CIBIL Score for Home Loan

There are few purchases in life as important to our future and lifestyles as the purchase of one’s own home. To achieve this milestone, most of us strive to cobble together finances for years. However, for the times that these finances fall short, there are some excellent home loans available in the market to help one fulfill the dream of buying a house. For instance, with the Bajaj Finserv home loan available on Finserv MARKETS, you can receive loan amounts of up to Rs. 3.5 crores and leave no stone unturned when house-hunting.


That being said, an essential aspect of applying for and availing a home loan is the capability of repayment by the borrower. This repayment capability is judged best by the indicator known as an individual's CIBIL score. A person’s CIBIL score is a reflection of their credit history and includes inputs from credit card payments to previous loan payments and credit requests.

When applying for a loan to finance the house of your dreams, it is paramount that your CIBIL score for housing loan meets the required standard. In order to better understand the parameters of the CIBIL score required for a home loan, let us take a closer look at the topic.

What is a CIBIL score required for Home Loan?

A CIBIL score is essentially a numeric representation of your credit history and ranges from 300 to 900. The better your credit history has fared, the higher your CIBIL score would be. In particular, when it comes to availing loans for something as significant as a house, CIBIL scores play an integral part. Home loans typically deal with substantial loan amounts and therefore, efficient repayment is always priority for the lender.

A good CIBIL score for home loans would start from 700 upwards and would almost guarantee that your home loan application gets accepted. A CIBIL score for housing loan within the range of 700 to 760 is an indicator that you have a good credit history and can be depended upon as a borrower.

Ideally, however, for a CIBIL score required for home loan, it is recommended that it be higher than 760. This is because such a CIBIL score denotes that you have handled your debt efficiently in the past and will not let any current credit payments interfere with the home loan payments. This helps inspire trust in the lender and they can thereby offer you a home loan at exclusive, nominal interest rates.

 

What are the uses of CIBIL Score for home loans?

Home loans are typically provided by banks or financial institutions, and as lenders they must ensure that all relevant risks are minimised. This is where the CIBIL score comes in.
Every month, TransUnion CIBIL Limited, a credit information company, generates reports about the credit history of every individual and commercial organization. The CIBIL score is an integral part of this report.

All banks and financial institutions are members of CIBIL by default, and provide as well as receive information from them. When one applies for a home loan, the lending financial institution refers to one’s CIBIL reports and particularly, CIBIL scores. By doing this, they form a better judgment of one’s history as a lender and then decide whether the home loan application gets accepted or rejected.

How to improve your CIBIL score for home loan?

While 700 and above can be considered scores good enough for loan acceptance, there is also an unacceptable range of CIBIL scores for home loans. A score between 350 to 650 might not be ideal, but in certain cases, might be adequate. However, a CIBIL score below 350 can be a major cause of concern, not only for home loan acceptance but also as an overall representation of your repayment ability.

However, CIBIL scores on the lower end are not set in stone. One can take active steps to avoid these numbers or even raise them over time to help you meet the required CIBIL score for your home loan application.

  • Make sure to check CIBIL score before applying for a home loan or a loan of any kind. By ensuring that your CIBIL score for housing loan is not below the expected standard, you lower your chances of getting your loan application rejected. This is important since loan rejection can lower one’s CIBIL scores drastically.

  • In case you are rejected by a lender, work on improving your CIBIL score for home loan before applying for a loan again by another lender. Too many loan requests and rejections can affect your credit history and credit score negatively.

  • If you have any unsecured loans such as a personal loan or credit cards, make sure managing them becomes a priority. If possible, try to close them with a high credit limit. This is because lenders can view your overall outstanding debt balance and judge it on the basis of your Debt to Income (DTI) ratio. Higher debt leads to higher DTI ratio and therefore, reflects poorly on your repayment ability.

In conclusion, maintaining an acceptable CIBIL score and reflecting a dependable credit history is essential for your efforts to secure a home loan. But while it is important to ensure your credit score is adequate, it is also essential to find the right lender for your home loan needs. To that end, look no further than the home loan available on Finserv MARKETS, India’s leading online financial marketplace.

With the convenience of minimal documentation and instant loan application processing, availing home loans on Finserv MARKETS are increasingly becoming popular among Indians. Moreover, the home loan at Finserv MARKETS can provide you with access to loan amounts of up to Rs. 3.5 crores with flexible repayment tenures of up to 300 months.

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