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CIBIL Score and its effects on your home loan application
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CIBIL Score and its effects on your home loan application

CIBIL stands for Credit Information Bureau (India) Limited. It is the first credit information company in India, established in August 2000. The company collects and maintains credit records of individuals as well as commercial entities. This includes any and every transaction of money through loans and credit cards.

And what is a CIBIL score?

A credit score is a three digit numeric summary of your entire credit history. It is prepared based on the information provided in your Credit Information Report. The credit score normally is ranging from 300 to 900.

CIBIL plays a major role in loan application and approval processes. Without a satisfactory CIBIL score, one cannot be said eligible for any sort of loans.

One can check their CIBIL score online. An online score request form is available on the official website. It is both easy and convenient and the entire process is completed in a matter of minutes for a nominal fee.

cibil score and its effects on your home loan application

How to keep a good CIBIL score?

1) Never delay payments – Procrastination is one of the harshest truths of our current world, with most of us falling prey to it. Delaying your bill payments, be it credit card or loan EMIs could see your score dipping, which makes timely payments a key role in maintaining a decent score. While a bank may be OK with ignore the first delayed payment, repeated delays could bring unwanted attention from their part.Click here to read about How to Improve your cibil score

2) Mix your credit – Just like variety adds spice to your life, variety in terms of credit can do a world of good to your credit score. A mix of secured and unsecured loans can reflect favourably on the score, with a varied portfolio preferred by most lending firms. A skewed portfolio in favour of a particular type of loan (unsecured loan) could see your score taking a negative route.

3) Limit your cards/loans – A quick look at our wallets will show that a number of us have more cards than we need. While a problem of plenty is good in a few cases, owning too many credit cards can have its own drawbacks. Not only does it complicate credit repayment, but it also pushes us to spend more than we need, leading to debt in our life.

With many banks such as HDFC Bank, Canara Bank and Vijaya Bank initiating base rate cuts, loans are set to become cheaper! Coming ahead of the wedding and festival seasons, banks are expected to lower loan rates to keep up with competition. This bodes well mostly for housing loan seekers who can take advantage of lower EMIs.Click here to read about  Common Mistakes done by borrowers to get home loan

Housing loan seekers, generally, would do well to purchase and review their CIBIL reports before applying for a loan. CIBIL scores and income levels are two key factors that determine a borrower’s loan eligibility.

Thereby, housing and home loan seekers should obtain their CIBIL scores and reports prior to applying for loans. Such ‘soft inquiries’ do not adversely impact CIBIL scores. However, banks making inquiries, termed ‘hard inquiries’, do affect a borrower’s CIBIL score.

With more investor awareness about CIBIL and its ratings, loan seekers stand a better chance of availing loans! Home is heaven and home loans help bring heaven on earth.


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