Financial institutions lay down standard requirements that an individual would need to meet to apply for secured funding options like home loans. While this eliminates from its purview the inclusion of CIBIL score, you must know why and how to check CIBIL score when applying for funding. It is because even though credit score is not a mandatory requirement, it bears significant weightage as to your financing availability, your home loan interest rate determination, and several other terms on loan.
Below given are some reasons why you should check your credit score when applying for a home loan:
It allows the lender to gauge your financial discipline through credit history reflected through the score.
A high score allows you to negotiate for better rates on loans. You can also negotiate with the lender for other favourable terms on the advances, such as repayment flexibility.
Holding a credit score lower than 750 can lead to rejection of your loan application as it indicates aberrations in one’s credit profile with likely defaults or delays in repayments or imbalanced loan/credit card management.
Note that all types of credit can impact the CIBIL score and thus are great tools to use when seeking to build your credit score.
When at it, you must also learn how to apply for home loan so you do not encounter challenges when undergoing loan processing. Provide all necessary documents to make the application process hassle-free.
