CIBIL: Home loan borrowers need to maintain the score in this range
CIBIL scores are one of the primary factors considered by lenders when evaluating borrowers' creditworthiness for home loans. A CIBIL score is a three-digit numeric summary of an individual's credit history and repayment behaviour, ranging from 300 to 900, with 900 being the highest score.
For a home loan, a good CIBIL score typically falls in the range of 750 and above. However, different lenders may have slightly different criteria, and some may consider scores above 700 as acceptable.
A higher CIBIL score reflects a better credit history and increases the likelihood of approval for a home loan. It also often leads to more favourable terms, such as lower interest rates and higher loan amounts.
It's essential to maintain a good credit score by paying bills and EMIs on time, keeping credit card balances low, and avoiding multiple loan inquiries within a short period. Regularly checking your credit report and addressing any errors can also help maintain a good credit score.
Using credit score for a home loan has a number of benefits for both borrowers and lenders alike. These advantages include the following:
Creditworthiness: The score gives lender a quick and standardised way to assess a borrower’s creditworthiness. A higher score indicates a lower credit risk, making it more likely for the borrower to repay the loan on time.
Streamlined process: By using CIBIL scores, lenders can expedite the loan approval process. They can quickly determine whether a borrower meets their credit criteria and make decisions accordingly.
Risk mitigation: Lenders can mitigate the risk of default by using CIBIL scores to evaluate borrowers. They can offer loans to individuals with higher credit scores, reducing the likelihood of
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