Avail Home Loan At A Lower Interest Rate By Maintaining Your Credit Score

A home loan applicant should not apply for multiple sanctions simultaneously with various lenders because it adversely affects their credit score.

Avail home loan at low-interest rate | Representative Image

To secure approval on home loan applications, borrowers need to meet certain requirements. Besides the documents that need to be submitted, lenders expect borrowers to fulfil other loan requirements. How well you meet these criteria decides the interest rate applicable for you.

If your profile scores high or exceedingly high on some parameters, especially the credit score, you stand to be offered a low-interest home loan. Lenders will review the CIBIL score of an applicant to gauge if they meet the criteria for a loan.

While an applicant with a CIBIL score that falls anywhere between 300 and 900 can seek a home loan, a score of 750 and above is usually deemed satisfactory. A lower score can translate to steeper borrowing terms and reduced chances of approval.

What is a CIBIL Score?

TransUnion CIBIL Limited (formerly Credit Information Bureau (India) Limited) is a credit information body that issues the CIBIL score, or what's commonly accepted as one’s credit score. The bureau is similar to other bodies like Experian, Equifax, and CRIF High Mark, which also dispense credit scores to borrowers. The CIBIL score is a three-digit figure that ranges anywhere from 300 to 900. It offers the lender everything they need to consider a home loan request. Having a CIBIL score in the bracket of 750 and upwards reflects a good repayment history, giving the lender confidence to approve the applicant’s home loan request.

A quick tip: A home loan applicant should not apply for multiple sanctions simultaneously with various lenders because it adversely affects their credit score.

The CIBIL for a home loan is a significant determinant of the applicant’s home loan request. To boost the chances of approval, one must maintain a high credit score. It not just guarantees eligibility for a home loan but also makes it easier for applicants to receive a low-interest home loan. Several factors determine an applicant’s credit score, including previous loan payments, credit history, existing and former credit accounts, etc.

Before applying for a home loan, it’s best you ensure that you have a shot at getting a low interest home loan. The credit score is vital and that's why all lenders favour the loan requests of those with a high CIBIL score. A low credit score implies that the applicant is more likely not to repay the loan within the agreed-upon tenor.

How to Check Your Credit Score in 9 Easy Steps

Applicants who have their CIBIL scores handy can evaluate their creditworthiness and know what to expect out of their home loan applications.

The process of getting your CIBIL score online is easy and can be explained in nine easy steps.

• Visit the official CIBIL website.
• Click on ‘Get Your CIBIL Score.’
• Select ‘Click Here’ to receive your free Annual CIBIL score.
• Fill in your details, such as name, email address, and password. Make sure to attach proof of identity, such as passport number, PAN, and Voter ID. Also, provide your PIN code, date of birth, and phone number wherever asked.
• Click on ‘Accept and Continue.’
• An OTP (One Time Password) is sent to the registered phone number. Supply the OTP and click on ‘Continue.’
• Click on ‘Go to Dashboard.’
• The previous action takes you to the CIBIL score website.
• Select ‘Member Login,’ and upon logging in successfully, you can view your CIBIL score.

To avail of a low-interest home loan, one must have a high CIBIL score. A low CIBIL score indicates poor repayment ability and could weigh against you in your application for a home loan. Since a high credit score translates into a possible home loan approval, it is important to know how to enhance your CIBIL score.

How to Enhance One's CIBIL Score for a Home Loan

It is advised that applicants check their CIBIL reports frequently. The report not only contains the credit score but also details all active and previous credit accounts. When applicants know how to check CIBIL score regularly, they can track their credit score movement and work to remedy a low score. Read on to find out how to boost one’s low CIBIL score.

1. Pay bills on time

Early payment of one's credit card bills and Equated Monthly Instalments (EMIs) helps enhance the CIBIL score. Avoiding delays in payments goes a long way.

2. Stay within an acceptable credit range

Some experts recommend that one should only use 15% to 30% of their credit card limit. When an individual exceeds the limit, it implies higher credit consumption with reference to repayment capacity.

3. Make sure that the CIBIL report is error-free

Verify your low CIBIL score with the bureau and ensure that your credit report is error-free. Do this beforehand, so you have your rectified score in hand, in time for your home loan application.

4. Get your credit limit increased

Another method of enhancing the CIBIL score is to increase the credit limit on your credit card. To do this, contact the lender, and upon approval of the request, ensure that you minimize the credit utilization. This implies that the borrower is reliable, and future home loan applications will be strongly considered.

If applying for a home loan is on the horizon, consider opting for Bajaj Housing Finance for a quick and hassle-free home loan experience, with competitive interest rates and benefits.

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