Table of Content
If you do not have any past credit-related experience, it will affect the lender’s decision to give you a loan. They may be unconvinced about your repayment capacity, resulting in the rejection of the loan application or loans extended at a high-interest rate. You might find this a daunting process if you're new to credit and borrowing.
It is absolutely okay to pay for everything using a credit card as long as you can clear all your dues at the end of the month. If you are only clearing the minimum due amount month after month, you are in trouble. Clearing just the minimum due amount not only leads to increased accumulated interest but also lowers your credit utilization ratio. These days, almost everyone pays for everything using their credit cards. Further, banks are always running offers on credit cards that help you save money and win reward points. These are some of the benefits you will experience if your credit report is good.
What is the minimum CIBIL score for home loan?
Business loans for individuals with low CIBIL scores are also available. However, there are certain ways by which you may improve your credit score. You must practise these actions regularly and keep track of your loan EMIs and monthly credit card payments. CIBIL collects and organises all information about a user’s credit history and makes it available to banks and financial institutions. The data is gathered through banks and financial institutions.
A score ranging between 650 and 749 is considered good, and lenders may offer you a home loan after inquiring into your other financial details. However, lenders usually consider 650 as the minimum CIBIL score required for a home loan. Scores ranging between 550 and 649 are average and need working on. Bad scores are the ones that fall in the 300 to 549 bracket. Finally, NH or NA implies that you do not yet have any credit history. In India, the CIBIL score carries immense weightage as most of the financial institutions here have ties with the bureau.
How can I raise my credit score?
An individual's CIBIL score indicates their attitude towards credit and their repayment capacity in general. The higher an individual's credit rating, the higher their chances of receiving a loan and that too on good terms and conditions. A good credit score increases the chances faster home loan approval process. However, a good credit score is not the only factor behind the loan approval process. It also depends upon the lender’s terms and conditions and the eligibility criteria. Borrowers who meet the requirements are eligible for a lower rate of interest on the loan amount they obtain, as well as other benefits.
The best solution in such a case is to have a backup option when you reach out to a lender for the loan requirement. It might be possible that they don’t have the required loan ask, and based on the same, they can’t process the loan amount. Having a CIBIL score of 700 or above means you have excellent chances of approval. Additionally, there is a high chance that your loan will be approved. However, on the contrary, a low CIBIL score could significantly downgrade your chances of getting a home loan. If you are planning to take a home loan, you should follow the following simple tips that will help you get a better deal in terms of interest rates.
What is the Minimum Cibil Score Required To Get A Loan?
However, when you approach the lower end of that range, your ability to negotiate for a better offer, in terms of interest rate or loan tenure, diminishes. While scores above 700 should be sufficient to acquire a business loan with slight challenges, a CIBIL score of 750 or higher can get you a business loan without challenges. If your CIBIL score is low and you wish to get approved for a Home Loan, you must convince your lender that you are entirely capable of repaying the loan. If your CIBIL score is low, add all extra income sources, such as rental income, interest payments, money earned from a part-time job, etc. to your loan application.
CIBIL then processes the information on a monthly basis and generates a detailed credit information report of the user’s credit history. Like other lenders, Bajaj Finserv also checks your CIBIL score before giving the green signal on a home loan or a home loan balance transfer application. The Bajaj Finserv Home Loan offers you high-value financing, up to Rs. 5 crore, at one of the lowest interest rates in the country. You can repay your loan via a tenor of up to 30 years and make prepayments and foreclose your loan at no additional charge.
Great Ways to Improve Your CIBIL Score
This score is crucial as it helps banks decide the approval of your home loan application. A credit report comprises your CIBIL score that helps banks and financial institutions understand your creditworthiness. This is based on your repayment habits over a period of time. The bureaus typically collect data that includes individual consumers and lending institutions to provide information about your credit history and creditworthiness.
It is important to maintain a high credit score if you are planning to apply for a home loan. One of the first things the banks will check after receiving your home loan application is your credit score. It gives lenders a peek at your ability to pay back the debt. If you have a high credit score, you can be eligible to get preferential pricing for interest rates.
TransUnion CIBIL is one of the leading credit information companies in India. The company maintains one of the largest collections of consumer credit information in the world. Banks and other lenders check the CIBIL Score of the applicants before approving their loan or credit card application. Consumers can visit the official website of CIBIL to check their CIBIL Score and Report.
Some lenders sanction home loans if your credit score is around 550 or more. However, do keep in mind that your credit score is not the only criteria in the process of qualifying for a loan and getting approval on your application. Other factors such as your salary, city of residence, existing debt, employer, etc., also play a part. Increasing your home loan eligibility means improving your credit score. If your score is good then the chances of approval become higher & even the process becomes smooth. Having a low credit score impacts your ability to get a loan when required and also restricts you from the availing benefits that are offered by the lenders.
Credit card repayments play a major role in either hampering the credit score or improving it. On-time payments majorly increase the chances of availing of unsecured and secured loans. Individuals with a higher CIBIL score are considered to be financially disciplined, creditworthy, and the risk of default is lower.
Your credit score reflects your credibility since it considers things like timely repayment of EMIs, your credit utilisation, your credit inquiries, and your existing debt. A good credit score shows your lender that you are financially stable and responsible with credit. Know your credit score before applying for a home loan so as to ensure that your credit history and personal details are in order to avoid rejection from bank. You can purchase your credit report yourself, online at the CIBIL site, by paying a nominal amount of Rs.470. When you apply for a loan or a new credit card, the first thing that a lender/credit card company does is approach a credit bureau for your credit report. Too many Home Loan and credit card applications lead to too many hard queries and therefore, a negative credit score.
Learn how to initiate a dispute online to resolve inaccuracies, account ownership and duplication of information that reflect in your CIBIL Report. A comprehensive guide to CIBIL's functions, products and services. Find out how your credit actions can impact your CIBIL Score. The CIBIL score is a three-digit number ranging between 300 and 900.
Not only this but also you could get a slightly larger loan amount if you required. By giving a nominal fee, you can easily get your credit report and CIBIL score. You should always know your CIBIL score or credit score before applying for a home loan. A credit report can be prepared by using the following information. Different loans have a different CIBIL score requirement based on the nature and type of the loan.
No comments:
Post a Comment