What is CIBIL score & is it possible to buy a home if your CIBIL score is low?

What is CIBIL score?

CIBIL or Credit Information Bureau India Limited was found by the Reserve Bank of India in August 2000, under the Credit Information Companies (Regulation) Act.

CIBIL is the first and the most trusted credit bureaus in India. A CIBIL is a three digit number which is calculated on the basis of the financial history of the applicant. It should range between 300 to 900 and people having higher score have better chances of getting loans approved. The closer your score is to 900, the stronger your credit profile.


Is it possible to buy a home in CIBIL score is low?

Just in case if you have a bad CIBIL score,  unfortunately, buying a home can be a challenge. You may receive a lot of loan denials and high-interest rates if approved for one. There are some loans, such as FHA loans, that are available to individuals with credit scores that are lower than what may be required for conventional financing. Your loan lender/bank can discuss specific options for which you may qualify.


How can you improve your CIBIL score?

To help you better your CIBIL score, take a look at some useful tactics that will help you improve it:

  • Set Reminders for Payment and Be Disciplined with Credit

Clean the Credit Card i.e. to repay outstanding dues is vital when it comes to improving your score. Plan your credit card spending in such a manner that you clear off your credit balances before the due date. Delays in payments not only force you to pay a penalty but also lower your credit score. So, if you find that this is something that you’re guilty of, make it a point to set reminders for payments so that you can tackle them on time.


  • Ensure You Maintain Older Credit Cards to Lengthen Credit History

If you have old credit cards, you should continue to maintain them as long as you are able to pay your bills in full and on time. Realistically, a good credit card account over a long period of time, that has been managed well with timely payments of outstanding, is a blessing in disguise. This will help you build a strong and healthy credit history, which in turn will help you increase and maintain a good credit score in the future.


  • Customise Your Credit Limit

Your credit utilisation ratio has a significant impact on your credit score. The more you are able to restrict your credit usage as per the allotted limit, the better it is for your credit score. Reaching the limit has the opposite effect as it lowers your credit score. One way of tackling this is to get in touch with your lender and customise your credit limit based on your expenses.


  • Inaccurate Appeals

In certain cases, CIBIL may make mistakes when it comes to updating your records. This will also bring down your score. An individual must make sure that any errors in your credit report are appealed by the individual on the CIBIL website (www.cibil.com). Appeal only if you have a valid point of disagreement. So, ensure that you check your CIBIL report from time to time. This will help you identify any errors and correct them on time which as a result, will improve your credit score.


To improve your CIBIL rating score, these are some habits that you can weave into your life to improve your credit score over time. Scoring high on the CIBIL score is an indicator of an individual's disciplined expense and repayment behaviour. After you have implemented them, it will take around 6 months to a year for your credit score to improve.


Home Buyer's Checklist - Kohinoor Group




The Ease of Purchasing Your Home at Sapphire

Purchasing your home at Kohinoor Sapphire in Tathawade is a hassle-free and easy process because the team at Kohinoor will be ...

5 Reasons To Choose Your First Home At Kohinoor Sapphire

Tathawade is a fast up-and-coming residential area in the western region of Pune. Owing to its close proximity to Hinjawadi IT ...

Co-applicant - the Fastest way to enhance your Loan Eligibility

When it comes to being a co-applicant, your spouse or parents, are usually the ones. And any financial institution won’t allow ...