Factors That Affect Your CIBIL Score for Home Loan

Factors That Affect Your CIBIL Score for Home Loan

If you are applying for home loan, you might be aware of the fact that how a poor CIBIL score can affect your loan eligibility. Thus, maintaining a good CIBIL score is absolutely important for an individual so as to deal with banks and other lending entities. CIBIL stands for Credit Information Bureau of India, and does the task of collating loan as well as credit related information. Moreover, this data or information is then processed with subsequent credit score reports of customers.

However, as far as credit bureaus are concerned, they consider plenty of parameters to decide the final credit score of the customers. More to the point, this information could be your repayment credit card history, details about your secured and unsecured loans and last, but not the least your credit utilization.

A CIBIL score stands for the creditworthiness of an individual and it usually lies in the range of 300-900. Furthermore, usually a score of 750 and above is considered brilliant, and a bank can easily rely on you with minimum risk of default. Thus, if you have a good CIBIL score, you will surely be eligible to take a loan as compared to those who have a score of less than 750.

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Now let’s take a look at some important factors, if ignored by can badly affect your credit score:

  • Not depositing enough cash in your loan account: It would not be wrong to say that many times people have to face a dent in their credit reports for nothing but because of their delayed or non paying their loan installment. For example- If you have applied for a home loan which is supposed to be auto-debit from your monthly installment, you need to have enough amount in your loan account. You need to deposit enough cash in your account for timely loan repayments. If you miss to make that happen, it can make your credit score low.
  • Owning multiple credit cards: If you own multiple credit cards, for some it might be a status symbol to flaunt and acts like a big medium for funds. But, the actual reality is something different. Maintaining various credit cards directly reflect on your credit score and lower your score. No matter what is the case-whether its balance transfer or missed payments, your credit score is negatively affected. Not only this, in fact maintaining too many credit cards is not an easy thing, and can strain your hard-earned money, if not managed properly with care.
  • Delayed Credit Card Payments: Many of you will surely on the fact that in our busy life, not only one but there are plenty of things that we forget to do. And, paying your credit card bill is one such important thing. Furthermore, one of the most common reasons for this is bank itself. Yes, if you are an esteemed customer of a bank, most of the times banks don’t charge you with the late payment fee. As a result, this thing makes you feel relaxed which ultimately affect you in the long run with your late payment credit history. So, even a one- time late back attitude of yours can effect your CIBIL score tremendously.
  • Availing too many unsecured loans: These days, availing loans for many personal needs has become quite a common thing. People usually look out loans for house, vehicles and various other needs. However, this thing might sound like a normal situation, but if you are associated with too many loans, this thing will surely effect your CIBIL score. This thing is especially true in the case, if your loan mix has more unsecured vis-a-vis secured loans on your name.
  • Making too many loan enquiries: If you want to obtain a credit, it can be a daunting task. Yes, in order to get a suitable home loan deal, customers usually make enquiries with many lenders or banks. Doing this thing can actually decrease your credit score just because you are doing loan enquiries with the help of various lending companies. Thus, too many hard enquiries will create a negative impact in your credit score, and shows that how eagerly you are willing to have the credit.
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So, all you need to do is just try to avoid these mistakes so as to have a good credit score.

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  • Home Loan Interest Rates September 2023
    Axis Bank8.75% - 9.15%
    Bank of Baroda8.50% - 10.60%
    Citibank8.75% - 9.15%
    HDFC8.50% - 9.40%
    ICICI Bank9.00% - 9.85%
    Indiabulls Housing Finance Limited8.65%
    Kotak Bank8.85% - 9.40%
    LIC Housing8.50% - 10.50%
    Piramal Capital & Housing Finance10.50%
    PNB Housing Finance8.50% - 10.95%
    Reliance Home Finance8.75% - 14.00%
    State Bank of India/SBI9.10% - 9.65%
    Tata Capital8.95% - 12.00%
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