Our own house is a dream for all, and a home loan is the best mediator to fulfill this desire. There are many criteria to get one’s application acceded. However, the most crucial parameter is the CIBIL Score.
The score generated out of the credit history of the client is known as the Credit Information Bureau Limited (CIBIL) score or credit score. To have a good credit score, one must settle all his/her dues timely to avoid paying late fees.
What is a good CIBIL Score?
- 750 and above: Outstanding credit
- 700 – 750: Appropriate credit
- 600 – 700: Average credit
- 0-600: Lowest credit
This parameter is so important that it is the key feature in which the authorities check and sanctions your loan. It’s a deal-breaker for Home Loan.
Below are a few points to know how to raise your CIBIL Score to invest in your dream house:
Pay your dues on time
It may sound repetitive, but to score an excellent CIBIL score, you have to pay your dues on time. Try to pay your dues automatically from your salary before monthly expenses begin. For this, you can use the auto-pay feature if you have taken the loan from the bank in which you have your savings account.
Check your outstanding credits
If you are paying your outstanding dues regularly, then there is no need to check the outstanding credits. You must try to clear your dues regularly to maintain your CIBIL Score.
Build enough credit history
Sometimes when an applicant applies for his/her first loan, banks check the details of the applicants’ credit card or loans to know the credit history. If the applicant does not own a credit card, then he/she is advised to apply for one and maintain it regularly in order to show a good credit score.
The majority of loans are of two types, i.e., secured and unsecured loans. Secured Loans are expensive loans like loans for a car or home if they are waived off on time then it contributes a sizeable amount of credit score. If a large number of unsecured loans are pending which are without collateral, then the graph of CIBIL score falls.
Use your credit card wisely:
Regularization of credit cards is necessary; otherwise, your CIBIL score will degrade. You must ensure that your expenses are within your credit limit. If in case of some emergency, your expenses exceed your credit limit (example, expenses are Rs. 20,000 and limit is Rs. 30,000) then immediately request the bank to extend your limit. You must pay off the due amount on time and try to avoid interest.
Don’t apply for too many loans
If you already have three to four loans, then the probability of getting another loan sanctioned is too low. Credit limit must be maintained, and the loan must be taken only if the previous loans and dues are paid off. If your loan gets rejected, then the reason might be your low CIBIL Score, so keep a regular check on it.
Check your Credit Score regularly
You can check your CIBIL score by signing in on the CIBIL’s official website where by just paying a small fee you can keep a check on your credit score. The basic information required for checking the score is the name, address, and income with an identity proof. Once you fill in the required details, then after paying the fee the CIBIL Score will be generated. After all the required formalities are done, the CIBIL report generated will be sent to your E-mail address. If you check your credit score even two to three times a year, then it is sufficient enough. If you find any mistake in your report, you can contact the bank for clarification.
Any of you can fulfill your dream of owning a house with a lower home loan interest rates. Home loans are sanctioned easily with the help of an appropriate credit score and by following all the guidelines and suggestions given above.