Best Credit Score for Home Loans & How to Improve Yours

When planning or applying for a Home Loan, you must have come across the term CIBIL score or credit score repeatedly. It is one of the most important aspects of loan processing. To find out more about the importance of CIBIL score for Home Loan, the factors affecting your credit score and the ways to improve it– read on! 

What is a CIBIL Score?

CIBIL score is a three-digit credit score ranging from 300-900 that represents your creditworthiness i.e. the ability to repay the loan. The Credit Information Bureau India Limited (CIBIL) keeps a record of each individual based on their credit history. 

Why is CIBIL Score for Home Loan So Important?

In order to make your Home Loan approval smooth and avoid the chances of rejection, you must know the importance of the CIBIL score. It is one of the first things that lenders check when looking at your application. 

A good credit score, typically above 750, gives the lender a positive impression based on previous records or repayment history. It presents you as regular and worthy of paying off loans and dues on time. Therefore, the lender sees you as fit for the loan approval. Generally, lenders consider 650 as the minimum CIBIL score for Home Loans whereas having a score of 550 or less makes it challenging for the online application.  

Ideal CIBIL Score for Home Loan

Banks and financial institutions analyze the credit score before lending out money. The CIBIL score lies anywhere between 300 and 900. Generally, lenders consider 650 as the minimum CIBIL score for Home Loans whereas having a score of 550 or less makes it challenging for the online application. In case of poor score between 550 to 700, you can work upon to match the lender’s expectations. If you are wondering how to recover from bad credit score, you must keep the following CIBIL score hacks to get it fixed. 

• Paying off loans and EMIs on time without defaulting 
• Maintaining a healthy mix of credit 
• Keeping the debts low 
• Not requesting for multiple queries  

Additional Read: Know How Mortgage Loan Affect Your Cibil Score 

How to Improve Your Credit Score?

While 750+ is certainly a good CIBIL score for Home Loan, here are a few ways you can further improve it below: 

• Make sure you pay your bills on time for the maximum benefit. Missed or default payments attract negative points from the lender and thus leave an impact on the credit score. Remember that the Credit Bureau will keep a track of all these. Therefore, avoid skipping payments even when disputing a bill. In case of some difficulty, get in touch with the lender at the soonest. 
• Repay all your debts as early as you can. 
• Maintain a low balance, ideally below the limit, on your credit card. This is because having a balance lower than the credit limit will lead to no good. 
• Apply occasionally for credit instead of applying for multiple queries within a short time period that may impact your credit score. 
• Lastly, be sure to check your credit reports regularly. You must request your lender for a free copy of the credit report and check if the details are accurate. You may also be entitled to an annual copy of your credit report every year by the Bureau. Thus, you will be able to monitor your credit report and CIBIL score occasionally.  

Steps to Get Your Hand on the Best CIBIL Score Online

When in search of the best CIBIL score, the steps mentioned here must be followed –

• Search for the top lending institutions and lenders in the market and access the CIBIL score calculator on their website. 
• Access the CIBIL score calculator online and fill out some basic details, like PAN number, DOB, address etc. to avail of the credit report.
• Hit the ‘Submit’ button to get the accurate CIBIL score results. 

Having the desired CIBIL score for Home Loan not only makes the approvals easier but also comes with affordable interest rates and other perks. But in case you are still wondering what will help my credit score increase the most, the above methods can prove beneficial. Look for a lender that offers relaxed CIBIL criteria, prompt approvals and loan sanctions.