Design Credits: Rakesh Mohan
Thinking of getting a Home Loan? That’s great, but have you given a thought to your CIBIL Score? We’ll helo you find out what the ideal CIBIL Score for your Home Loan is!
What is a Credit Score?
A Credit Score, also commonly referred to as a CIBIL Score, is a numerical evaluation of your credit history.
Range of a Credit Score
A Credit Score usually varies between 300 and 900. When your Credit Score is calculated, it takes into account all the secured or unsecured loans that you have, or have had in the past. That’s why it’s called your credit history.
What is a Good CIBIL Score for a Home Loan?
If you have a CIBIL Score that’s anywhere above 700, you’re in safe territory.
700 is good, but can it get better?
Now that you ask, get a Credit Score closer to 900 and your bank or lending institution will have more faith in your repayment capability.
I have a good Credit Score
That’s good news! A good Credit Score can get you as much as 85% financing on the total cost of the property.
Why your CIBIL Score matters
Your CIBIL Score is an important factor in your Home Loan application. If your Credit Score is low, your application is likely to be rejected. A good Credit Score means that your Home Loan application could be fast tracked. Every bank has a minimum CIBIL Score. This is used as an indicator for acceptance or rejection of your application.
- A score above 750 is termed as a good Credit Score.
- A score of 350-750 is average, or possibly unacceptable
- Any score below 350 is poor
How you can improve your CIBIL Score for a Home Loan
Here’s your guide to improving your Credit Score for a Home Loan.
A little financial discipline goes a long way.
Pay all your bills on time. Remember to pay the full amount. A part payment will be reported as overdue and no bank appreciates late payments.
Do not exhaust your credit limit
Keep those outstanding balances as low as you can. This will help your Credit Score.
Review your Credit Score periodically
Keep an eye on you Credit Score. Check it regularly, to avoid any unexpected surprises when you apply for any financial products.
Additional Reading: How to check your CIBIL Score
Ready for that Home Loan?