How Does Cibil Data Affect The Home Loan Eligibility

While borrowing home loans you are beset with a number of concerns like interest rates, repayment clauses, your ability to repay your loan on time etc. Similarly while lending out these loans even the financial institutions and small lenders have several worries to combat. So just as there are certain benefits like tax relief and attractive rates meant for consumers, there are certain measures to protect the interests of lenders as well on Credit Information Bureau India Limited or CIBIL report is one such measure which helps lenders to gauge your prospects as a borrower.

What is a CIBIL Score?

The Credit Information Bureau of India maintains a database of the CIBIL scores of all the borrowers in India and the banks always consult the CIBIL scores before lending loans. These are the scores which are given to you based on your credit history. Say for example, the scores usually range from 100-999. If you have a score of say 100 as a borrower then the banks will reject your next application for a loan outright. On the other hand if you have managed to score an impressive 800 or above you might be rewarded with certain benefits while availing the loans.

Needless to say here, that your credit history is nothing but the repayment record of your previous loan/loans. The more you had defaulted the less your scores will be and vice versa.

Credit Information Bureau of India- How does it work?

The Credit Information Bureau of India is able to provide the database of the credit history of the home loan borrowers only because of its clients. Around 500 banks and financial institutions are CIBIL’s clients and these banks report each year to CIBIL about their customer behavior while repaying home loans.

For example, if you have taken a home loan from HDFC. You prove to be a seriously callous borrower when the time of repayment comes—you don’t pay your EMIs on time, you default two three months etc. HDFC will report this to the Credit Information Bureau of India. Thus you are already marked as someone who has a bad credit history. The next time if you try for a home loan in some other bank, it will consult your credit history from CIBIL and act likewise. Even your good behavior like timely payments, zero defaults etc are reported.

How can you improve your home loan eligibility with CIBIL?

Other than those mentioned above there are certain factors which impact a CIBIL report.

Length of credit History: If you had a long term loan and you had proved to be a good borrower for a longer period of time, your credit scores will be better.

Search for Credit: If you have frequently browsed sites of several banks providing these loans without really needing it, it can harm your scores. More searches imply more desperation for loans, so it’s advisable not to resort to these frequent searches.

Try to work on these and improve your CIBIL scores as they indeed are going to influence your home loan eligibility in the long run!

As a rule when buying a vehicle, a borrower will explicitly apply for a vehicle credit; nonetheless, a buyer can likewise utilize an individual advance (an advance acquired by a person to use at their caution) for a similar reason. All vehicle credits are for explicit time allotments, anyplace somewhere in the range of 24 and 60 months, albeit some vehicle advances can be for longer periods. This kind of credit is otherwise called financing.