The credit score is an important aspect when it comes to loan. For the home loans, it plays even major role because the home loan is a loan consisting of long tenures as far as repayment is concerned. In a way, a credit score is a 3 digit numeric summary of entire credit history for you. It usually varies from 300 to 900 numeric score. The credit score is dependent on the credit history. You can obtain the same from CBIL by paying nominal charges and come to know about your credit score before you apply for the home loan. The credit report will be consisting of the information such as record of credit card bills, late payments, defaults of past credits (if any), loans, credit cards, recent information of the credit card or loan application and many more.
The CIBIL score and credit records are closely related in terms of sanctioning of the loan. If a person, who has applied for the loan, if that person has a good financial transaction record, good CIBIL score and strong history, then the lender has a sense of confidence and faith as far as repayment of the same is concerned. If the credit records are good, then there are high chances for the loan to get sanctioned. However, if at the same time, the person does not hold the good credit record then, there are considerable chances for the loan to get rejected and the same is applicable in terms of home loans as well. Rather, it impacts home loan more because the amount of the loan and duration of the loan tends to be high in such cases.
CIBIL collects all the data related to your financial history and organizes the same to provide to the banks or financial institutions whenever required. CIBIL manages to get all the information from the banks or financial institutes that are registered with it. The information is provided on monthly basis to CIBIL and on the basis of that information; the CIR (credit information report) is prepared along with the credit score for commercial organization as well as the individuals. This determines the creditworthiness of the person and that plays a significant role in deciding that whether the home loan, or for that matter any kind of loan should get approval or not.
The person can check the CIBIL score online on the official website. You can full the application form that contains basic details such as name, address, date of birth, income, ID Proof, and loans you have taken. Once, the details are filed you will be redirected to the page, where you will have to do the payment of 470 rs. Once done, your authentication details will be taken and once gets completed, CIBIL will send your score through email within 24 hours.
It is always advisable for the person to improve the credit records and CIBIL score, before applying for the home loan. The person can improve the credit records by paying all the bills and instalments on the time, without causing any kind of delay. Also, the person has to ensure that the payment should be done in the full & complete mode and not on the part-payment mode because the part payments will also be recorded as the overdue in the report that will have adverse impact on your records. The banks or the lenders never appreciate the late payments. The person should also keep a check on the usage of credit limit as well. It is advisable not to use the entire credit limit and thus, it is essential that the person keeps a check on the utilization of the available credit. The low or nil amount of the outstanding balance can improve your credit score; hence try to maintain the same. It is also needed that the person evaluates all the bank accounts he or she holds, be it single account or joint account, so that one does not miss any payment during the month. The person can keep a track on the credit history and transaction by taking the timely updates. The continuous monitoring will be helpful to identify and remove the errors on immediate basis. The person must also maintain the balance between the secured & unsecured loans. The combination of the secured & unsecured loan will be helpful to maintain the good credit score. Too many unsecured loan can be risky for the loan holder.