CIBIL Score For The Home  Loan

CIBIL Score For The Home Loan

Credit Information Bureau India Limited is the credit rating agency of India to assess the creditworthiness of an individual. Creditworthiness is assessed based on credit history. 


They observe the repayment habit of dues on the credit card, loans, ongoing loans, etc. CIBIL has been authorized by the Reserve bank of India & governed by the Credit Information Company Act 2005.


CIBIL Scores are measured on a scale of between 300 to 900. CIBIL Score of 750 and higher is perfect for availing home loan.


Whenever you apply for a home loan, banks check your CIBIL Score to assess your creditworthiness. Your CIBIL report provides all the necessary information for financial institutions. 


Advantages of CIBIL Score for a home loan


Defines an Individual’s creditworthiness


Your CIBIL Score exhibits your loan repayment capacity. A high CIBIL Score reflects good repayment capability. It provides your lender an assurance that you can easily repay your loan within the stipulated time. While the low CIBIL Score reduces your chances of being eligible for a loan because it makes your lender skeptical about your repayment capacity.


Tool to calculate the interest rate


With a good CIBIL Score (750 or higher), you can negotiate with your financing institution for interest rate and hope to get the loan at the best rate of interest. The higher the CIBIL Score, the greater will be the chances of availing good amount of loan at a low-interest rate.


Determine the home loan amount


An excellent CIBIL score makes you eligible for a high amount of loan, while in the case of a low CIBIL Score the lenders would offer a lower loan amount. 


Affect on loan approval


With a good CIBIL Score (750 or higher), it will be easy for you to get the hassle-free approval of your loan quickly and that too from a wider range of lenders. It increases your capacity to negotiate for the loan amount and better interest rate.


Easy processing and disbursal of loan


The lender expedites the loan process for the borrowers having a good CIBIL Score because they believe, the loan will be repaid within the stipulated time. The loan amount is also disbursed within a very short time.


How to Improve your CIBIL Score


  • Eliminate credit cards with low balance
  • Clear Credit card dues/bills on time
  • Opt for Auto debit if you have a busy schedule
  • Pay EMI of ongoing loans on time
  • Avoid being a loan guarantor
  • Avoid multiple loan inquiries at a time
  • Stop applying for loans repeatedly
  • Check your CIBIL Score if you are applying for a loan & in case of any error in your CIBIL report, fix it 
  • Escape from excessive borrowing
  • Limit your unsecured loan
  • Don’t use your complete credit limit 

Click to know more: SBI Home Loan for Women


Q. What is an ideal CIBIL Score for a home loan?
Ans. CIBIL Score of 750 and higher is an ideal score for availing home loan.
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