A credit scores is a three-digit figure that represents a summary of a person’s credit history and profile. An individual’s credit profile results from their credit behavior, which includes obtaining and repaying loans, maintaining credit cards, and so on.
Credit bureaus in India compute your credit score. TransUnion CIBIL is one of the country’s main credit agencies, and it determines your credit score. On your CIBIL report, the three-digit figure may vary from 300 to 900, with a score closer to 900 indicating strong credit. But, precisely, what do you mean when you say “excellent credit score”? Let’s see what happens.
WHAT IS A ‘BETTER’ CREDIT SCORE?
Your CIBIL score reflects your creditworthiness and influences your ability to secure a loan.
Credit Rating
What Does It Indicate?
300-599
A credit score of 300 to 599 means you have bad credit, and your prospects of getting a loan are slim. It informs the lender that the borrower has a bad credit repayment history, prompting the lender to refuse the loan, provide a higher interest rate, or require collateral.
600-749
You may be more eligible for a house loan if you have this score, but the interest rate may be high. In evaluating your application, the lender may take into account criteria such as your monthly income, employment stability, and previous debts.
750+
A credit score of 750 to 900 shows outstanding creditworthiness; thus, your prospects of getting a loan are excellent.
A strong credit score indicates that your loan application will be processed quickly and without difficulty. With a higher credit score, you’ll be in a better position to negotiate the loan amount, interest rate, and repayment conditions with lenders, resulting in the greatest loan offer available.
WHAT DOES IT MEAN TO HAVE A BAD CREDIT SCORE?
A solid credit score is required to qualify for a house loan. Due to financial difficulties, you may be unable to pay your bills on time, resulting in a worse credit scores. A low credit score poses a danger since banks are hesitant to provide a house loan. There are, however, additional options for getting a house loan with terrible credit.
HOW DO YOU GET A HOUSE LOAN IF YOU HAVE BAD CREDIT?
A negative credit score is frequently the consequence of not paying bills, defaulting on a loan, or failing to pay credit card bills on time. If you have outstanding debt and wish to apply for a house loan, you may enlist the help of a family member as a co-applicant. You may apply jointly, for example, if your spouse or wife has a strong credit scores. This will increase the likelihood of the loan being approved credit scores.
You must pay off the settlement amount at the bank and acquire a No Objection Certificate (NOC) to have a house loan authorized if you have defaulted on a loan or a credit card. If you are concerned that your house loan application may be refused owing to a poor credit score, you can contact your bank if you have savings, FD, or RD account. Because you have been a loyal client, you are most likely to get a house loan.
HOW DOES YOUR CREDIT RATING AFFECT YOUR HOUSE LOAN?
Your lender wants to know how much danger there is in giving you the money. This risk proportion is reflected in your credit scores. These are the benefits you will have as a borrower if you have a high credit score:
Competitive interest rates
You’re more than likely to be given a reduced or discounted interest rate, resulting in fewer EMIs. You will also get more offers from banks/lenders to choose the best alternative.
Terms of Repayment
You may negotiate the conditions of your house loan payments if you have a decent credit score. You’re also more likely to get a loan with a longer-term and lower down payment.
The loan’s amount
Your credit score measures how well you can repay a debt. Lenders prefer to take the least amount of risk when giving you money. You may borrow a larger quantity of money if you have a good credit score.
RAISE YOUR SCORE!
Don’t forget to verify your CIBIL report before applying for a house loan. Are you dissatisfied with your credit score? These are some tips for improving your credit score and getting a loan that meets your needs:
Pay your EMIS/Dues promptly.
Lenders negatively image you if you are late with your EMI payments.
Make insufficient use of your credit card limit.
Don’t use up all of your credit cards limit each month. You should also avoid carrying a credit card payback debt over to the following billing period.
Existing Loans Should Be Paid Off
Obtaining more loans will not improve your credit score if you currently have many debts that you are repaying.
Submit a Revision Request
Your credit score may be affected by inaccuracies in your credit report. If you find any errors, report them to the credit bureau along with any supporting documentation.
Finally, remember to check your credit score regularly to verify it has been updated to reflect your current financial situation. You may effectively receive a house loan and achieve a decent credit score if you keep the following guidelines in mind.
