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Know How to Get a Home Loan even with a Low CIBIL Score

According to a survey conducted by Home Credit India in 2020, 68% of the borrowers did not know their CIBIL score and its importance. 

The credit score is a crucial metric that plays a major role in an individual’s housing loan application. Lenders may not even consider one’s application if the CIBIL score is low and reject it straight away. Maintaining a high credit score of 750 or above is one of the most important home loan eligibility criteria to avail a home loan and at lower rates of interest. 

However, the credit score is not the only eligibility parameter to avail a home loan. Customers with a low CIBIL score should be aware of the know-how to successfully avail the credits.

Measures to avail a home loan successfully with a low credit score

An applicant’s credit score is calculated based on specified weightage given to a few set parameters – 35% accounts for repayment history, 30% for credit utilisation, 15% for loan tenor, 10% for credit mix availed, and 10% for the number of credit enquiry sought. 

For example, if an applicant’s total credit score is 800 points, then he/she scores 280 points on his total repayment history, 240 on credit is utilisation, 120 on the overall loan tenor, 80 on a healthy mix of secured and unsecured loans and 80 based on the number of times he/she searched for a loan. 

A low credit score indicates that a customer did not meet the specified parameters as required. In case, you need a loan with a low CIBIL score, you can follow the below-mentioned strategies:

Strategy 1: Clear outstanding debts

Borrowers must try clearing their previous debts. For instance, if an individual has a number of loans running simultaneously, clearing off these debts will increase his/her credibility as a borrower and positively impact the credit score. Paying off credit card bills, utility bills, or EMIs timely can help applicants improve their CIBIL score as late payments are considered a negative trait by lenders. 

Settling previous debts on time also lowers the applicant’s FOIR, which is one of the primary home loan eligibility criteria considered by lenders.

Strategy 2: Opt for joint home loan

Customers with a low credit score can apply for a joint home loan. For example, applicants can add working spouses with a regular source of income and a good credit score as a co-applicant to get faster loan approval. This will also make him/her eligible for a lower rate of interest and also improve his/her home loan eligibility criteria despite low/poor credit score. 

Strategy 3: Consider availing a home loan from any previous lender

Maintaining a good relationship with previous lenders come in handy in such times. Customers holding a savings/current account or any ongoing plan with an existing lender can secure a home loan from such lenders as they are aware of the applicant’s financial history. Such lenders might approve the loan without considering the ideal CIBIL score for home loan

In such situations, borrowers must also look for pre-approved offers available. These offers are available on a host of financial products, including home loans, loans against properties, etc. To check your pre-approved offer, you need to provide details like name and contact number online. 

Strategy 4: Improve credit score and then apply

There are a few ways through which borrowers can improve their credit score before applying for the credits. These are – 

  • Repaying debts timely
  • Opting for credits with a longer tenor
  • Limiting applying for credits
  • Availing a balance mix of loan types

Individuals must keep track of their credit score by checking once every month before applying for a home loan to ensure where their current score stands. Customers can use a home loan eligibility calculator available online to check the same and apply for a suitable advance accordingly. 

While it is important to meet home loan criteria to successfully avail a home loan, the above-mentioned measures shall help you qualify for a housing loan at competitive rates even with low CIBIL score. 




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