Credit scores can significantly affect the financial aspects of any individual’s life as this score plays a crucial in deciding the creditworthiness of the applicant. A credit score is generally a number between 300 to 900, which is calculated for every individual, based on certain factors.
Here are some of the features that are factored in when calculating the credit score of an individual:
If your credit score is’nt good enough to be eligible for a loan then you may need to opt for a shorter repayment term or look for a co-signer for their loan requirement. Higher your credit score, higher the chances of acquiring a home loan easily and at competitive interest rates as well.
Ideal credit score for home loan
Higher the applicant’s credit score, lesser is the risk involved in sanctioning a home loan. Hence, banks and lending institutions consider a higher credit score as a means of deciding the creditworthiness of the borrower.
Lenders approach the credit rating agencies and perform a credit inquiry on all home loan applicants. This credit report tells them your borrowing history, financial positioning and outstanding dues, which all sum up as one credit score that is given to each applicant.
An ideal CIBIL score for home loan applicants is anything above 750. This kind of a score is considered to be very good by the lenders and is an assurance for them.
How to improve credit score for a housing loan?
To be eligible for a home loan and enjoy a quick and hassle-free process, it is crucial to have a good credit score and consistently work towards improving it.
Here are some quick ways to improve credit score:
While there are some financial institutions that may offer home loan for a lower credit score as well, it is ideal to opt for a well-known and trusted lender only.
Your credit score is very crucial if you are applying for a home loan as it helps lenders determine your eligibility for the loan. Ensure that your credit score is up to date and take consistent efforts to keep improving it so that your loan profile always stays in the good books of every lender.
Originally posted 2022-07-30 23:07:29.
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