A CIBIL score is a numerical summary consisting of three digits ranging between 300 to 900, which assesses your creditworthiness. The CIBIL score is authorised by the Credit Information Bureau (India) Limited, a body licensed by the Reserve Bank of India.
The CIBIL score for a Home Loan is one of the first things any lender checks when they receive an application. It provides an accurate insight into an individual’s credit and repayment history and highlights their creditworthiness.
The credit score necessary for Home Loan approval varies depending on the lender. Generally, lenders look for applicants with a credit score of 750 or above. A higher CIBIL score enhances your eligibility for the lender's most favourable Home Loan terms. Refer to the table below for a breakdown of credit scores and what they imply to lenders:
| CIBIL Score | What it Implies to the Lender |
|---|---|
| 800 - 900 | Falls within an excellent range, indicating consistent EMI and credit bill payments without defaults |
| 750 - 800 | Considered very good, enabling negotiation for lower interest rates on loans |
| 625 – 750 | Represents a decent credit history with minimal irregularities, though loans may come with slightly higher rates |
| 300 – 625 | Reflects frequent defaults and irregularities, making loan approvals challenging without score improvement |
The higher your CIBIL Score is, the better are your chances of being approved for a sizeable loan amount with a lower Home Loan interest rate.
If you are planning to take a Home Loan, we recommend that you check your CIBIL score and employ the means to enhance it, if it is below the lender’s eligibility criteria. This could mean clearing off existing debts and ensuring that your information on the CIBIL website is updated. It not only enhances the quality of your application but also minimises the chances of your application being rejected.
Bajaj Housing Finance offers competitive terms to applicants who hold strong credit profiles with CIBIL scores over 750. Applicants with a CIBIL score of at least 750 have a better chance of being approved for a Home Loan with interest rates as low as 8.50%* p.a. (salaried applicants).
The purpose of a CIBIL Score is to give a consolidated summary of your financial health to interested parties, and in the case of a Home Loan approval – it is essential for a lender to determine the terms they may offer you.
To enhance the chances of your Home Loan approval, you can also check your credit score eligibility beforehand with our Home Loan Eligibility Calculator. With a good CIBIL score, you stand the chance of securing the most competitive housing loan interest rate.
There is no way to calculate your CIBIL score on your own, and individuals must rely on the credit agency for their score. The agency considers the following factors while giving you a CIBIL score:
- Your part repayment history
- Your credit utilisation habits
- Your income to expenditure ratio
- Your outstanding debt obligations
- Your credit exposure
To check your CIBIL Score online, you can enter your details on the official CIBIL website and benefit from the free annual report that the agency offers everybody.
Also Read: How to Check Your CIBIL Score for Free
Listing below several ways in which existing or potential Home Loan borrowers can improve their CIBIL score to bag the best deals or make the most out of credit.
Timely Repayment of Credit Dues
Never miss your EMIs or delay your payments. If you have missed payments in the past, you can set monthly reminders so that you do not miss them again.
Limit your Credit Utilisation Ratio
Increasing your credit card limit will automatically improve your credit utilisation ratio provided your spending is constant and does not increase in proportion to the limit. In order to increase your limit, you may have to request your Bank. Lower utilisation of credit for long periods will show that you are capable of handling extra credit thus making it easier for you to get Home Loan approval.
Have an Assortment of Credits
Having a healthy mix of secured and unsecured loans will portray you as a versatile credit user who understands various types of credit. Having too many unsecured loans can negatively impact your CIBIL score.
Check your Credit Report Frequently
While this action may not directly impact your credit score and improve it, it could act as a guide to understand where you stand and give you a push in the direction to take the right steps for improvement. Also, checking your credit report frequently lets you identify any errors present on it and get them rectified in time.
*Terms and conditions apply.
CIBIL Score for Housing Loan - FAQs
While it is possible to get a Home Loan with a low credit score, it may come with some challenges. Lenders may require you to pay a higher interest rate or provide additional collateral to secure the loan. You may also have a lower loan amount eligibility, or the loan may be subject to stricter terms and conditions
It is not impossible to get a Home Loan even if you are a CIBIL defaulter. Some lenders may still consider your application if you can provide sufficient proof of your ability to repay the loan, such as a steady income, employment stability, and collateral.
In such cases, you may be required to pay a higher interest rate or a higher down payment, and the loan amount may also be lower compared to what you could have received with a good credit score.
While it is possible to get a Home Loan with a score of 600, you may face a higher interest rate, and the loan amount may be lower than what you could have received with a higher credit score.
Yes, a CIBIL score above 750 is a good score.
Yes, your CIBIL score does matter while applying for a Home Loan. Your credit score is a measure of your creditworthiness, and lenders use it to evaluate the risk of lending you money.
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