For most property buyers, a loan is their biggest facilitator. It is the means to get an apartment in a townships project in Mumbai or plots in Khandala for a vacation villa. All financial institutions need security from an applicant which they assess through their credit scores. Sadly, a lot of applicants get rejected because of low credibility. CIBIL scores, which determine credibility, are thus crucial and need to be worked upon by every property buyer. Here's a quick guide on how you can improve your CIBIL scores and enhance credibility:
1. Pay your Credit Card bills: Your credit card plays a crucial role in your CIBIL score. It helps the bank get an idea of how good you are at paying back. That is why it is essential that you keep your credit card debt timely and sorted. Avoid outstanding credit and clear for a minimum of six months to boost your CIBIL score.
2. Minimal use of credit cards: Avoid using your credit card as much as you can. If you have more than one credit card, make sure you use the oldest card. Follow the 30% rule wherein you never exceed 30% of your credit limit. Using this rule will help you build an organized credit history and add credibility.
3. Pay off pending loans: When you apply for a home loan, the lender will go through your financial history to deem you fit as a borrower. If you have any pending loans, make sure your EMI payments are timely. You will also have to work with your lender to restructure and accommodate your existing loan and the loan you've applied for. Also, do not settle your loans with credit cards as it reflects negatively on your credit score.
4. Plan: Make a thorough plan before applying for a loan. Start working towards bettering your credit score 6 months before applying for a loan. Working on your credit score by getting your credit and debt in order will not only boost your credit score but also add financial credibility to your loan application.
Follow the above-mentioned advice and strengthen your CIBIL score. It will get you one step closer to your dream home.