Loan Eligibility Impacted By CIBIL Score

Owning a home is everybody’s dream. Nobody willingly wishes to live on rent or heavy deposits. Everybody wants to get rid of rents and lump sum payments in heavy deposits. These are the main reasons why people opt for Home Loans. When you like a property, most of the time it’s beyond your budget you seek banks help for the Home Loan facility.

Before applying for a Home Loan there are several things one has to consider: Home Loan eligibility and CIBIL score being the top priority. Both of these go hand in hand. A good credit score or CIBIL score will enhance your chances of availing loan facilities while the other will hamper it. Loan applications can get rejected for a variety of reasons but a poor CIBIL score is the major one. So, check your Home Loan eligibility as well as the CIBIL score before applying for a loan to avoid any kind of rejection.

A credit score or CIBIL scores pretty much decides the fate of your loan, from loan approval to the loan amount to the rate of interest levied on it. Thus, with a poor credit score, one cannot fulfill the Home Loan eligibility. Let us understand how Home Loan eligibility is impacted by the CIBIL score.

Positive impact on CIBIL:

  • Paying loans on a timely basis
  • Paying credit card bills on time
  • Avoiding over-leveraging completely
  • Paying full credit card bills rather than minimum
  • Having a decent financial record
  • Proper and efficient use of the credit cards

Negative impact on CIBIL:

  • Unnecessary credit inquiries from the bank
  • Bouncing cheques
  • Irregularity in loan repayment
  • Credit repayments defaulting
  • Making late credit card payments
  • Having multiple personal loans
  • Trying to avail numerous unsecured loans after rejection by the bank

How does this impact your Home Loan eligibility?

The aforementioned points affect your standing with banking. It not only ruins your image with the bank but also the financial trust it has in you. A low credit score hampers your chances of securing a housing loan in a major way. It can make or break your dream of owning a house. Thus, one’s Home Loan eligibility is seriously affected by the CIBIL score.

CIBIL score is a three-digit number which usually ranges between the numbers 300 to 900. The creditworthiness of a borrower is reflected through his/her CIBIL score. It takes into account the summary of one’s payment history, balances that are outstanding, a number of loans that have been borrowed, a credit limit provided, and the usage of the same. Most of these factors are taken into account when we talk about Home Loan criteria & Home Loan eligibility. And a CIBIL score covers all of this.

What CIBIL score is right for you?

The functioning is simple. A decent CIBIL score is that which is above 750. If it is closer to 900, your credit standing is amazing. If it is lower than 650 banks will have issues trusting your repayment capabilities thus the chances of obtaining loans are slim. All these ultimately have an impact on your Home Loan eligibility. Thus not only should one complete all the payments on time and use the credit card efficiently but look forward to building a healthy relationship with his/her bank. So if your credit score is low then first you need to improve your CIBIL score it will help you to get instant approval for loans with low-interest rates on Home Loan.

Nothing helps your eligibility cause more than your relationship with the bank. If you have good financial transaction history and trust with the bank members it’ll help you get a long way. Make sure to keep your CIBIL score as high as possible. You should utilize your credit efficiently and effectively.