How Much Credit Score is Needed to Apply for a Home Loan?
Everyone dreams of a nice, big house which they can call their home. Bank loans provide an easy solution for arranging the vast amount of money needed to buy a house in the form of a Home Loan. However, there is a credit score needed for Home Loan and a CIBIL score for Home Loan which is the evidence of credit worthiness of the person desiring Home Loans.
Credit Score is Needed to Apply for a Home Loan
A credit score is a number based on a level analysis of a person’s credit files, to represent the credit worthiness of the person. A credit score is primarily based on a credit report information typically sourced from credit bureau. Credit score is bought using CIBIL score. Read this post to know more about Credit Scores
The credit score which will be accepted by the lender depends on many determinants. These factors may include buyer’s payment history, salary history, current wage, available credit, the scores other lenders are accepting and the current economic environment. Cornett Communications advises that even in tight economic times, a score of 650 will get you a Home Loan and 700 is a good credit score to buy a house. The minimum score which one must have also differs based on many conditions.
What Your Score Gets You
The better your credit score, the better your interest rate on Home Loan is likely to be as credit score determines the interest rate. For a score which is between 620 and 639, getting a Home Loan might be considered risky by some creditors. If one’s score is high, i.e., more than 750, one might get a loan on interest of around 4 percent while it might be as high as 6 percent if the credit score is below 640. A two percent increase means a lot in terms of such high payments as housing loan and having a high credit score might save you this trouble of paying back such high amounts.
Improving one’s Credit Score
If your credit score doesn’t allow you to get a Home Loan at present, you can improve your scores, which is updated on a monthly basis. Read this post How to improve credit score.