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CIBIL™ is one of the four authorized credit bureaus in India which provide a credit score, the others being Equifax, Experian and CRIF High Mark.

A CIBIL™ score ranges from 300-900. An ideal CIBIL™ Score for a home loan must be 700 and above. The closer you are towards 900 the better chance you have of being approved for a loan.

Moreover, a higher credit score means that you can avail of more attractive offers including lower interest rates, larger loan amounts, simpler documentation, and longer repayment periods. You can get up to 80% of the total cost of the property as a home loan.

Let us understand how to obtain an ideal credit score for a home loan and the impact of the same.

Why is a CIBIL™ score important when applying for a home loan?

If you want to apply for a loan and avoid the prospect of rejection, then you need to know the importance of a CIBIL™ score in the loan-approval process.

The first thing a lender checks when you are applying for a loan is your credit score. If you have a low credit score there is a good chance the lender will reject your loan application. However, if you have a good credit score (above 750), then the lender looks into the application further to check the creditworthiness of the borrower before making a final lending decision. Your credit score gives lenders a quick impression of your probability of default based on your past repayment behaviour.

How to improve a low CIBIL™ score?

Here are some important tips which can help you in improving a low CIBIL™ score:

  • Never make any late or missed payments.
  • Always settle your credit card bills in full and on time.
  • Keep a balance between secured and unsecured loans.
  • Keep an eye on your credit report and check your credit score regularly.
  • Do not apply for too many loans at the same time.
  • Do not use more than 50% of your credit limit.

How do lenders make use of my credit score?

Earlier, lenders needed to make a partly-subjective internal assessment and do background checks to sanction a loan. But now with the help of a credit score and a credit report, it has become very easy for the lender to access accurate, data-based credit information on the applicant.

CIBIL™ has a database of the credit-related activity of customers. This is used to calculate their credit score.

If you have a low score, (less than 700) lenders might see you as a high-risk customer with a history of defaulting on payments and might be unwilling to approve your loan application.

If you have a high score, lenders see you as a low-risk customer with a low probability of default and will be willing to lend to you with attractive terms.

While there is no fixed minimum CIBIL™ score to apply for a card, it is recommended that you ensure that you have a score of at least 700 before you apply for a home loan.

Conclusion

A good credit score is very important for a home loan, especially if you want to get it at lower interest rates. Banks may either reject an application or lend home loans at higher interest rates to those who have a poor credit score. Hence, always ensure to have a good credit score to avail home loans easily and make your dream home a reality.

good CIBIL™ Score for Home Loan FAQs

1. What is a good CIBIL™ score for a home loan?

A good CIBIL™ score for a home loan should be above 700. A lower score will either result in an application rejection or the applicant may have to pay a higher interest rate.

2. Can I get a home loan with a 690 credit score?

Although it is possible to get a home loan with a credit score of 690, you must try and achieve a score of 700 or above. This is because you may end up paying a substantial interest rate if you have a low score.

3. What is the minimum CIBIL™ score for a home loan in SBI?

The minimum CIBIL™ score for an SBI home loan is 700.

4. How much credit score is good for a home loan?

A home loan application needs a credit score of 700 and above. In absence of a high credit score, the application may either be rejected or the applicant may have to pay higher interest rates.

5. How to check credit score for a home loan?

You can easily check your credit score requirement for a home loan on the bank website where you wish to make an application. To check your credit score, you must visit the credit agency website or you can check it for free on Credit Mantri.

6. Can I get a home loan with a 600 credit score?

It is difficult to get a home loan with a credit score of 600. This is considered to be a poor score and most banks may reject an application with a low score. Alternatively, the borrower may have to pay very high-interest rates.

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Cibil Score For Home Loan - Customer Reviews

4 / 5 (2 Reviews)
8 Jul 2020

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