‘Good CIBIL score can fetch profitable home loan deals’

Buying a home is one of the most crucial decisions of anyone’s life. This involves thorough planning and research and the most important factor which influences your decision is your financial ability and the home loan. In a bid to get a good home loan deal, it is important to maintain your Credit Information Bureau (India) Limited (CIBIL) Score. Harshala Chandorkar, Sr VP- Consumer Relations, Communication & CIC Compliance, CIBIL, gives suggestions on how to maintain and improve your credit score to get the best home loan deals. She takes up queries on MagicBricks.com’s live chat forum – GuruTalk. The topic of the discussion was ‘How to improve CIBIL scores to get the best home loan deal’.

While discussing how important is the credit score, Chandorkar says, “Banks access credit reports and scores from CIBIL to evaluate the credit worthiness of borrowers. The report and the score has become an important tool which is used by all the banks and financial institutions.”

So how does it function? CIBIL collates credit information from all banks and financial institutions. They share information pertaining to all the loans and credit cards with CIBIL on a monthly basis. A Credit Report is a month-on-month record of an individual’s complete loan-related EMI (home loans, personal loans, automobile loans and so on), credit card or overdraft payments.

She observed that generally a CIBIL TransUnion Score of 750 and above is considered a good score. However, each bank has its own cut off score, says she.

So, what are the opportunities and challenges for a good credit rating? CIBIL does give a credit rating but computes a credit score based on the credit history of an individual. Chandorkar states that the credit score is calculated based on the following factors in your credit history:

- Credit Utilization: How much credit is this consumer using?
- Defaulting: How many accounts are past due – by how many days and by how much?
- Number of inquiries: Has this consumer applied for additional credit lines?
- Trade Attributes: How old are this consumer’s lines of credit? What type of credit does he have? For example, Does the consumer have a good mix of credit or is it all credit cards?

“Some of the benefits of a good credit history and good score are speedier access to credit objective decisions, negotiate for better credit terms, build reputational collateral for the future”, she says.


Source: MagicBricks.com Bureau