The Credit Information Bureau India Ltd (CIBIL), India’s primary credit rating agency, is authorised by the RBI to determine a borrower’s creditworthiness. The CIBIL score comprises a 3-digit number calculated based on your credit history, frequency of loan applications, number of existing loans and other factors. A credit score between 700 and 900 stands for good credit health and helps you get the best home loans.
A lender checks your credit score and certain other things before granting you a house loan. You can check the loan amount you’re eligible for using the online home loan eligibility calculator.
How Does Your Credit Score Determine Your Housing Loan Eligibility?
Here is how your CIBIL score is associated with your eligibility for a home loan:
300-599
If your credit score is below 600, the lender would assume that your creditworthiness is poor and therefore, may not grant you a house loan. Else you may get the loan at a high interest rate.
600-749
Your chances of getting a loan go up with a credit score in this range but are not as high as with a score above 750. So, the lender may consider some other factors like your monthly income and employment stability to determine your creditworthiness.
750-900
A CIBIL score in this range maximises your chances of qualifying for a loan since you appear to have a good repayment capacity. Therefore, you can get a loan quickly, borrow a large sum and even enjoy access to the lowest interest rates in the industry.
To check out the rates and calculate the EMIs accordingly, simply use the online home loan interest calculator on the official website of the lending bank.
Tips to Increase CIBIL Score to Boost Your Eligibility for a Home Loan
- Set a reminder for each of your payments of credit card bills and loans. Then make sure to pay them regularly on time. For an even better option, go for auto-debits so there’s no chance of missing any payments. Just request your bank to debit the outstanding amount from your account on a specific date every month. Make sure to keep a sufficient balance in that account.
- Try to clear all your dues. For instance, you can close any existing loan sooner with part or full prepayments. Then use the house loan EMI calculator to check the amount of the remaining EMIs or tenure. If the interest rate bothers you, you can opt for a balance transfer of the existing loan. Then choose a lending bank that offers lower interest rates.
- Make sure to go through your credit report from time to time. If you find any errors in the report, raise a CIBIL dispute against them and request the rectification of these errors. As a result, your CIBIL score may go up.
Boost your CIBIL score before applying for a home loan and use the housing loan interest calculator to check the lowest interest rate you can get. Always use the calculator to check and pay the accurate amount of EMIs regularly to keep your credit score intact.