A credit score is one of the most crucial factors lenders take into account while disbursing a home loan. Through the credit score of the borrowers, lenders assess the credit risks of them, ensuring their creditworthiness. Therefore, individuals must be aware of the ideal CIBIL score for home loans, to proceed accordingly with their finances.
What is the ideal CIBIL score to get a home loan?
Individuals should be aware of the CIBIL score ranges to ensure they proceed accordingly. It will reduce the obligations to get their home loan approved by the lenders. Hence the following are the CIBIL score ranges, given as what is considered good to poor credit health.
CIBIL score range:
- 300 to 499: Poor
- 500 to 649: Fair
- 650 to 749: Good
- 750 to 900: Excellent
Even though the usual range of CIBIL scores lies between 300 and 900, most lenders consider 650 and above to be the minimum required CIBIL score for a home loan. Therefore, the ideal CIBIL score for home loan would be more than 700. This is because lending institutions will be drawn to applicants with higher CIBIL scores than minimum ones.
Since, credit scores reflect the loan repayment ability of the borrowers, a higher CIBIL score reduces the risks of rejection of the home loan applications.
How to improve CIBIL score for a home loan?
Borrowers can follow the given points to ensure improving their CIBIL scores for a home loan:
- Timely Repayment
Paying all the existing debts and EMIs on time is a crucial factor that reflects the CIBIL score of the borrowers. The number of days one delay in clearing out their debts reduces their credit score. Therefore, making timely repayments or making prepayments always helps in increasing the same.
- Opting for a credit mix
Opting for a mix of credits such as secured loans like home loans and unsecured loans like personal loans or loans of short and long tenor, always facilitates credit score. This reflects that the borrower is able to repay various kinds of loans on time, and hence increases their credit score.
- Report discrepancies
A credit report should be accurate, without any incorrect information to get a higher credit score. Hence, individuals must make sure to report and resolve any discrepancies as soon as possible. So individuals should opt for a housing loan after carefully tracking the credit reports.
- Limit credit utilisation
Borrowers must lower their utilisation of credit for long periods to reflect their capability of handling extra credits. If spending remains constant even after increasing the credit card limit, it improves their credit utilisation ratio, and consequently their credit score.
How to check CIBIL Score Online?
Borrowers can have access to their credit reports online and can check their credit score by proceeding with the following simple steps:
Step 1: Visit the official website of CIBIL.
Step 2: Click the “Get your CIBIL score” option.
Step 3: Type in the required details such as name, email ID, Aadhaar number, password etc.
Step 4: Select “Accept and continue”.
Step 5: Individuals will receive an OTP. Type in the OTP and click “Continue”.
Step 6: Click on the “Go to the dashboard” option.
Step 7: Once individuals are redirected to the website they can click the “Member Login” option to check CIBIL score online.
Several lending institutions provide pre-approved loan offers to their existing customers. Borrowers can get these offers based on their credibility, for loans like loans against property, home loans etc. Individuals can check those pre-approved offers on their lender’s website by entering their names and other essential details.
Therefore, borrowers must aim for the ideal CIBIL score for home loans and not just the minimum required one. Taking appropriate measures to manage finances can eventually let the borrowers get a home loan approved.
