Apply for Joint Home Loan for Higher Eligibility
Purchasing a home is a one-time investment which requires sound financial planning. While home loan is…Read More
It goes without saying that every lender or bank will always have different conditions and parameters according to which they will decide whether or not to issue a loan to a particular borrower. This is why RBI has advised every bank to check a borrower’s Credit Score before granting them a loan.
Essentially what a Credit Score does is that it keeps tabs on any and every past repayment of loans and credit card credits. This is something all credit givers and loaners look at. However buying a house with bad credit could definitely be difficult.
The minimum credit score for a home loan varies from agency to agency. An ideal credit score should be above 600 and a score above 750 is considered to be good.
Here are some proven ways to improve your Credit Score to make the loan taking process smoother:
Remember to get done with all those credit card balances and in the future, always spend only as much as you will be able to repay in time. However, this is merely not applicable to credit card bills. Ensure that your previous loans are paid and cleared. Any such unpaid dues will reflect badly on your Credit Score. So do make sure that such dues are cleared in time.
If there is a particular credit card that you are not using and you decide to close it, then you should re-think again. This could very well impact your Credit Score in a negative manner. You see, if you have a credit card account that has a record of you having paid all the dues in time and having managed well, then that there itself is brilliant boon. This will help provide longevity to your overall Credit Score.
There is particular credit card utilisation ratio that will help you improve your Credit Score. Using the credit card anywhere will not help with this cause. Keeping the credit utilization score less than 30% will help. Remember to maintain low balances on a monthly basis in your account. This will reflect in a very healthy manner on your Credit Score.
In case you have a co-signed account or joint accounts, remember to keep tabs on them on a monthly basis. If there has been a missed payment on the part of your co-signed, then you are also held responsible for the same. This will always reflect badly on your Credit Score.
Keeping these pointers in mind and adhering to them could go a long way in ensuring that you are able to maintain a healthy and high Credit Score which will in turn help you get that loan sanctioned easily.