With prices of property on the rise, it is fast becoming next to impossible to buy your dream house out of your pocket—which is where the several financial institutions come in to save the day.

With the help of various home loan options available at hand, any prospective property buyer may now be able to fulfil his or her dream of owning a home that is well and truly, their own. Here is what you need to be doing to make sure that your application for the home loan is accepted the first time around.

What Is A Credit Score?

Credit score—or CIBIL score—is a three-digit number—with 300 being the lowest value it can take, and 900 the highest value—that is an indicator of a person’s creditworthiness. Now, creditworthiness in financial terms means how trustworthy and/or regular a person is, in terms of paying their dues

While applying for home loans (where the loan amount generally tends to begin from a whopping 16-17 lakh rupees), it becomes all the more crucial to convince the bank and the loan officer of your intentions of paying back the money you are borrowing from the bank. Generally, a CIBIL score of 700 or above qualifies you to apply for a home loan, and the closer your credit score is to the maximum, more are the chances of your application being approved.

How Do Lenders Utilise The Credit Score?

CIBIL maintains an entire database of all credit-related activity of all its customers, which is used to calculate their respective credit scores.

• Having a credit score of 700 or above ensures the bank that you have a history of timely payment, and getting approval for a home loan application further helps increase your credit score.
• Higher credit score presents you as a minimum risk investment for the bank, and it is more likely that you receive your loan on better and more attractive terms than usual.

How To Ensure A Higher Credit Score?

The credit score helps the loan officer make the final decision on whether to accept or reject your application. Other tips and tricks one needs to bear in mind while aiming for that above average credit score are given as follows:

• Keep track of your payment history, and be on time with all the payments—credit card bills, utility bills and so on—to ensure that nothing comes in the way of you and that 700 or above credit score you are aiming for.
• It is always a better idea to get rid of accounts that you do not use on the regular. This is because the bank also takes into account the total credit limit at your disposal while deciding your loan amount.
• Be sure to file for home loans at an interval of a couple of months, as applying for home loans close together signals the financial institutions that you are in desperate need of money, which may work against you.

LSI Keyword: credit score, applying home loans, home loans, credit report

With prices of property on the rise, it is fast becoming next to impossible to buy your dream house out of your pocket—which is where the several financial institutions come in to save the day.

With the help of various home loan options available at hand, any prospective property buyer may now be able to fulfil his or her dream of owning a home that is well and truly, their own. Here is what you need to be doing to make sure that your application for the home loan is accepted the first time around.

What Is A Credit Score?

Credit score—or CIBIL score—is a three-digit number—with 300 being the lowest value it can take, and 900 the highest value—that is an indicator of a person’s creditworthiness. Now, creditworthiness in financial terms means how trustworthy and/or regular a person is, in terms of paying their dues

While applying for home loans (where the loan amount generally tends to begin from a whopping 16-17 lakh rupees), it becomes all the more crucial to convince the bank and the loan officer of your intentions of paying back the money you are borrowing from the bank. Generally, a CIBIL score of 700 or above qualifies you to apply for a home loan, and the closer your credit score is to the maximum, more are the chances of your application being approved.

How Do Lenders Utilise The Credit Score?

CIBIL maintains an entire database of all credit-related activity of all its customers, which is used to calculate their respective credit scores.

• Having a credit score of 700 or above ensures the bank that you have a history of timely payment, and getting approval for a home loan application further helps increase your credit score.
• Higher credit score presents you as a minimum risk investment for the bank, and it is more likely that you receive your loan on better and more attractive terms than usual.

How To Ensure A Higher Credit Score?

The credit score helps the loan officer make the final decision on whether to accept or reject your application. Other tips and tricks one needs to bear in mind while aiming for that above average credit score are given as follows:

• Keep track of your payment history, and be on time with all the payments—credit card bills, utility bills and so on—to ensure that nothing comes in the way of you and that 700 or above credit score you are aiming for.
• It is always a better idea to get rid of accounts that you do not use on the regular. This is because the bank also takes into account the total credit limit at your disposal while deciding your loan amount.
• Be sure to file for home loans at an interval of a couple of months, as applying for home loans close together signals the financial institutions that you are in desperate need of money, which may work against you.

LSI Keyword: credit score, applying home loans, home loans, credit report

Credit score of an individual is a single numeral that indicates the creditworthiness of that person. Creditworthiness refers to the credibility of that individual to fend debts like loans, mortgages, housing loans, etc.

A credit score is equivalent to your financial reputability

Undoubtedly, the credit score is a numeric representative of your financial health and integrity.

Better credit scores will help you get the status of mortgage pre-approval faster; you can obtain loans and credits easily, you may not be subjected to any extensive procedure of getting pre-approved in case you want to apply for new loans in the future.

Thus one must always strive to get a credit score above 700.

Your credit score can prove to be a godsend while procuring a home loan

Imagine moving to a different city or state and going through the hassle of applying for your first mortgage, because evidently if you are moving to a tier 1 cosmopolitan city, borrowing a housing loan is unavoidable if you belong to the mid-income class.

Thus, with an impressive credit score, you can streamline the inconveniences of setting up a new account and security deposit and many more processes.

Below are few perks of owning a first-rate credit score.

Lower interest rates

One of the biggest rewards a good credit score can fetch you is lower interest on home loans. It makes you look reliable.

Your lender may not impose heavy interest rates as he gets a positive image that you cannot make any defaults in redeeming the credit. An unblemished credit history lowers your credit risk.

Thus a positive credit score means a low monthly instalment which means you save money.

Hassle free documentation process

One more advantage of having a good credit score is that you can qualify for a loan without documenting your assets, income and background in detail.

You can earn the ‘go-stated’ status which implies that you need not provide your pay slips for procuring the loan. You just have to disclose the last two years’ income.

If you qualify for a no-ratio loan with your credit score, you can disclose your income without pay stubs, bank statements or tax returns.

You can also get qualified for a no-income-no-asset loan which means you only have to disclose your name, social security number, the amount of down payment and address of the property you are going to purchase.

Although, fewer documents means higher risk for the lender. Thus, he may impose a higher rate of interest.

Freedom to shop

Since you will qualify for loans easily with your good credit score, you can shop around for lenders. You get the liberty to choose the lender which suitably fits your financial objectives and budget.

 Avail higher amounts

Your ability to repay the loan is judged by your income, assets and your credit score. A bad credit score will lead the bankers or lenders to give you approval for a lower amount.

But a commendable credit score can help fetch you higher amounts which can serve your purpose satisfactorily.

LSI Keywords: how to get my credit score above 700, mortgage pre-approval