Understanding the CIBIL Score: How It’s Important In Home Loan Availability
- July 19, 2021
If you are trying to secure a home loan to buy home in Mumbai, you must have heard the term CIBIL Score. It is an indication of the creditworthiness of the borrower. However, for the layman, it is difficult to understand what the CIBIL score means. Let’s understand it.
What Is a Good CIBIL Score?
A CIBIL score is one of the numerical expressions that can swing between 300 and 900 points. The score is determined after analyzing the credit history and files of an individual. The civil score is the simplest way to describe the creditworthiness of a person. Normally, financial institutions consider a CIBIL score between 700-900 points as good.
Good CIBIL Score for Home Loan
As you may have already surmised from the above point, if your CIBIL score is between 700-900 points, then your chances of getting a home loan are very high. CIBIL scores between 650-699 points are considered satisfactory but you may need to negotiate with the financial institutions to secure the loan. CIBIL scores below 650 are considered doubtful, and getting a loan with such a CIBIL score is extremely difficult.
Factors That Affect CIBIL Score
CIBIL Score is a flexible thing that changes depending on a couple of factors. For example, late payments of EMI are one of the major factors that affect your CIBIL score significantly. Even a single late payment can have adverse impacts on your CIBIL score.
Understanding the CIBIL Report
The CIBIL report comes with details of your financial conditions. It describes all the loans you have availed, including your automobile loans, credit card usages, overdrafts, etc. It also contains your passport number, PAN, and voter identification number, and contact information. Your monthly salary and your annual income details are also described in the report.
What Is A Home Loan?
Now that you have understood factors about CIBIL score, it is time for you to understand home loans. A home loan entails a certain amount of money that a person borrows from money lending agencies to buy home in Mumbai. If you cannot pay the dues of the home loans, the financial institution will have the legal rights to recover the outstanding amount by selling the property.
Guide To Improve the Credit Score
The good thing is, you can improve your CIBIL score by following certain rules and regulations. Start with paying all your outstanding EMIs. Make it a habit to make the payments on time. If your CIBIL score is within the good score range, you can use it to your advantage and ask the financial institutions to give you their interest rates. As these institutions will be eager to lend you money, you can easily negotiate with them to get the best rates of interest.