CIBIL Score for Home Loan

Usually, the minimum CIBIL score for home loan preferred by lenders is 700 to 900. However, in some cases, they may also accept a home loan application with a credit score of 650 or above as the housing loan is a secured form of credit.

CIBIL score plays a crucial role if you wish to apply for a home loan or any kind of loan or credit cards. A good CIBIL score helps you improve loan eligibility and get higher LTV at minimum interest rate. Ii is basically a three-digit numeric representation of a borrower’s creditworthiness. The credit score for home loan calculation is based on the borrower’s past repayment track record. Therefore, deciding whether to offer a home loan or not to an applicant becomes easy for the lender. CIBIL score required for home loan is usually 700 or above. If you are applying for a home loan, it is most important to have a good credit score.

Having a good credit score for home loan has several benefits as mentioned below:

• If you have a good credit score, the chances of getting a home loan become much higher. This is because the chances of repayment are higher for the lender as they depend on your credit score to judge your creditworthiness and repayment capability.
• One of the most important benefits of having a good CIBIL score for home loan is that it can get you the lowest interest rate on a home loan.
• Usually, applicants with a good credit score have higher chances of getting the best home loan deals. For instance, you might get a concession on interest rate or processing fee.
• Having an excellent credit score gives you more negotiation power as the lenders will be happy to provide you a housing loan.
• You can avail of a higher loan amount if you have an excellent credit score for home loan. This will result in fulfilling your housing-related requirements efficiently.
• With a great credit score, the home loan process becomes easier and faster. 

Every bank has its own set of eligibility norms for housing loans. The CIBIL score requirement may vary from bank to bank depending on the borrower’s profile, banking relationship and other factors. Following is the table for CIBIL score required for home loan from different banks:

State Bank of India (SBI)

PNB Housing Finance Ltd.

If you have a low credit score, don’t worry. You can always enhance your CIBIL score by taking some measures. Following are some useful tips on how to improve CIBIL score for a home loan:

• Pay your dues timely: Make sure that you pay your current EMIs or credit card bills on time to get better credit score for home loan. You can set monthly reminders to avoid missing your payments. With timely payments, you can definitely improve your CIBIL score as it presents you as a responsible borrower.
• Maintain a low Credit Utilization Ratio: You can request your bank to increase the limit of your credit card, which will help you maintain a low credit utilization ratio and eventually improve your credit score. Also, keep your credit usage controlled by utilizing as less credit as possible. Lower credit utilization for long periods shows that you are capable of handling additional credit. It will increase your CIBIL score for home loan and make it easier for you to get a home loan approval.
• Keep a healthy credit mix: It is advisable to maintain a healthy credit mix to improve your CIBIL score for a home loan. It means having the right combination of secured and unsecured loans. People with too many unsecured loans usually have lower CIBIL scores. The minimum CIBIL score for home loan should be at least 700.
• Keep a track of your credit report: Make sure you check your credit report frequently to improve your CIBIL score. Doing frequent credit score check will eliminate the chances of any error being recorded in the report related to your payments, EMIs, etc. It happens many times that a wrong loan transaction is registered on the individual’s name. If you find any discrepancy in your credit record, report it to the credit bureau for immediate correction. Even a single mistake can tarnish your credit score, making it difficult for you get a home loan.
• Don’t close your old accounts: Do not close the old loan/credit card accounts as the lenders will analyze your repayment capacity through it by checking how wisely you managed your credits in the past.

You can access your CIBIL score and report online by visiting the official website of CIBIL. Follow the steps given below to check your entire CIBIL report along with the CIBIL score:

• Open the official website of CIBIL. 
• Fill in the online application form by entering the required details like your name, date of birth, address, contact number, income, identity proof, address proof, and loans taken by you. You can also check CIBIL score by PAN card.
• After filling in all the required details and submitting the form, you will be directed to the payment page. 
• Here, you will have the option to pay the charges of Rs. 470 by using your credit card, debit card or net banking.
• After the successful payment, you will be directed to the authentication page. 
• Here you will have to answer 3 to 5 questions about your loans and credit cards to proceed further.
• Once you have identified yourself and your authentication is successful, CIBIL will send your score within 24 hours through e-mail.

You can also get a free credit score check as CIBIL provides you one CIBIL Score and Report once a year without any charge.

Having an excellent or poor credit score can have a major impact on your home loan application. Your credit score impacts your home loan in the following ways:

• A low or poor CIBIL score range can often lead to the rejection of your home loan application. That is because the lender may consider your profile as a risky one. Applicants with poor CIBIL score add on to the risk factor for lenders. 
• The minimum CIBIL score for home loan should be 700. If your credit score is between 600 to 700, you may still get approval on your home loan, however, the rate of interest will be higher than the ones offered to individuals with a higher credit score.
• If an applicant has a low credit score, the lender may not take the risk of lending a home loan for a longer-term and hence, the applicant may get the loan for a shorter tenure. Getting a home loan involves a huge amount and for many people, repaying such a big amount can be impossible in a short period. 
• Having a not-so-impressive CIBIL score for home loan may also affect the loan amount eligibility of the borrower.