There are so many individuals who are unaware of credit ratings, credit reports, or credit scores when they apply for a home loan from a bank. Home loans are a huge amount of money and some people genuinely need financial aid to help them move in their new home. There are many credit repair companies in India that emphasize on maintaining a good credit score in order to secure a home loan.
There have been cases that people get rejected on their home loan application just because of their poor credit standing and are tagged as defaulters in the CIBIL records. Any credit repair company would first advise you to pay off any outstanding dues or debts before you apply for a home loan. Going without the advice may end you up in a big trouble and then you may not be able to apply for any other loan unless you take a step forward to improve your credit score.
In the pre-CIBIL era, it was easier for banks to right-off any such dues and grant you the loan, but since CIBIL has taken over, banks are following these practices to ensure that the individual applying for a loan has good financial standing. If you are first time applying for a home loan, there are few tips that you need to consider before you apply.
You should know your credit rating which is a crucial step that you need to follow before applying for the home loan. You should not only do this process for loans but also to keep a constant track of your credit score on a general basis. In order to get your loan application approved, you should at least hit the benchmark of 750 points, anything below that you will need an expertise service who can guide you in rectifying your credit report.
Mending your credit score is a good decision, but finding an appropriate credit fixing company is your first step, Credit Clear is a specialist in handling such issues. There are no quick solutions to get your credit on track, but you can gradually build the credit score. This recent credit record can help avoid your financial mistakes of the past. The next step is to take proper guidance and clear all your previous dues with all the banking and financial institutions. Make sure you take a letter as a proof, stating that you have settled all your debts with them and ask them to update this information with CIBIL.
Taking a step further, after clearing all your dues, would be to establish your creditworthiness by applying for a full secured small loan. This will help you get rid of the defaulter tag, and by taking a small amount, you can pay off all the EMIs on time that can give you a chance to apply for a home loan. Before you go for that home loan application, prepare yourself in advance by collecting all the necessary documentation, minimizing your expenses and showing more income to the bank will help your chances of getting your application approved.
It also important that if you have a long standing with the bank and the bank is willing to strengthen ties with you, you should also consider the pre-approved home loan applications. In this case, the banks try and give you the best rates and added benefits.