Home Loan

How To Raise Your Credit Score In Order To Qualify For A Home Loan?

29 JUL 2022

The dream of owning a home is common, especially in India. In order to construct that dream into a reality, we need to take a loan. It is no secret that having a good credit score is essential when applying for a home loan. Having an excellent credit score pays off. A high credit score will help ensure that you get the best interest rate on your mortgage swiftly. It could even mean the disparity between being approved for a loan and being denied. A poor CIBIL score might be alarming for those in desperate need of cash; it can negatively impact their borrowings.

A loan can be obtained in several ways, all depending on the size of the loan or the amount the borrower requests. All the banks are now compelled to verify the CIBIL records of credit instruments such as personal loans and credit records of every borrower. Even though a person’s CIBIL score is poor, there are strategies to increase the score.

Credit scores are calculated after examining a person’s credit files and are used to assess whether or not they are creditworthy. If credit ratings fall below a certain threshold, banks are ready to decline loans. As a result, improving this score is critical before applying for a house loan.

CIBIL is amongst the most well-known credit rating firms in India. Banks and financial organizations use the CIBIL credit score to assess the credibility of borrowers. An applicant’s credit score must be 700 or more significant to be considered for a loan. Even though it is ultimately under the bank’s purview to provide a loan, a score of less than 700 will make it challenging to obtain a loan promptly.

Are you looking for a home loan? Do you have a poor credit history? Don’t fret! If you are looking to improve your credit score, there are a few things that you can do to help make the process for a home loan a little easier.

How To Improve CIBIL Score Quickly?

Follow these seven wise steps in order to increase your credit score so that it will be sufficient when you apply for a home loan. You should, nonetheless, continuously practice these strategies and maintain track of the EMIs of your Personal Loan and keep a healthy record of monthly Credit Card payments.

Improve Credit Score

Step #1:

Pay Your Dues On Time: Missed an EMI? Delayed your Credit Card payment? Then get organized. Credit scores can be adversely affected by non-repayment of credit card bills. Clearing these amounts can positively affect your credit score and increase your chances of acquiring home loans. Scrutinizing your CIBIL score on a timely basis provides a clearer picture of what needs to be done to remove the weakness in your profile and raise your credit score considerably.

You should set reminders for your payments and be disciplined with credit. Settlement of non-paid debts can have a strong influence on your credit score. Delayed EMIs not only increase your income due to additional charges such as late fees but also diminish your credit rating. So if you are looking to improve your CIBIL score, pay your dues on time and rack up a good score. Use a service that lets you automate bill payments so that you don’t have to worry about missing deadlines.

Pay Dues On Time.

Step #2

Anything Too Much Is, Well, Excessive: Utilize credit responsibly. Don’t sink yourself in loans at once. The number of loans you apply for should be kept to a bare minimum in a given time frame. Repaying one debt before taking another can protect your credit record from plummeting. If you take out many loans simultaneously, you’ll find yourself trapped in a vicious cycle of inadequate finances. As a consequence, your credit score will continue to decline. 

How can you enhance your CIBIL score right away? Your credit rating will improve if you apply for a loan and properly repay it.

To improve your chances of getting a house loan, cancel any loans you are no longer using and keep just the ones that show prompt payments active. You can increase your eligibility for the loan amount the bank finally settles on by decreasing the risk of exposure to an inactive loan portfolio.

Step #3

In Order To Increase Your Chances Of Getting A Home Loan, Ensure A Healthy Credit Combination: To create a strong credit score, it’s best to have the appropriate mix of secured and unsecured loans with extended and concise terms. The presence of too many unsecured loans might be perceived as unfavourable.

Step #4

Apply For Credit Cards Or Loans Within Your Available Credit: You don’t want to appear to be in constant need of credit. Apply for a fresh credit only if you need it and can pay it back on time, not if you want it. Having too much debt might potentially harm your credit score.

Step #5

Keep Track Of Your Co-signed, Guaranteed, And Joint Accounts Timely: For missed payments, the banks consider you to be equally accountable in co-signed, guaranteed, or jointly owned accounts. The carelessness of your joint holder may damage your capability to acquire credit when you require it. It’s best to dodge becoming a mutual account holder or a loan guarantor.

Step #6

Examine Your Credit Report For Over A Year By Checking It Every Month:

How can you raise your CIBIL score? Evaluate your CIBIL Score and Report regularly for any discrepancies. When it comes to updating your records, adding the wrong information to your report, and delaying recording information, CIBIL is vulnerable to making mistakes. It’s possible that a debt you’ve paid off hasn’t been reflected on your credit report, which might negatively influence you. If you spot any issues, rectify them right away.

Step #7

Gradually Build An Excellent Credit History: Debt is frequently necessary. The objective is to acquire a suitable debt, have good spending, and pay it off on time.

You might choose a longer term to keep your EMI low when taking out a loan. You can also regard increasing your credit limit. How can this help you enhance your CIBIL score? Taking loans does not indicate that you will spend more money. You should have more credit and hold your usage low to improve your credit score. You may create a good credit score over time, which will allow you to receive rapid and extensive loans.

Good Credit Score

Wrap It Up:

It is easy to be get affected by bad debts. Bad debts affect the banks’ and borrowers’ credibility for obtaining future loans. To be qualified for a home loan in India, it is essential for a person always to maintain a high CIBIL score and a good track record of credits with any bank. This article provided tips to help you increase your CIBIL score. If you are ready to use these tips, get started today to improve your CIBIL score and increase your chances of getting the home loan you need.

Author - Confident Group

As the most trusted real estate brand in the nation, we at Confident Group strive to create a positive, smooth and transparent medium for potential home buyers with anything and everything related to home purchase. We provide informative and engaging articles which cover useful details across many verticals from the real estate sector. Our 2-decade long expertise in building infrastructure projects across Kerala and abroad backed by the trust of over 10,000 customers earned us the reputation of being the best as a real estate brand in Asia. We hope that our blogs will help in translating our experience for the prospective buyers who are looking for their dream home.

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