What is a good CIBIL score to Apply for a Home Loan?

Your CIBIL score (credit score) plays a key role in determining your eligibility to get a home loan. Based on this score, your lender will determine whether your home loan application is approved or rejected.

When you submit your application for a home loan, online or in person, the first thing your lender will check is your CIBIL score. If the CIBIL score is low along with a bad credit history, your home loan is likely to get rejected. But with a good enough CIBIL score, it will be approved at varying interest rates as per the score. And your application will be processed quickly with a high loan amount and low interest rates if your credit score is outstanding.

credit score

 

So, what is a poor, good or great CIBIL score? Although there is no standard score to define good or bad, every lender has a minimum number that determines approval or disapproval of applications. Usually, all banks and lending institutions consider 750 and above very good and below 350 very bad. This three digit summary of your finances is analyzed as per your credit history, debts and their repayments, credit cards overdues, and secured and/or unsecured loans, among others. Credit score valuation for home loans usually ranges from 300 to 900.

For home loan eligibility, you must have a CIBIL score of more than 700. Nonetheless, the higher your score is, the more faith your bank will have in you. This gives them surety of on-time repayments, which further enables you to get good interest rates. With a good credit score (closer to 900) and a good credit history, your lender may approve a home loan up to 85% of the property’s total cost.

It’s fairly easy to obtain your credit report from the CIBIL website at a minimal fee. This comes handy in figuring out where you stand when applying for a home loan. And in case, it’s not as great, you can always improve it. Your credit report at CIBIL provides information like:

Records of availed credit, loan repayments and credit card bills,

  • Defaults of late payments made by you,
  • Current credit card debts and loans, and
  • Information about loans and credit cards for which you have applied in the past.

With this list of your credit information, you can find out your home loan eligibility before applying and close previous debts to avail a better score for future.

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