Steps to Increase Your CIBIL Score

One of the first things any lender evaluates while assessing your Home Loan application is your CIBIL score. To get a loan on your terms, such as getting your desired loan sanction, a reasonable interest rate and attractive refinancing options, your CIBIL score must be high enough to support your Home Loan demands.

Your CIBIL score is calculated and made known to you by the Credit Information Bureau (India) Limited (CIBIL) – one of India’s most bankable credit bureaus. The score is a 3-digit numeric indicator of your credit health, ranging from 300 to 900, calculated taking several aspects into account. Here are a few factors the bureau examines while calculating your score:

1. Repayment Pattern: Your repayment history and patterns are investigated while assessing your credit profile
2. Credit Mix: The bureau also considers your credit mix, i.e., what types of credit obligations you have and how prompt you are in their repayment
3. Credit Utilisation Ratio: If your credit report displays a tendency of seeking several loans repeatedly, the bureau may dock points from your CIBIL score

Seeing as your CIBIL score is a direct report of your financial standing and repayment capacity, lenders rely on it significantly to determine the loan terms they can offer you. Bajaj Housing Finance considers a score of 750+ as the ideal CIBIL for a Home Loan. However, a score of 725+ is the minimum CIBIL requirement for a Home Loan application. Refer to the table below to assess your current CIBIL score:

Also Read: Understanding CIBIL Score Ranges

The quickest way to improve your CIBIL score is to make timely payments without defaulting towards your existing obligations. It is also important to limit your credit utilization, i.e., utilise only a small portion of the total line of credit available to you. One should also be cautious to not make too many applications when applying.

After requesting your credit report, if you’re unhappy with your CIBIL score or it doesn’t meet the Home Loan eligibility benchmark, you still have the chance to improve it to get the Home Loan you desire. Here are some corrective measures you can adopt to improve your existing CIBIL score before you make your Home Loan application:

1. Meet your fixed financial obligations on time

2. Clear ongoing or delayed debt obligations

3. Limit your loan requests

4. Maintain a healthy credit mix

5. Build a good credit portfolio

6. Monitor your credit report

Employing these measures will help you enhance your credit score, giving you a stronger chance of securing a Home Loan that addresses your needs and expected home buying costs. You can also consider applying for a Home Loan with a co-applicant to boost your chances of loan approval.