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A CIBIL score is one of the critical factors that determine your home loan eligibility. Based on this 3-digit score, lenders decide whether or not to approve your loan. This is because it is linked to your creditworthiness as it is calculated based on your credit history.
While a score above 750 is ideal, lenders may sanction your home loan if the score exceeds 700. Besides your CIBIL score, financial institutions consider other factors such as your debt-to-income ratio, monthly income and employment history.
Hence, monitoring your score is essential before applying for a home loan to avoid rejections. Read on to know more about the significance of the score and why it matters for home loan approval.
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CIBIL Score Range: Important Facts to Know
A CIBIL score range can be anywhere between 300 and 900. It is generated by one of the most popular credit bureaus in India, TransUnion CIBIL. While a score closer to 900 is considered healthy, a number below 600 isn’t ideal and lenders may even reject your application.
Here is a quick rundown of the CIBIL score range and what they imply.
| CIBIL Score Range | Meaning |
| 800 and above | Considered to be an excellent score, indicating that you are creditworthy and have stable finances |
| 700 – 799 | This score is good and indicates that you have a proven credit-management track record |
| 600 – 699 | Considered as fair, implying that you may not have enough experience with credit or have missed payments in the past |
| Below 600 | This is a poor score, implying that you are either inexperienced with credit or have been consistently missing payments in the past |
While the table gives a generalised overview of the CIBIL score range, keep in mind that it isn’t considered in a vacuum. Lenders will review your profile as a whole, and determine if you make the cut.
However, if your score falls in between the range of 600 and 699, this could spell trouble, and may lead to a few delays. Some lenders may approve your home loan at higher interest rates.
So, understanding the score range helps you assess which category you fall into. This is why it is important to know your score before you apply. Thankfully, you can initiate a free CIBIL score check on the official CIBIL website once a year.
Minimum CIBIL Score for Getting Home Loan Approval
The minimum CIBIL score requirement for a home loan varies from one lender to another. While some maintain a cut-off score of 750, others may prefer a score of 650 for home loan approvals.
However, if you have a score of less than 600, you may find it difficult to avail a home loan. It is well worth it to wait a few months and work on improving your score to reach the high 700 mark before applying.
To know where you stand, initiate a free CIBIL score check by visiting the CIBIL portal. Simply click on the tab ‘GET YOUR FREE CIBIL SCORE’, fill the form, and access your CIBIL Score.
You will also get access to the CIBIL report, where the CIBIL score range will be clearly outlined. Alternatively, you may access your free CIBIL score and report from your bank’s website.
Importance of an Optimal CIBIL Score
There are many advantages to maintaining a healthy credit history and a good CIBIL score. Here are some perks of maintaining an optimal score:
- Increases your home loan eligibility
- Helps avail loans at affordable interest rates
- Minimises your overall borrowing costs
- Offers higher negotiating power
- Helps in the swift processing of your loan application
- Enables you to access other forms of credit, like personal loans or credit cards, quickly
- Helps you enjoy special discounts and offers
Tips to Boost Your Score
There is no need to stress if your score is below the desired limit set by your lender. You can boost your CIBIL score by following these tips and avail a home loan effortlessly.
- Repay your existing loans and credit card bills without delay
- Maintain a low credit utilisation ratio
- Opt for a healthy credit mix that consists of both secured and unsecured loans
- Avoid closing old credit accounts as these establish a positive history
Following these tips can go a long way in helping you maintain an optimal CIBIL score. With a good score, getting home loan approval becomes easy. Now that you know the significance of a good CIBIL score, check it regularly. You may visit the CIBIL portal or your bank website to initiate a free CIBIL score check.
If you plan to monitor the score regularly, you can opt for paid subscriptions and get regular updates about your CIBIL score. Checking your score and taking measures to improve it can help you avail home loans hassle free at affordable costs.
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Disclaimer: The information provided in this article is for educational and informational purposes only. It does not constitute financial advice or professional guidance. The content is not intended as a substitute for consulting with qualified financial professionals. The author, publisher, and website do not assume any responsibility for any financial consequences arising from the use of this information. The reader is advised to conduct thorough research and seek advice from financial experts before making any financial decisions.
