A good credit score or CIBIL score is one of the most important prerequisites for having your home loan application approved. One of the first things that a bank or lending company will check when you apply for a home loan is your credit score. Your credit score is a number that ranges from 300 to 900, and is assigned to you based on your payment patterns and credit history. A high score (700 and above) indicates that you repay your debts on time and are an eligible candidate for the loan. A low score, on the other hand, will hinder the chances of having the loan approved.
Here are 5 ways in which you can boost your credit score:
1. Keep a tab on your credit report: It’s a good idea to routinely check your credit report to assess the areas where you need to improve. In case there are any defaults or delayed payments, you can have them rectified by contacting your bank.
2. Pay your EMIs on time: Paying your loan installments on time is necessary to maintain a good credit score. If you are consistently delaying the payment of your EMIs because they are disturbing your monthly budget, you can consider talking to your bank to change the EMI amount to a smaller one.
3. Pay your credit card bills on time: The way in which you use your credit card has a direct and significant impact on your CIBIL score. It is a good practice to avoid exhausting your entire credit limit every month, and to pay your entire bill amount on or before the due date.
4. Avoid taking too many unsecured loans: Signing up for too many unsecured loans like personal loans and credit cards can work against your credit score. On the other hand, secured loans like a car loan and home loan increase your credibility as a borrower.
5. Monitor your co-applicant’s debts: In case you have applied for a joint home loan, the payment patterns of your co-applicant can affect your credit score. If you find that your co-applicant is defaulting in some way, you may want to point it out to them for mutual benefit.