How important is CIBIL score for a loan? No matter whom you ask in the banking arena, the answer will be ‘very’. There may be other loans where CIBIL score is given a bit less importance and the bank offers loan to people with a low score to grab business. However, this is not true for home loan as home loan is only given to people having a good score. This ensures that the borrower will be able to pay the amount in time and he can be trusted. Home loans run for a long period of time and in such a scenario, this is quite important. The same is applicable for SBI.
What is CIBIL score?
A CIBIL score is one of the most popular credit scores which summarize your credit history. It is a three digit number that represents your credit record, either good or bad. It is derived by looking at the credit history of the individual during a certain time period. The score ranges from 300 to 900, 300 being worst and 900 being best. A score above 700 is considered a good credit score by most of the banks and financial institutions.
CIBIL score for SBI Home Loan
It is very obvious that you must have a good CIBIL score in order to take a home loan from SBI. This is applicable for home loan too since that is a much bigger amount compared to other loans. SBI is quite strict when it comes to CIBIL score of the customer as they want to be sure of their repayment capacity. A good credit score according to them is 750. So, if your credit score is more than 750, you have high chance of getting a loan if other criteria are satisfied.
What to do if your credit score is low?
If your credit score is low, it is possible that most of the banks will refuse your loan even if you have high income. However, it is not absolutely impossible to increase the score but you may need to wait for six months. A bad credit score means, you have failed to pay installment of your loan. The loan may be of any kind, it can be a personal loan, education loan or credit card dues. Make sure to pay the installments regularly for the next six months without missing a single payment and your score will definitely improve over the time. It is mandatory to wait for six months because that much time is required for the score to improve.
If you have recently taken a loan or missed payment on your credit card, you shall not go for the purchase of home on loan because it is possible that your application will be rejected. You can check your CIBIL score online from the authorized website. You can check it for free once and will have to pay for yearly subscription if you want to keep on checking.
Home loan is a very important decision for anyone as the loan repayments will continue for a long period of time. Gone are those times when people used to wait till retirement in order to purchase a home. These days’ people purchase it at an early age so that they can enjoy the comfort for a longer period of time. However, it is important for the banks as well to know that you will be paying the amount in time.It is thus quite important to have your CIBIL score checked before you apply. This will prevent you against loan rejection.