Aditi Ahuja
While you work hard to fulfil your dreams, owning a house can take a while. That’s when a home loan makes this accessible for you. However, lenders have various parameters for loan approvals- your income, credit score, etc. But, if you have just started working, you may need to start working towards your credit score. There are various ways you can create and maintain a good credit score for a faster loan approval process.
Also Read: 5 easy tips to get your Home Loan approved instantly
What is the ideal CIBIL Score for a Home Loan?
A score of 700 and plus is considered as good by prospective lenders. However, the closer you stay to 900, the more faith lenders will have on your creditworthiness and the ability to pay back the home loan. With a good credit score, you can get a loan of up to 85% of the total cost of the property you want to own.
Importance of CIBIL Score for a Home Loan
Your CIBIL score is one of the most important criteria based on which the lender would decide to approve or disapprove your loan application. The first thing they check after you submit your application is your credit score and history. To make your application more acceptable, maintaining a good credit score is the way to go.
Not only does a good credit score improve your chances of an approved home loan application, it can also help you get a lower interest rate.
To know how your credit score determines the interest rate on your Home Loan, click here.
How to Improve Your Credit Score?
If your score isn’t up to the mark for a home loan, there are ways you can improve it. With a little financial discipline and focus, you can rebuild your credit record and buy the home of your dreams!
Here are a few tips to follow to improve your credit score.
Automate your credit payments
Be aware of your credit card usage. Keep your outstanding balance low for a good credit score
Monitor your bank accounts regularly
Assess your credit reports and history from time to time and rectify any errors present
Keep a healthy balance of unsecured and secured loans
Submit credit applications one at a time
How To Check your CIBIL Score Online
On the official CIBIL website, you will find an application asking for your personal details like:
Your name
Birth date
Contact numbers
Income
Identity proof
Details of ongoing loans
After the form is submitted, you will be redirected towards the payments page
Next, you will be asked a few questions about any outstanding credit for authentication purposes
Your credit score is then sent to you via email within 24 hours.
Knowing your CIBIL score before you apply for a loan reduces risk of rejection from the lender. It also gives you time to improve your score in case it is low.
Conclusion
Any delays in previous credit repayments can affect your new loan application. Maintaining a good payment track record will ensure you get a better credit score.
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