Minimum CIBIL Score For Home Loan In 2022

Home Loan

CIBIL score is one of the first criteria lenders check to process home loan application. CIBIL score or credit score is generated by the TransUnion CIBIL (Credit Information Bureau of India Limited). It’s a 3-digit summary of an individual’s credit history that ranges between 300 and 900. The higher the CIBIL score, the greater the chance of home loan approval. Ideally, lenders prefer applicants having a CIBIL score of 750 or above? But, what would be the minimum CIBIL score for home loan?

This post discusses the minimum score you need to get a home loan, the importance of CIBIL score and how to improve your CIBIL score. Read on!

What is the Importance of CIBIL Score for Home Loans?

CIBIL score plays an important role in determining whether an applicant’s loan application will be accepted or rejected. Since home loans are usually long-term advances usually with repayment tenures going up to 30 years, lenders will make every effort to know about your repayment capacity before approving a loan. A good CIBIL score makes you eligible for a high-value loan with lower interest rates. At times, if you have maintained an excellent credit history and CIBIL score for a long period of time, banks/NBFCs could offer you home loans at interest rates lower than the advertised rate.

What is the Minimum CIBIL Score for Home Loans?

A minimum CIBIL score of 700 to 750 is considered good for being eligible for a home loan and getting a home loan approved faster. Many financial institutions have set up 650 as the minimum CIBIL score for home loans, however, having a score of 750 or above is ideal for home loans, as it gives you the negotiating power to secure favourable terms. With a high credit score, you can also enjoy lower home loan interest rates (solely at the discretion of the lender) with up to 90% LTV (Loan-to-Value Ratio).

Lenders consider CIBIL score between 300 to 549 to be poor and usually reject a loan application of individuals falling under this bracket. Scores from 550 to 649 are average scores and can help get a loan approved if the applicant meets other eligibility criteria. But barely meeting the mark could mean negating favourable terms and conditions. Meaning you could still get a home loan but the interest rates could be much higher.

Also read: 11 Guaranteed Ways To Improve CIBIL Score 

How To Check Your CIBIL Score?

You can check your CIBIL score for home loans once a year for free or multiple times by paying a certain charge. Follow the given steps to check your credit score:

1. Visit the official website of TransUnion CIBIL
2. Click on ‘Get your CIBIL score’ on the top right corner of the screen.
3. Choose one of the given plans to subscribe to CIBIL. With a paid membership, you can constantly monitor your credit score, get daily updates and alerts and tailored loan offers. 
4. If you want to check your CIBIL score for a home loan for free, navigate to https://www.cibil.com/freecibilscore.
5. Click on ‘Get your free CIBIL score’ and then ‘No thanks’ when presented with the subscription plans.
6. Enter your email address, mobile number, name, and PIN code. Next, select an ID type for identity proof and enter the ID number. Click on ‘Accept and Continue’ to create a new account on CIBIL.
7. Enter other personal details like your address, date of birth, Aadhaar number and PAN.
8. Next, enter the OTP sent to your email or phone number. Afterwards, you will be asked to verify your loan account details, credit card information, etc.
9. Finally, you can get your CIBIL score and report.

Benefits of Maintaining a High CIBIL Score

Following are some benefits one can enjoy by maintaining a high CIBIL score: 

• Having a good CIBIL score for home loans translates to higher chances of loan approval. 
• Can help you get the best interest rates from the lender.
• You can get quick access to other credit products like personal loans, credit cards, etc. 
• Helps you negotiate with the lender for better terms and conditions (lower processing fee, maximum tenure, etc.
• Can help you get special offers and discounts on loans.

How to Improve CIBIL Score for Home Loans?

If you have a bad or average credit score, you can improve it to get your loan processed. Follow the given tips to improve your CIBIL score: 

• Make sure to pay your dues on time as lenders view late payments negatively.
• Not utilising all of your total available credits and maintaining a low credit utilisation ratio. 
• Seeking new credit in moderation also keeps your credit score from dropping.
• Regularly monitoring your CIBIL score and filing reports rectifying any errors.
• Maintaining a healthy mix of credit with both secured and unsecured finances. 
• Not making multiple loan applications with several lenders at the same time.
• Always repaying all debts in full.

Also read: Difference Between Credit Hard Inquiry And Soft Inquiry

Final Word

Financial institutions prefer applicants with high CIBIL scores for home loans as they carry low lending risks. With a high credit score, you can enjoy not only fast loan approval but also favourable loan terms. With lower interest rates, you can save substantially, while a longer tenure makes the repayment easier.

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FAQ’s on CIBIL Score for Home Loan

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Disclaimer: This article has been prepared on the basis of internal data, publicly available information and other sources believed to be reliable. The information contained in this article is for general purposes only and not a complete disclosure of every material fact. It should not be construed as investment advice to any party. The article does not warrant the completeness or accuracy of the information, and disclaims all liabilities, losses and damages arising out of the use of this information. Readers shall be fully liable/responsible for any decision taken on the basis of this article. 

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