Heard too many people advocating for a good CIBIL score, but still not sure how it affects you?
Let’s step in – your CIBIL score is a mark of your creditworthiness and decides if you are a good mortgage seeker. If you are looking for a home loan, your CIBIL score is of the utmost importance as this will be one of the main things your lender will assess before sanctioning the loan amount.
What is the CIBIL score and what is the amount needed for a mortgage?
Your CIBIL score is assigned to you by Credit Information Bureau India Limited, based on your financial habits. The CIBIL score is a three-digit number between 300 and 900. The closer the score is to 900, the better. Your CIBIL score depends on your ability to meet your financial obligations – paying your bills on time, settling past debts and your financial situation.
Most lenders expect a score of 750 and above when reviewing loan applications. Think of it as your gateway to great home loan deals, reasonable interest rates, and great loan terms.
Does the CIBIL score affect eligibility for a mortgage?
Simply put, yes, your CIBIL score is critical in determining your eligibility for a home loan. Among other things, your lender mainly depends on your CIBIL score to assess your solvency and your repayment capacity. The improve your CIBIL score That is, your lender will be less reluctant to give you large loan amounts at low interest rates because they will be assured of your repayment commitment.
If you have a CIBIL score of 750 and above, if you meet the mortgage eligibility criteria will be a breeze, but if it’s less than that, the chances of getting the mortgage you want can be considerably lower.
However, having a low CIBIL score does not mean the end of your borrowing journey. With the proper efforts, you can work towards improving your CIBIL score, which in turn will allow you to benefit from better mortgage deals. Here are some things you can do to help your cause.
Pay your contributions on time
One sure way to make sure your CIBIL score doesn’t drop is to meet your repayment commitments and pay your dues on time. It could mean EMI loans, or even credit card payments. By making timely payments, you become a financially responsible person whose discipline makes them a low risk borrower.
It is also suggested that you keep track of your old account transactions, so that potential lenders can track your timely repayments and use the information to grant you the loan you desire.
Maintain a balanced credit allocation
Your credit report should ideally show a mix of credit, including secured and unsecured loans to balance it out. If one has too many unsecured loans and bounces, it could have a bad impact on his credit rating.
Keep a regular eye on your credit report
Whether you’ve spotted a mistake or not, it’s essential to check your credit report from time to time. This will help detect errors and inconsistencies. Credit bureaus are legally required to offer borrowers a free credit report every year and by using this facility you can be proactive in having your CIBIL score corrected if the need arises.
Use of balance credit
Your lender would like to see how well you are managing your credit extensions, and your CIBIL score is the perfect way to do that. You have to strive to find the right balance in using credit and manage your credit card bill well – paying it off on time. This proves to lenders that you are responsible for your credit usage and that you can successfully manage repayments on time.
Note that owning too many credit cards can also jeopardize your mortgage application, as it increases your credit debt – significantly increasing your repayment obligations.
The last word
We hope you can now take these steps and focus on improving your credit score before you apply. Bajaj housing finance mortgage loan. It will also be interesting for you to note that despite a low CIBIL score, applying for a home loan is not impossible. With Bajaj Housing Finance Limited, you can apply for a co-applicant and increase the eligibility of their loan application, and gain the chance to get a loan with an interest rate as low as 6.70% * pa if you are an employee. or professional applicant.
This content is distributed by Bajaj Housing Finance. No journalist is involved in the creation of this content.