CIBIL Score for Home Loan – How it Affects Your Application?

May 29th, 2023

CIBIL Score for Home Loan

Credit score works as an indicator of the creditworthiness of the borrower. Nowadays, most people depend on loans to buy homes. While taking a loan, the lender considers different factors such as income, age, credit score, employment, and more. Out of these factors, credit score plays an important role in the approval process. The CIBIL score for home loans is an important aspect to consider for any borrower.

What is CIBIL Score?

CIBIL stands for Credit Information Bureau (India) Limited, and the score is a 3-digit number that represents an individual’s creditworthiness. CIBIL is India’s first credit information company authorised by the Reserve Bank of India. It collects credit information from different financial institutions and creates credit reports for individuals, which contains details such as credit utilisation, credit history, repayment behaviors, and more. Based on this information, CIBIL calculates the credit score of an individual, which ranges between 300 & 900. Anything above 750 is considered a good CIBIL score for a home loan.

Factors Considered while Calculating CIBIL Score

  1. Credit Payment History:

    To maintain a good record of credit payment history, timely payment of credit card bills and loan EMIs play an important role. Any defaults, settled accounts, or late payments can have a negative impact on this score.

  2. Credit Utilisation

    It is calculated using the amount of credit utilised and the total available credit limit. Maintaining a lower credit utilisation ratio indicates responsible credit management.

  3. Duration of Credit History

    Longer credit history demonstrates more experience of borrowers in managing credit successfully, which has a positive impact on the score.

  4. Credit Mix:

    Having a mix of different types of credit, such as credit cards and loans, can impact the score positively.

  5. Recent Credit Activity

    Applying for multiple loans and opening multiple credit accounts in a smaller period of time may indicate financial stress, which might impact the score negatively.

  6. Time Considered for Calculating the Score

    Credit history considered for calculating the CIBIL score typically ranges from 6 months to 10 years, which depends on the depth of the credit data.

  7. Weightage is Given to Each Factor

    The exact weightage assigned to each factor is not publicly disclosed by CIBIL. However, payment history and credit utilisation are generally considered to have the most significant impact on the score.

CIBIL Credit Score Range & What it Means

The CIBIL credit score ranges from 300 to 900, with 900 being the highest and most favorable score. Here’s a general interpretation of the score ranges:






Individuals in this range may be considered high-risk borrowers, hence may find it challenging to get credit approvals

580-669 Fair These individuals may get credit approvals, but will have to pay higher interest rates with limited credit options
670-739 Good These borrowers are considered reliable, hence they have a better chance of getting credit at competitive interest rates
740-799 Very Good With a strong credit history, individuals are likely to get credit at favourable terms and lower interest rates
800-900 Excellent Individuals with scores in this range have an exceptional credit profile. They can easily access credit at the best terms and interest rates.

It’s important to note that lenders may have their criteria, and may consider other factors in addition to the CIBIL score when making credit decisions.

How to Check Credit Score Offered by CIBIL?

Checking your credit score offered by CIBIL is a simple and convenient process. Following these steps on the website, one can gain valuable insights into their creditworthiness. Best of them, checking your credit score with CIBIL is often free for one time, while multiple checks within a year may incur a fee.

  • Step 1:

    Open the official website of CIBIL and look for ‘Check Your CIBIL Score’, which is prominently displayed. Click on it to initiate the process.

  • Step 2:

    To verify your identity, enter some personal information such as date of birth, name, address, PAN, and contact information. Ensure accuracy of information for a seamless verification process.

  • Step 3:

    After entering the required details, select the subscription you prefer. CIBIL often provides one free credit score check per year. However, if you want multiple checks within a year then choose paid service.

  • Step 4:

    After selecting your preferred subscription, you will be directed to the payment page, if applicable. Follow the instructions to complete the payment process securely. Once the payment is confirmed, you will gain access to your credit score and a detailed credit report.

