How Does CIBIL Scores Help In Mortgage Loans?



A CIBIL Score That Is Good Enough

CIBIL is one of the four credit information companies appointed by the Reserve Bank of India to manage and access credit information in India. Other companies being CRIF High Mark, Experian, and Equifax. CIBIL calculates the CIBIL score based on your credit report. A CIBIL score is a three digit number that ranges between 300 to 900. Lenders sanction loans based on your CIBIL score. A CIBIL score that is good enough to sanction a mortgage loan is 700 and above. A CIBIL score closer to 900 will help you avail loans easier. Higher credit scores will also attract several offers, including low interest rates, easy documentation process, longer repayment terms, and bigger loan amounts. High CIBIL scores will attract up to 80% of the total cost of property as mortgage loans.

CIBIL Scores And Mortgage Loans

CIBIL score is an important factor in the loan approval process. If you have applied for a mortgage loan and you want to avoid any hassles due to rejection, it is essential that you maintain a healthy CIBIL score. It is the first and foremost fact checked by any lender when you apply for loans. Applicants with low credit scores will be rejected. If you have a credit score above 700, the lender will look into other factors in the credit report that will affect your credit worthiness. The CIBIL score or the credit score will give an impression of the kind of borrower you were in your past. So, before making your next loan application, improve your CIBIL score. See to it that you make payments on time, have a mix of secure and unsecure loans and do not apply for too many loans. Always check your credit report and the credit score on a regular basis.

How Is Credit Score Used?

Credit score is most useful for lenders to check on the borrowers past lending history. A few years back lenders needed to go through rigorous internal assessments and background checks to find if a borrower is eligible for a loan. Now, with the help of credit score and credit report lenders will have access to accurate data on an applicants credit history. CIBIL has a database of credit information of around 600 million people in India. They calculate CIBIL scores based on the weightage given to every data in the credit report. A low credit score will categorize you as a high risk customer and a high score will be valued as a low risk customer.

Know More About : Personal Loans And Their Relation To CIBIL Score

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