Buying a home is considered as a great accomplishment in any individual’s life. Nothing can beat the sheer ecstasy of owning your dream home. Once you put your heart on a home, the next step is deciding the budget. From figuring out the needed funds to designing the interior, owning a home requires constant planning and execution. But the majority of people cannot afford their dream home entirely using their hard-earned savings. In such decisive situations, home loans could be the right choice to fund the purchase. However, while applying for a loan, it is essential to check your CIBIL score. Having a good credit score is an important factor which decides the chance of your loan approval.
Why CIBIL Score matters?
In the modern era, most of the home purchases are made with the help of housing loans. But, the lenders usually source loan and credit card transaction details of the customers before approving. Most of the banks and financial institutions collect the data from credit information bureaus. TransUnion CIBIL Limited is one of the pioneers in the Information bureau field. Based on these transactions and payment history shared by banks, CIBIL software generates a credit score. While generating the score, importance is given to the consistent payment of your credit card dues and EMI’s on loan. This way, the banks can determine your ability to repay the loan in future. Credit score decides your probability of getting a loan. Usually, a score of 700 and above is considered good. Hence, maintaining a good credit score is crucial to get a home loan.
Why should you check the credit score?
Obtaining your credit report and score in advance is important to avoid any possible hurdles while buying a home. Getting the home loan at the earliest as per your budget requirements can be helpful for you. Even a small wrong adverse entry mistakenly made by the lender can affect your overall credit score. Sometimes, the EMI transaction for loan repayment might be missing from the report, or there will be some incorrect credit card transaction. Such mistakes can happen anytime. Check and correct those minute errors, if any, before the lenders collect your credit score from credit information bureau. This process may take some time to complete. Hence, inform the lender and information bureau about the errors and contact them frequently to avoid further confusions. Make sure that you collect the corrected credit card report before forwarding the loan application.
An annual check on your credit can help you maintain a consistent credit history. It will also help you take corrective steps at the earliest if any mistakes happen. Make sure your credit history is clean before applying for a housing loan.