It is important to review your credit report thoroughly, as it provides important information about your credit history which includes your loans, payments on credit cards, and any defaults or late payments made by you. Understanding this information can help you assess your financial condition and take proper steps to improve it, if required.

How Much CIBIL Score is Required for a Home Loan?

This can depend on the lender and their policies. However, a CIBIL score of 700 and above is considered good for securing a home loan. Higher credit score demonstrates that the borrower has a good track record of managing their credit obligations and is likely to repay the home loan on time. This indicates lower risk for the lender, and hence increases the chances of loan approval.

While a high CIBIL score improves your chances of loan approval, it does not guarantee it, as lenders also consider other factors during the loan approval process. These factors may include employment stability, income, existing debts, and more.

Must Read: What is a Home Loan & Types of Home Loan in India

How Does the CIBIL Score Impact Home Loan Approval?

This score is one of the important factors considered by lenders while evaluating home loan applications. High CIBIL scores indicate excellent credit history and responsible repayment behaviour. This reassures the lender about the ability of the borrower to repay the amount on time.

As a result, a high CIBIL score increases the likelihood of home loan approval. On the other hand, a low CIBIL score may raise concerns for lenders as it suggests a higher credit risk. Lenders may hesitate to approve a home loan application if the CIBIL score is low. In such cases, borrowers may need to provide additional documentation or collateral, or accept a higher interest rate to compensate for the increased risk.

The Relationship Between CIBIL Score and Home Loan Eligibility

Lenders, including banks and financial institutions, use the CIBIL score as one of the factors to assess an individual’s eligibility for various financial products, including home loans. The relationship between CIBIL score and home loan eligibility can be summarised as follows:

  • Loan Approval

    A higher score is an indication of excellent creditworthiness, implying that a borrower is highly likely to repay the loan regularly, and within the loan tenure.

  • Interest Rates:

    A higher CIBIL score can also help you secure a lower interest rate on your home loan. Lenders often offer better terms and conditions, including reduced interest rates, to individuals with good credit scores. On the other hand, a low score might lead to higher interest rates or even rejection of loan application.

  • Loan Amount:

    A high score may result in you being eligible for a higher loan amount, while a low score could restrict the loan amount or require additional collateral.

  • Required Documents:

    A good CIBIL score may simplify the documentation process for your home loan application. Lenders may require fewer documents or have more streamlined procedures for individuals with a strong credit history.

    Having the best CIBIL score for a home loan can be a significant factor, even as lenders consider different aspects such as stable employment, income, existing debts, and property value. Each lender has their specific eligibility criteria for evaluating loan applications.

Must Read: Home Loan Pre-approval: Simplifying the Homebuying Process!

How CIBIL Score Impacts the Rate of Interest of the Home Loan

Lenders use CIBIL score to assess creditworthiness of borrowers. A high score indicates lower credit risk, and lenders are more likely to offer lower interest rates to borrowers with excellent credit scores. On the other hand, if the CIBIL score is low, it suggests a higher credit risk, and lenders may charge a higher interest rate to compensate for the increased likelihood of default.

The interest rate offered on a home loan directly impacts the overall cost of borrowing. A lower interest rate can result in significant savings over the loan tenure, while a higher interest rate can increase the total interest paid. Therefore, it is crucial to maintain a good CIBIL score to secure a home loan at a favorable interest rate.

Must Read: Difference Between Fixed and Floating Interest Rate in Home Loan

Does a Low CIBIL Score Impact Loan Interest Rates?

Low credit score can create hiccups in getting a loan, since banks will either reject the application or demand higher rate of interest. Additionally, rejection of a loan can downgrade a borrower’s CIBIL credit score.

Impact of High CIBIL Score on Loan Interest Rates

High credit score results in easy loan approval, favourable terms, and lower rate of interest. A borrower looking to apply for a loan should ensure they maintain good CIBIL score for home loans, as it reflects good credit behaviour.

How Does CIBIL Score Impact the Home Loan Amount?

