CIBIL Score: How it Affects Your Home Loan - Loan Trivia


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Monday 16 July 2018

CIBIL Score: How it Affects Your Home Loan

A Home Loan falls under the secured loan category, wherein the loan eligibility is determined using the current market value of the property being purchased, and the applicant’s monthly income. Thus, some people argue (when their Home Loan application gets rejected due to low CIBIL score) why do they have to share their CIBIL scores when a Home Loan has nothing to do with it? The answer is, though the applicant’s score doesn’t play an active role in a Home Loan, yet it is used to calculate the applicable interest rate and the gauge the borrower’s ability to repay based on their past performance. This is why your CIBIL plays a key role in your Home Loan approval. Accordingly, if you want to obtain the lowest Home Loan Interest Rate, improve your credit score.

How to improve your CIBIL score to get best Home Loan offers with the lowest interest rates?

> First of all, start by paying off all your existing loans in a timely manner. Never miss an EMI. If you do, inform your lender immediately and don’t commit the same mistake again.

> Check your credit card outstanding balance and clear it immediately. Do the same every month and pay your credit card bills on time. Also, don’t use more than 40% of your credit limit. Keep it as low as you can.

> Check your CIBIL score at least once a year to ensure everything is OK. If something doesn’t look good in your credit report, find out a way to rectify the error.

Now that you know how CIBIL Score plays a vital role in offering you the best Home Loan rates, you must maintain a high Credit Score. Read here to know more: Role of CIBIL Score in Home Loan Interest Rates

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