A CIBIL (Credit Information Bureau India Limited) credit score is a number that shows the history of your loan repayment. The value of the credit score normally ranges between 300 to 900, and it is prepared based on your credit history. This includes all secured and unsecured loans and any other debts that you may have or had taken.
If you are trying to get a home loan, you will need to have a good CIBIL score. If your credit score is more than 700 than it is considered good. If your credit score is 900, then your housing loan eligibility increases.
Along with the credit score, if you have all other required documents in place, it is possible to avail a home loan with attractive interest rates.
How does CIBIL score affect your home loan process?
A good CIBIL score is considered one of the deciding factors in getting a home loan. It plays a major role in the processing of home loan applications. In fact, the first thing that banks check while processing your loan application is your CIBIL score.
If your credit score is low, chances are your application won’t get processed. This is the basic check that all banks perform. Having a good credit score will help in speeding up the home loan process.
How is my CIBIL score used?
Before processing your home loan application, the bank will get your credit score and repayment history from CIBIL.
CIBIL collects all your data and provides it to all the banks and financial institutions when demanded. CIBIL collects all the information with the help of banks and financial institutions which are members of CIBIL.
Information to CIBIL is provided on a monthly basis based on which credit information report (CIR) is prepared, and based on the report you get the credit score. Thus credit score helps banks to disburse loans more efficiently
How to improve your credit score?
If you’re CIBIL score is not enough for getting a housing loan, then you must bring some financial discipline, in order to rebuild your credit score.
Below is a list of tips that you can follow to improve your CIBIL score:
- Make your payments like loan EMIs on time
- Keep a track on your credit utilization and keep your outstanding balances low to get a good credit score.
- Check your accounts at regular intervals so that no payment is missed at the end of the month.
- Check your credit score at regular intervals and go through your credit information reports from time to time and rectifying errors, if any.