Buying a house is one of the major achievements in your life. And with the easy availability of financing options – since you can apply for home loans online now – it’s become easier than ever before. But ever wondered why some people get more loan amount at lower interest rates than others? It’s because of the CIBIL score, which is a crucial factor in determining whether or not your loan is approved.
Applying for a Home Loan
Lenders access your CIBIL score prior to processing your application for home loan. These scores are generated as per your credit history, loans obtained and loan repayment patterns. A high CIBIL score means strong creditworthiness and the person gets better home loan amount and interest rates while someone with low score is seen as a risky borrower from lenders.
Here are some crucial steps to leverage your CIBIL score when applying for a home loan.
Check your CIBIL score prior to applying for home loan
It’s important to know your credit score beforehand so that your home loan doesn’t get rejected by the lender. By checking credit score, you can ensure that all your financial details and credit history are in order. To access your credit score, you can log in to the CIBIL website and pay a minimal amount of Rs. 470. And in case your score is not up to the mark, you can rebuild your credit record by improving it and become eligible for a home loan.
Do not apply for a home loan repeatedly
If a lender rejects your home loan application because of your lower-than-required credit score, do not just apply to a different lender. This is because another lender will also enquire about your credit score, which reflects negatively on your credit rating. Instead of reapplying right away, try to improve your credit score by repaying debts and cutting down on credit card usage.  
Don’t go overboard with unsecured loans
Make sure you don’t have too many unsecured loans. And if you do, try to close or limit them and even close your credit cards with high limits. These indicate outstanding debt on your credit history and since lenders examine your Debt to Income ratio prior to sanctioning a home loan, this will have a negative impact on your eligibility. Lenders consider high Debt to Income ratio as a possible default as the borrower may not be able to make additional EMI payments.

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