pnb housing
April 11th, 2022

What is The Good CIBIL Score for Home Loan?

Blog Seprator

When you begin with a home loan process, you must have heard some terms on repeat. The terms such as CIBIL score for a home loan, minimum CIBIL score for a home loan, etc., keep on coming in the home loan process. So, what exactly is a good CIBIL score for a smooth and swift home loan approval?

In this article, we have noted everything about the CIBIL score needed for a home loan.

What is CIBIL Score?

CIBIL score is one of the most important factors a lender would consider while disbursing a home loan. Your CIBIL score will display your capability to repay any loan. Credit Bureau TransUnion CIBIL (Credit Information Bureau India Limited) maintains the credit scores of every individual depending on your credit history.

Ultimately, a Credit score of 800+ is considered the best CIBIL score for home loans.

What is the Ideal CIBIL Score for Home Loan?

Your lenders will gauge your CIBIL score before lending you money. For a home loan, finances can go up to lakhs, sometimes even in crores, for a long tenor. To keep the defaulters at bay, lenders will go the extra mile to check the borrower’s credit score.

The usual range of Credit scores lies between 300 to 900. However, for most lenders, the minimum CIBIL score for a home loan approval is 650 or above. While a CIBIL score of 800 is considered the best CIBIL score for a home loan, anything below 550 is regarded as a bad CIBIL score. If your Credit score ranges from 550 to 700, you can work upon it to match the expectations of your lenders.

Remember, your Credit score paints the picture of how credit-worthy you are. Having a good CIBIL score in your home loan application means:

  • You repay all EMIs and loans on time without defaulting
  • You maintain a good mix of credit
  • You keep your debts low
  • You do not request multiple loans and don’t get rejected in your applications

This is why your Credit score is extremely important in enabling you to get a home loan at good terms.

Must Read: Importance of CIBIL Score While Availing Home Loan and How to Improve CIBIL Score

Things to Consider While Applying for a Home Loan

  • First and foremost, you must obtain a Credit score before applying for a home loan. Knowing your credit score beforehand will ensure that your details like credit history and personal details are up to the mark, and this will help you avoid rejections. Additionally, knowing what is a good Credit score for a home loan will help you work towards improving yours before you apply.
  • If one bank rejects your loan application based on your Credit score, you must stop reapplying for a home loan with another bank. Your credit score gets declined further if you keep on applying for homes with different financial institutes.
  • You should not stretch your finances by not clearing your debts in the form of undue personal loans or high credit limits. Having such overdue debts will negatively reflect on your credit history. Banks will approve your home loan based on the debt-to-income ratio. Higher the ratio, the fewer chances of them approving your loan.

Steps to Obtain CIBIL Score Online

You can follow these simple steps to obtain your CIBIL score online:

  • To obtain your credit score for a home loan, you can visit PNB Housing’s credit report page or CIBIL website. 
  • To get the credit report, you must fill in a few details, including personal information such as  PAN Number, date of birth, address details etc.
  • After submitting the application form with the required documents, you will get the results immediately. 

How to Improve your Credit Score?

While 700 or above is considered a good Credit score for a home loan, you can still improve the Credit score below 700 by following these steps:

  • You must exercise to pay all the dues on time and without part payments as it will affect your credit score.
  • You must limit your credit card. Heavy credit utilization or any outstanding payment will affect your home loan eligibility.
  • You must keep checking the expenditure or overdue payments from your bank accounts.

Having not just a minimum credit score for a home loan but a good score will improve your chances of getting lower home loan interest rates, higher home loan sanctions, speedy home loan processing, and the opportunity for good negotiation. At PNB Housing, we offer relaxed CIBIL score criteria to all home loan applicants so that everyone can fulfil their dream of owning a house without any hiccups. 

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