Your CIBIL score is an account of your credit history and your record as a borrower. It basically talks about the payment history of the loans and credit facilities that you have availed in the past. While evaluating your Home Loan application, the lender would prefer to check your CIBIL score to know about your likelihood of paying back. A good credit score marks a sound financial health and points to the fact that you aren’t overleveraged.
Why CIBIL is Important ?
A good CIBIL score not only proves your financial credibility but would also help you get lower Home Loan interest rates. You may also be entitled for a waiver of fee and other charges levied by the lender while applying for the Home Loan and a faster Home Loan processing as a reward.
How Does CIBIL Work ?
The CIBIL score functions between the range of 300 to 900. A score of 750+ is regarded to be excellent for loan applications while a score below 600 is considered to be poor for your financial credibility. Activities such as defaulting on EMI payments, heavy usage of credit card limit and application for multiple loans in a short span can adversely affect your CIBIL score. Also, availing of more unsecured loans than the secured ones and a constant rise in the outstanding balance on your credit card can lower your credit score affecting your financial plausibility.
As lenders perceive the Home Loan applicants with a higher CIBIL score to be more financially stable, it is considered to be beneficial to undertake measures that are healthy for your financial status. Timely payment of EMIs and a constant check on the outstanding balance of your credit card would prove your financial credibility. Lower rate of interests and additional fee waivers come as added benefits for those having a considerably good credit score making it a win-win situation for them.