It is comprehended that having a good score is essential. To ensure a good score, you would need to first understand a credit score.
For many people, credit scores can be confusing to understand. If you need a home loan, the credit score plays a crucial role when purchasing a home. And you would only be able to get a home loan with good interest, and the amount you want depends on your credit score. As a result, it is important to occasionally have a free CIBIL score check.
What is a Credit Score?
A credit score is provided to credit card holders in India by the Credit Bureau TransUnion CIBIL. It results in a CIBIL score authorised by the Reserve Bank of India to have a credit record of every citizen of India. The CIBIL score is immensely useful and significant when you need a loan from any financial institution. Banks analyse your credit score before giving you a loan.
If you need a home loan, then it is necessary for you to check your CIBIL score, either from the CIBIL score app or through any other means. Depending on your credit score, the bank would either provide you the full loan amount with good interest or something less. Simply put, your credit score displays your creditworthiness to financial institutions.
What does a Credit Score Range mean?
Generally, your credit score lies between 300 to 900. The higher credit score that anybody can achieve is 900. But after having your free CIBIL score check, if you have anything above 750, that is considered an excellent credit score for getting a home loan. It would give you good negotiation power and help you get your home loan easily. At the same time, you would also get a competitive interest rate for your home loan and adequate finances for getting your own home.
Even if you do not need a home loan, your CIBIL score gets considered with any loan. If you score between 650 and 749, banks and financial institutions will offer you a loan after checking your other financial details. But generally, for a home loan, a score above 650 is considered adequate. It makes it imperative for you to have a free CIBIL score check.
On the other hand, if you have a score below 649 but above 550, then your CIBIL score is average and needs to be improved. Any score that belongs to the bracket below 549 to 300 is considered bad. However, you do not have a credit history if you have a NA or NH.
How much Credit Score is needed for a Home Loan?
For a home loan, the best credit score that you can have is 750 and above. But if you have a score below it but still 650, then it is still good and adequate for most banks and financial institutions. However, for the most part, it can vary from bank to bank.
Hence, if you have a high credit score, you have a better chance of getting your loan approved on better terms. Thus, it is best to have a high credit score when taking any loan. If you have a low credit score after checking the CIBIL score app, you can take many measures to improve it before applying for a loan.
In short, the CIBIL score decides whether you get your home loan, and if you have a high credit score, then the loan terms could be favourable. But, if you do not have an adequate credit score, you can still get a home loan, depending on the interest rate and the other terms you get. Once you have your free CIBIL score check you can look for which lender provides you with the home loan at your CIBIL score.