If you’re planning to buy a luxury home, you might require a home loan to finance the purchase. While evaluating a home loan application, lenders consider different factors to check your creditworthiness, among which CIBIL Score is most important.

When it comes to home loans, a high CIBIL score can have a significant impact on the loan amount you can secure. Lenders want to lend to borrowers with higher scores, as they are perceived as less risky. Due to good credit score, a borrower may be eligible for higher loan amount. A higher CIBIL score increases the chance of loan approval with better interest rates & terms.

On the other hand, a low CIBIL score implies higher credit risk, hence can adversely affect a borrower’s home loan prospects. Banks and financial institutions may be reluctant to lend larger amounts, or may offer the loan at higher interest rates. In some cases, low credit score could lead to loan rejection altogether.

Must Read: Home Loan Tenure – Maximum and Minimum

How Can You Improve Your CIBIL Score for Home Loan?

To improve your chances of securing higher home loan amount or lower interest rate, it is essential to maintain a good credit score.

Follow these tips to improve your CIBIL score for a home loan:

  1. Pay your EMIs and bills on time to maintain a healthy credit score
  2. Keep your credit utilisation low
  3. Maintain a healthy credit mix of loans and credit cards
  4. Avoid making multiple credit applications within a short period
  5. Monitor your credit report regularly to identify & rectify actions that may be affecting your score

Must Read: Home Loan Down Payment – The Ultimate Guide


Maintaining a good credit score and improving one’s CIBIL score is of utmost importance while applying for a home loan. By demonstrating responsible financial behaviour, such as paying bills and loan EMIs on time, avoiding excessive credit utilisation, and maintaining a healthy mix of credit, individuals can improve their score over time.

A higher CIBIL score not only increases the chances of loan approval but also leads to better loan terms, including lower interest rates, higher amounts, and longer repayment periods. Therefore, it is crucial to prioritise building and maintaining good credit history to ensure favourable outcomes when applying for a home loan.

Must Read: Home Loan Process 2023: A Step-by-Step Guide to Getting Your Dream Home


1. What is a good CIBIL score for a home loan?

A good score typically falls in the range of 750 to 900. Lenders consider higher CIBIL scores as an indicator of lower credit risk, making it easier for borrowers to secure favourable terms and interest rates on their home loans. It is important to note that each lender may have their criteria to evaluate creditworthiness and decide the terms of a loan.

2. Is 750 a good CIBIL score for a home loan?

Yes, 750 is a good score for a home loan, as it signifies responsible credit history – in turn posing lower risk for lenders. With a score of 750, one can be eligible for higher home loan amounts and get better interest rates. However, it is essential to comprehensively assess your financial situation when applying for a home loan, as CIBIL score is not the only criteria used by institutions while processing loan applications.

3. Can I get a home loan if my CIBIL score is 700?

Yes, it is possible to get a home loan with a CIBIL score of 700. While a higher score is generally preferred by lenders, 700 is still considered decent and demonstrates a reasonable credit history. The terms of the loan may vary as per the lender’s policy, borrower’s income & employment stability, and other factors.

4. Is 700 to 750 a good CIBIL score?

CIBIL score between 700 to 750 is considered good, as it indicates responsible credit history and demonstrates lower credit risk to lenders. Borrowers in this range are likely to be eligible for higher loan amounts.

5. Can I get a home loan if my CIBIL score is 550?

Most banks and financial institutions favour applicants with a score of at least 750. Hence, it would be difficult to get a loan with a score of 550.

6. How to go from a 750 to an 800 credit score?

The best ways to show a lender that you are a responsible borrower is to pay your bills on time, keep the credit card balance low, improve your credit mix, and review your credit reports regularly.

7. How can I increase my CIBIL score?

Pay your bills on time, check the errors in your credit card report, clean all debts – including the credit card ones, get a secured card, choose longer tenures, avoid taking multiple loans simultaneously, avoid being a joint account holder, and increase your credit limit.

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