Nowadays most people take home loans to buy a house. Whether you will get a home loan or not and if you get it, then at what interest rate, all this is decided by the bank by looking at your credit report. Banks test your credibility by looking at your CIBIL score. Although there are some other factors, CIBIL is the most important factor in this. Therefore, if you want to take a home loan with a cheap interest rate, then maintain your CIBIL score. Know what your CIBIL score should be for this.

Why is the CIBIL score important?

CIBIL score is like a kind of report card. CIBIL score reveals the credit history of the applicant and his loan behavior is checked. The range of CIBIL scores is between 300 to 900. The better the score, the better the interest rate you will get the loan.

This is the parameter of the CIBIL score.
If a customer's CIBIL score is between 300 to 550, then it is considered bad. If it is between 550 to 650, it is considered average. If it is between 650 to 750, then it is considered good and if it is between 750 to 900, then it is considered very good.

What should be the CIBIL score for a cheap home loan?
According to experts, if your CIBIL score for a home loan is between 550 to 650, then it will be considered average. In such a situation, banks can give you a loan or can also refuse. But if the CIBIL score is between 650 to 750, then the banks consider it and give the loan. On the other hand, if the CIBIL score is between 750-900, then the bank will offer the loan to the applicant with the best interest rate without any delay.

What will happen if the CIBIL score is very low?
If the CIBIL score is low, then the problem will increase. There will be difficulty in getting a loan from the bank. Loan approval/rejection depends on the credit score. If the score is low, then the chances of loan rejection are high. The low score also affects the loan amount. Meaning, that even if the loan is approved, it is possible that the approval may not be for the amount you want to take.

Who prepares the CIBIL score?

Several credit bureaus issue the CIBIL score. Among these, credit information companies like TransUnion CIBIL, Equifax, Experian, and CRIF Highmark are considered prominent, these companies are licensed to collect financial records of people, maintain them, and generate credit reports/credit scores based on this data.

How to improve a bad CIBIL score?

Pay any kind of loan on time. Maintain balance in the use of home loan, auto loan, personal loan, and credit card. Pay the credit card bill. Keep the credit utilization ratio low. Avoid taking loans on credit cards. Check your credit score from time to time.

Disclaimer: This content has been sourced and edited from ZEE Business Hindi. While we have made modifications for clarity and presentation, the original content belongs to its respective authors and website. We do not claim ownership of the content.