Apply for Home Loan Easily with a Robust Credit Score
Your credit score is your credit worthiness or your value as a borrower when you approach a lender for a loan, based on the past track record of loan payments.
Based on your loan payment track, Credit Information Bureau (India) Limited (CIBIL) scores your worthiness, which in turn determines your reliability with the lenders. The CIBIL score card ranges on a scale of 300 (being the lowest) to 900 (being the highest).
The closer you are to the 900 score range, the healthier your score is. Generally, a score of 700-750 is considered a safe score for the banks to provide you with a loan. Anything lower than that puts you on the risk of being denied a loan.
In fact, currently, almost all the lenders look at your Credit Score to offer a Home Loan. If you have a good score, you can find the process of Home Loan smooth.
If not, then the banks will most likely reject your Home Loan application even after you have provided the documents required for Home Loan in proper order. Read on to know how these two important factors can improve your Credit Score significantly:
Organise the Documents Required for Home Loan
Though it might be the most obvious thing to do, it can be easy to forget the documents that can assist us in maintaining the track record for our expenses. These include shopping bills, credit card bills, identity proof, residential proof, bank statements etc.
Banks determine your spending as well as saving habits using these documents, especially if you are looking to borrow for purchasing a home, to determine whether or not you are eligible for a Home Loan now or in the future.
Properly maintaining the documents required for Home Loan can help in clarifying your credit score to any lenders that you approach.
Apply with a Co-applicant for Home Loan
It is important for your lender to have confidence in your credit score as well as your future capacity to pay off any loan amounts that would be due.
The first step that you can take as a borrower is to determine the EMI that you would be required to pay for a loan. For this, you can make use of a Home Loan EMI calculator.
Once you have arrived at a conclusive number, you can approach the lender or your bank for a Home Loan along with a co-applicant.
Adding co-applicants for higher loan eligibility is pretty common since having another person to take equal responsibility for the loan borrowed assures the lender that you will be paying off your loan on time.
A co-applicant in most cases is your spouse of someone who will be sharing the house with you as a family and both of your addresses would be same. This would ensure that the bank knows you are capable of paying your Home Loan since there are more people involved in the process.
If you are planning to apply for Home Loan now or in the future, make sure that your credit score is high, and any dues that you have are also paid off. Remember you also have the option to resort to Co-applicants for higher loan eligibility to ease the process of getting a Home Loan. Keep that in mind, since it is a lot easier to pay off your loan with two people than just yourself.