Owning a home is a lifelong dream for many, and home loans have become an integral part of turning that dream into reality, especially in India. Homebuyers
rightfully focus on property prices, down payments, and EMIs, but have you ever thought of what matters just as much—if not more—than these things? The number that banks look at first. Your credit score. If your credit score is above 800, you are not just a random applicant; you’re someone that the banks desperately want on their books. Why do banks care about your credit score? A credit score is the report card for your borrowing behaviour. The higher the score, the better you appear to the lender. A credit score above 800 means you have a record of being financially disciplined, you pay back on time, and you manage credit responsibly, making you a low-risk borrower. It helps you get loans faster, secure lower interest rates, get higher loan amounts, and, overall, you enjoy better terms. Also Read: India’s Housing Boom Shows Signs Of Cooling: What It Means For Home Buyers In a long-term loan, even slightly lower interest rates can save you lakhs and lakhs of your hard-earned money. How can you maintain a solid credit score?
- Timely payment of bills: Always pay your bills well before the due date. Even a slight delay can lower your credit score significantly.
- Limit your credit utilisation: Try to use less than 35 per cent of your credit limit. For example, if your credit limit is Rs 1,00,000, try to keep your spending under Rs 45,000.
- Avoid applying for too much credit at once: Multiple applications at once can lead to harder enquiries, and too many enquiries can lower your credit score.
- Don’t close your old credit card: A long credit history improves your score. Keep it active with minimal usage.
- Be patient: A healthy credit score is not built overnight.
