Applied for a Home Loan and worried about the status of your application? Well, if your CIBIL score is in good shape, there is no reason for you to worry, but if your score is not very impressive- then you might have reasons to worry. Lending institutions always check the credit score of the applicant before granting Home Loans. A high income and a sound employment history do not necessarily guarantee that a Home Loan application will be approved and the requested amount will be granted; the CIBIL score is the underlying factor which can affect the status of a Home Loan application.
CIBIL Score is a statistical figure that is provided by a body established by the government of India in 2000 that keeps track of an individual’s credit history and spending habits. This is the Credit Information Bureau (India) Limited. The importance of CIBIL Score while availing Home Loan is much prior because it represents the financial trustworthiness and credit repayment capability of an individual.
A credit score of 750 or above out of 900 is considered a good score by lending institutions. In addition to being eligible for a Home Loan, a good credit score is also necessary to avail the loan with a low credit score.
Payments made against an existing loan or credit card bill are recorded in the credit report of an individual and contribute towards the credit score- over time, regular payments will help in building a high credit score.
Given below are a few ways to increase the credit score and eligibility for a Home Loan with a low rate of interest:
These are simple and easy to implement ways that have been tested time and again by Home Loan seekers. If you are planning on settling down in a particular city, start early and follow these steps to find the best housing finance scheme.
Aman Khanna is an experienced financial advisor who is well known for his ability to foretell the market trends as well as for his financial astuteness. He has an MBA in finance from Toronto University as well as years of experience delivering seminars on sound financial practices and debt management.