A home loan is a significant financial commitment, and lenders carefully evaluate an applicant’s creditworthiness before approving a loan. One of the primary factors they consider is the CIBIL score. This three-digit number, ranging from 300 to 900, reflects your credit history and repayment behaviour. A higher score increases your chances of loan approval and better interest rates.
Before applying for a home loan, it is crucial to check your CIBIL score to understand your financial standing. This guide explains the steps to check your CIBIL score for housing purpose, its importance in the loan process, and tips to improve it if needed.
What is a CIBIL Score?
A CIBIL score is a numerical summary of an individual’s credit history, compiled by TransUnion CIBIL, a leading credit information bureau in India. This score is based on factors like repayment history, credit mix, outstanding debts, and credit inquiries.
CIBIL Score Range and Its Meaning
Typically, the CIBIL score is categorised in the following ranges to reflect your creditworthiness and repayment capabilities:
- 900 – 750: Excellent – Strong approval chances with competitive interest rates
- 700 – 749: Very Good – High likelihood of approval with relatively low interest rates
- 650 – 699: Good – Decent approval chances, but terms may vary
- 550 – 649: Fair – Moderate approval probability with increased interest rates
- 300 – 549: Poor – Low likelihood of approval and higher chances of rejectionMost lenders prefer a CIBIL score of 750 or above for home loan approvals.
Why Should You Check Your CIBIL Score Before Applying for a Home Loan?
Know Your Eligibility
Lenders use the CIBIL score to assess risk. Checking it beforehand helps you determine if you meet their requirements.
Avoid Loan Rejection
Multiple rejections can further lower your score. Checking it early allows you to address any issues before applying.
Negotiate Better Terms
A high CIBIL score gives you leverage to negotiate lower interest rates and better loan terms.
Correct Errors in Your Credit Report
Sometimes, errors in the report can impact your CIBIL score for a housing loan. Checking it beforehand allows you to rectify them before applying for a loan.
Plan for Score Improvement
If your score is low, you can take steps to improve it, increasing your chances of approval.
How to Check Your CIBIL Score?
There are multiple ways to check your CIBIL score, including through the official TransUnion CIBIL website and financial platforms that provide free credit score checks.
Method 1: Checking CIBIL Score on the Official Website
The CIBIL website allows individuals to check their score by following these steps:
- Visit the official TransUnion CIBIL website – cibil.com
- Sign up for a new account if required, or log in if you already have one. Click on ‘Get Free CIBIL Score & Report’ on the homepage
- Fill in the required details, including your name, date of birth, and contact information
- From the ID Type dropdown menu, select ‘Income Tax ID Number (PAN)’
- Review the undertaking at the bottom of the form, then click ‘Accept and Continue’
Method 2: Checking CIBIL Score Through Financial Marketplaces
Many banks and financial marketplaces offer free CIBIL score checks. For example, on Bajaj Markets you can check your credit score by following the simple process provided below:
Click on ‘Get Your Score’
- Provide personal details, including name, mobile number, date of birth, e-mail ID, PAN, and residential pincode
- Choose your employment type from the available options
- Accept the terms and conditions
- Click on ‘Get Report’
- Enter the OTP received on your registered mobile number and click ‘Submit’
- Once your details are verified, your CIBIL score will be displayed
How Often Should You Check Your CIBIL Score?
- At least 3-6 months before applying for a home loan to give yourself time to improve the score, if needed
- Regularly (every few months) to monitor your financial health and identify discrepancies early
- Before taking any major loan to avoid unnecessary hard inquiries that might lower your score
What to Do if Your CIBIL Score is Low?
If your score is below 750, consider taking steps to improve it before applying for a home loan.
Pay Bills and EMIs on Time
Ensure all credit card bills and loan EMIs are paid on or before the due date. Set up auto-payments to avoid missing deadlines.
Reduce Credit Utilisation Ratio
Keep your credit utilisation below 30% of your total credit limit. Avoid maxing out credit cards frequently.
Avoid Multiple Loan Applications
Every loan application results in a hard inquiry, which lowers your score. Space out loan applications and apply only when necessary.
Clear Outstanding Debts
If you have overdue payments or unpaid loans, settle them immediately. Consider a debt consolidation loan if managing multiple debts is difficult.
Maintain a Healthy Credit Mix
A mix of secured (home, car) and unsecured (personal) loans builds a stronger credit profile. Avoid relying only on credit cards or personal loans.
Monitor Your Credit Report for Errors
Incorrect loan accounts, payment defaults, or duplicate accounts can negatively impact your score. Dispute any errors with TransUnion CIBIL and get them corrected.
Common Mistakes to Avoid When Checking CIBIL Score
- Using multiple free platforms repeatedly – Too many inquiries might flag risk
- Ignoring minor discrepancies – Even small errors can reduce your score
- Applying for a home loan without checking your score – Rejections affect future applications
- Closing old credit accounts – Older accounts add to your credit history and improve your score
- Not monitoring your credit score regularly – A sudden drop can affect loan eligibility
Checking your credit score before applying for a home loan helps you assess eligibility, avoid rejections, and negotiate better loan terms. A score of 750 or above improves your chances of approval with competitive interest rates. If your score is low, take proactive steps to improve it before applying.
Make it a habit to monitor your credit score regularly to maintain financial discipline. A good CIBIL score not only ensures home loan approval but also strengthens your overall financial credibility.
Also Read: Get a Home Loan from Bajaj Housing Finance Limited at 6.90 Percent
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