk of default for the lenders.