Your CIBIL Score is used to determine if you are eligible for a loan. India’s first credit rating agency, CIBIL (Credit Information Bureau India Ltd.), assesses your credibility based on your credit record, loan repayment patterns, frequency of loan applications, number of existing loans, and other factors.
Your credit score is based on evidence from CIBIL’s database about your credit history and is the result of rigorous mathematical algorithms. This information will also appear on every loan applicant’s credit information report, or CIR. The range of Credit score is 300 to 900, with 900 being the best and 300 being the lowest. A borrower’s credit score must be at least 750 to be easily qualified for a loan. You can choose the option of check CIBIL score on many financial websites.
When obtaining a home loan, a CIBIL score is critical.
Consider how your CIBIL Score influences your ability to obtain a mortgage:
Examines the state of your credit
Screening your credit wellness, often known as creditworthiness, informs lenders about your ability to repay a mortgage debt. A good CIBIL Score ensures them that you will be able to repay the housing loan on time. A low score, on the other hand, denotes a poor credit history, leading the lender to mistrust your ability to repay the loan. These loans have a smaller loan amount, a higher interest rate, and a lot of terms and restrictions.
The following factors go into determining the interest rate on a home loan
You will be able to negotiate cheaper interest rates with lenders if you have a good CIBIL Score. Furthermore, because you have a good credit history, a larger number of lenders will be willing to give you a home loan, allowing you to pick the one with the best terms. A low credit score, on the other hand, not only reduces your chances of getting a home loan authorised, but it also limits your capacity to discuss the loan amount and interest rate. Indeed, you will be forced to accept the lender’s low loan amount and high interest rate. Maintain and increase your credit score to the highest level possible if you want to get a house loan at a low interest rate.
Consequences of a CIBIL score of 750 or higher
A CIBIL score of 750 or higher expedites the loan application process and qualifies you for a greater loan amount and lower interest rate from a wider range of lenders. The loan is completed in a short period of time, and the funds are disbursed into your account. The better your credit score, the more likely you are to be approved for a house loan with a larger loan amount and lower interest rate.
The size of a home loan is determined by the following factors
If you have a good credit score, you will be eligible for a higher loan amount and a lower interest rate, which you would not be able to acquire if you have a negative credit score. In fact, lenders will offer you a reduced loan balance than usual if you have a bad credit score.
Final Thoughts
As a result, if you’ve always wanted to own a home, it’s always a good idea to work on improving your creditworthiness or CIBIL score, which will ultimately lead to an optimal home loan for you and your family. You are greatly mistaken if you believe that because a home loan is a secured loan, a good CIBIL score is not required. A solid credit score will always make it easier for you to get both secured and unsecured loans. It states that the customer has a high level of trustworthiness and a strong ability to return his debts on time.
Your CIBIL score can be low for a variety of reasons, including late repayment of current loans, overuse of credit cards, late payment of credit card bills, and so on. Your loan application is more likely to be refused if your CIBIL score (सिबिल स्कोर) is poor. If you are rejected, you should not apply again because this will lower your score. Instead, you should aim to improve your CIBIL score by paying your existing EMIs on time, limiting your credit consumption, and paying off other obligations. Free CIBIL score facility is given to users by many of the third-party lenders.
