How to Improve CIBIL score to be Eligible for a Home Loan?

Your CIBIL score is an indicator of your overall creditworthiness and a major factor that helps lenders evaluate your home loan approval eligibility. If you are currently seeking a home loan, your CIBIL report will prove to be of utmost importance since it is the first thing a lender will look into while processing your home loan application. If you have a low CIBIL score, there are ways through which you can improve it over time. Read on to know how.

Ways to Improve Your CIBIL Score for a Home Loan

1. Clear Dues in a Timely Manner

A surefire way of ensuring that your CIBIL score doesn’t go lower than it should is paying off your credit obligations on time. By making timely payments, you project the image of a financially responsible individual, post which you are branded as a low-risk profile. We also suggest that you verify the records of your loan repayment history in the CIBIL score.

2. Check Your Credit Report Regularly

Irrespective of whether you will spot an error or not, it is absolutely essential to keep regular track of your credit report. Doing so will help you detect inconsistencies and errors rather quickly. Credit Information Report-issuing bureaus like CIBIL are bound to offer borrowers a free credit report once every year. By making use of this facility, you can stay proactive and rectify errors in your CIBIL report. Ensure to check CIBIL score before applying for the home loan.

3. Maintain a Healthy Credit mix

Ideally, your credit records should be a diverse mix of secured as well as unsecured loans. If the number of unsecured loans taken by the borrower is too high, it translates to a poor CIBIL score.

4. Maintain a Balanced Credit Utilisation Ratio

Often, your lender would also like to see how well you have been managing your credit extensions, and if you want a loan, it is important that you are doing so sensibly. Which is why you must strive to strike the right kind of balance in the matters of utilising the credit granted to you by lenders and managing credit cards. Such actions act as proof for the lenders that you are responsible in the matters of your utilisation of credit and timely loan repayments.

But, it is important for you to note that owning too many unsecured loans can damage your home loan application as it increases your overall credit liability. Also, a high amount of credit liability can cause an increase in your repayment obligations considerably, which will make a lender wary. You may, in fact, not even get a home loan if the lender senses that a big portion of your monthly income is being used to repay debts. Due to this reason, you must always maintain a healthy credit utilisation ratio.

You can learn more about TransUnion CIBIL, factors that affect CIBIL score, as well as the steps you can take in order to increase your CIBIL score on aggregator portals like Finserv MARKETS. These platforms also provide information about home loans, Pradhan Mantri Awas Yojana (PMAY), as well as the credit-linked subsidy scheme, among other subjects. You can also apply for a home loan through these portals.