So, you have finally decided to become a homeowner. You have everything planned, down to the decor and the colour of your walls. But for a home, you need a home loan. And for a home loan, you will most likely need a good CIBIL score. But how much CIBIL score do you require for a home loan, and how to get it?
What is a CIBIL score?
A CIBIL score is a metric of measurement used by most lenders to judge your repayment abilities. Since the RBI authorizes it, most lenders consider the CIBIL score as one of the most critical factors of your home loan application. It is a three-digit number and ranges between 300 to 900. CIBIL evaluates your payment history, credit handling trends, and existing banking to arrive at a final score.
CIBIL score for a home loan
Ideally, the CIBIL score required for a home loan is 750 and above. It is the ideal score for anyone to have since it demonstrates a good credit history. You are still eligible for a home loan if your score is between 650-750. However, having a CIBIL Score between 650 -750 will make the lenders look more closely at your finances. Most lenders consider a score of 650 as the minimum requirement for a home loan.
Additional Read: Do Credit Scores Affect Your Home Loans?
Benefits of a good CIBIL score
A good CIBIL score can ensure that you get a low home loan interest rate. Also, it gives you more negotiating power, more significant loan finances, and flexibility in repayment. However, if you do not have a good score, it can get challenging to get a home loan. Lenders may take longer to approve it. You might receive higher interest rates, less flexibility in repayment, as well as only partial financing.
How to improve CIBIL score
If you do not have a good score yet, don’t worry. You can still improve your home loan CIBIL score. Since your CIBIL score demonstrates your ability to repay – consider doing the following:
- Keeping credit utilization under 30%
- Paying your EMI’s on time
- Paying your credit card bills on time
- Monitor your credit report regularly
These steps should improve your credit score and allow you to get a lower home loan interest rate.
In case you do not want to do the above, consider applying for a loan with a co-applicant. The co-applicant should be someone with a high CIBIL score. This will improve your chances of getting a home loan quickly.
Additional Read: Is It Possible to Improve Your Home Loan Eligibility?
An ideal solution for your home financing needs
Are you considering getting a home loan? Not sure what your options are with your current credit score? If yes, then the most important thing for you is to choose a well-reputed lender.
If you or a loved one needs a home loan, then reach out to Tata Capital today. You can avail reliable consultation on your financing options, as well as your CIBIL score. Also, you can take advantage of Tata Capital’s competitive interest rates, multiple financing options, and flexible repayment options.
Your dream home awaits you. Apply for a home loan with Tata Capital today.