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It is after months of savings and years of aspiration that you finally decide to purchase your dream house. And if you are living in any of the metros or tier I cities in India, taking a house loan is unavoidable if you belong to the mid-income group.
This again entails a thousand odd processes and acute planning down to the finest detail. In the entire procedure, buying the house at the earliest remains your top priority.
But what will you do if your loan is rejected even after providing all the credentials and documents? It is only natural to get disappointed.
However, if you try to find out the actual reason of rejection of the loan, you might be surprise to know that it is due to your low credit score. To begin with, a credit score is basically a number that indicates the credit worthiness of any individual based on a thorough assessment of the individual’s credit history so far.
This credit score is collected and collated by credit bureaus – mainly Cibil and Equifax – and they in turn get hold of the information from data furnishers that might include creditors, lenders and utilities, debt collection agencies that a person has had a relationship or experience with.
Now that you are aware of what a credit score is, you should also know how it is intricately related to your day to day life and why it is important to maintain a healthy credit report card. Firstly, whenever you go to a bank or any other financial institution to apply for a loan or a credit card, they will first check with Cibil for your credit score.
If the Cibil credit report if satisfactory i.e. you have commendable credit points, only then will the bank approve your loan. Not only in the case of loans, but also while applying for a telephone connection, applying for jobs, insurance premia, rentals and a lot more.
Essentially, if you can boost of a healthy credit score – ranging in and around 700 to 900 points - chances are very good that you might end up saving thousands or even lakhs of rupees in the form of interest. This is mainly because banks provide succor by offering credit facilities at lower rates of interest.
The Cibil score also enables the bank to find out who actually qualifies for a loan and at what credit limits. In other words, by referring to the Cibil report, they can easily analysis which customers will prove instrumental in bringing in more revenue for the bank.
In line with being a credit conscious person, you should also keep in mind that your name does not feature in the defaulters lists.
If it does, then it is considered as a discouraging sign which will take dedicated effort to increase your points and bring your score to normal. Also, it is not necessary that timely repayment of loan is the only criteria to avoid being featured on the defaulters list; there are other issue too that come to play.
You can also get the online Cibil report by creating a cibil consumer login. They will ask you to pay a minimal amount of Rs. 470 which you can pay online through credit or debit card. And the good news is that there are credit health improvement companies that help you in growing your credit points to maximum.
Credit Sudhaar is a reliable institution that helps you remain credit healthy. They have credit specialists and certified counselors whose expertise lies in interpreting your credit report, identifying the issues with the report, comprehensive analysis and then organizing a step by step plan to improve your credit health.
Maintaining a healthy credit regime can only land you on a safer side besides earning you more money in your bank account. You can also up your credit score by avoiding too much loans and credit cards because mongering for them will give an impression that you are a credit hungry person for whom ‘more is less’.
Once you have recorded a satisfactory credit score, you are placed at a comfortable position to start making plans for purchasing your dream home. Make the most of this healthy state of finances and start looking forward to living in a new home and spread the word for a sound credit health.