Homebuyers planning to avail themselves of a home loan are advised to maintain job and income stability as well as a high CIBIL score to not only enhance their chances of loan approval but also their negotiating power and therefore, the possibility of being able to avail of a loan on terms and conditions that work best for them.

A stable income and job are crucial as it allows borrowers to pay their loan EMIs on time and refrain from defaulting on loan payments. A good CIBIL score is important as it is reflective of a borrower’s responsible attitude towards credit and good repayment capacity and therefore, helps borrowers’ avail of a loan on beneficial loan terms and conditions. But, what is the CIBIL Score?

TransUnion CIBIL is one of the most popular credit information agencies in India. TransUnion CIBIL collects data from various institutions that help it understand how a borrower uses credit and how responsible are they towards its repayment. Based on their findings, TransUnion CIBIL assigns a CIBIL score to borrowers, which is a three-digit number between 300 and 900 that indicates a borrower’s creditworthiness and ability to repay a loan on time. To be eligible for a loan of any type, a borrower must have a CIBIL score of at least 750. A CIBIL score between 750 and 900 is considered excellent and is the mark of a borrower who can be completely trusted with timely repayment of loan money. Such borrowers get approved for a loan quickly and are offered the best loan terms and conditions by lenders.

The question is why should borrowers check their CIBIL score. Here is the key reason why borrowers must check their CIBIL score regularly. When an applicant applies for a loan, lenders check their CIBIL score to ascertain their repayment capacity and decide the terms and conditions on which to extend the loan. TransUnion CIBIL assigns a CIBIL score to borrowers based on the information they get from financial institutions. Sometimes, financial institutions pass wrong information to credit information bureaus, which leads to a borrower’s rating getting badly affected due to no fault of their own. A bad CIBIL score can easily ruin a person’s chances of getting approved for a loan. Therefore, potential borrowers must make sure no error in their credit report is ruining their chances of getting approved for a loan. This can be done only by regularly checking one’s credit report for errors. Further, applicants must know that rectifying errors takes time. TransUnion CIBIL cannot rectify any errors on its own. When a credit user reports an error in their credit report, TransUnion CIBIL reaches out to the financial institution that passed the piece of information that led to the appearance of the error in the first place and seeks clarification. It is only after TransUnion CIBIL gets an answer from the concerned institution that can it make changes to your credit report. This usually takes a month or at least a few weeks. Further, once the change is made, it takes another week or two for the changes to reflect in an individual’s credit report. Thus, potential borrowers must check their CIBIL report from time to time and report any errors they see immediately.