Owning a house is a dream come true for everyone, and it brings with it a sense of identity, comfort, and happiness, But not everyone can afford to purchase a home due to the rising rates of property. So, relying on home loans is a better decision to own a house.

Lenders, first of all, tend to look into your payment capacity when you apply for home loan. Lenders consider your credit and CIBIL scores to determine your eligibility criteria. Credit Information Bureau India Limited (CIBIL) issues a 3-digit numeric summary that offers insight into a borrower’s credit repayment behavior.

How to improve CIBIL credit score?

Here are some guaranteed ways to improve your credit score and avail yourself of home loans.

  • Always pay your credit card bills and equated monthly installments on time to avoid defaults in repayment.
  • Maintain old debt on your credit report.
  • Always clear credit card balance by paying unpaid dues.
  • Avoid aggressive borrowing of money.
  • Ensure there are no mistakes with the CIBIL score report.
  • Avoid mistakes such as paying less than the agreed amount.
  • Opt for loans that have longer payment tenure.

Get a loan with a low CIBIL score

Some lenders offer loans to people whose CIBIL credit scores exceed 750 points. However, you can still apply for home loan even if you do not meet the said criteria.

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1.Provide concrete income evidence

Salary and income sources with good CIBIL credit scores are considered eligible for home loan, but some lenders still issue loans despite low CIBIL scores if borrowers show concrete evidence of an increase in salary, bonus, and other sources of income.

A hike in salary means that you are financially secured to pay the loan amount on time and are eligible to apply for home loan.

2.Consider applying for a joint home loan

You may have low CIBIL credit scores, but your spouse may have great credit scores. Lenders approve loans if one of the applicants has a good credit history. The best part is that you can get your loan approved faster than usual.

3.Apply for a low personal loan

With a low CIBIL credit score, lenders hesitate to disburse huge sums of money as credit. You are considered a risky customer if you have low credit scores and hence, your loan application denial by the lenders.

So, consider getting a credit against lower amounts and ensure on-time payment to gradually rebuild your credit score. Lenders can then trust your creditworthiness and approve your home loan.

4.Apply with lenders/banks that you have a better relationship with.

It is wiser to approach financial institutions that you have an existing positive relationship with. They are lenders whom you have paid on time before such as a bank with which you have an account and regularly depositing or an NBFC with whom you have a significant balance.

Wrap up

It is possible to get a home loan with low CIBIL scores by providing evidence of salary hike, applying for a joint home loan, low personal loan, and through lenders with whom you have existing relationships. Also, keep your research on how to improve CIBIL scores to avoid ruining any chance of getting home loans.

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