As the pandemic is hard to comprehend by dealing with it the world proceeds with its transformation, so is the case with the real estate market. Interest rates have been dropped in order to support homebuyers, affordable housing is provided by builders, and repayment terms of loans have been made lenient. With limited options available many are looking to invest in properties as a safer means in today’s chaotic world. EMI plans are numerous and all one has to do is apply for one however high credit score is required while seeking a home loan.
Credit Score Breakdown
What Does a Credit Score Stand For?
In layman’s terms a credit score determines if a person is capable of paying off a debt or in substance how reliable a person is as a borrower, with the range being anywhere from low 300s to upper 900s. India has four major licensing credit information agencies which have been sanctioned by the country’s Reserve Bank. These being CIBIL, Experian, Equifax, or CRIF High Mark. Any lender before providing a person with a loan checks their credit score in order to determine risk. 750 and more is a good score and thus will enable better chances of getting a loan at lower interest rates.
Do you intend to borrow money to buy a house in a place you’ve always wanted? Well, here’s how to boost your credit score and get a favorable home mortgage.
5 Tips For Raising Your Credit Rating
1. Set a Reminder For Any Outstanding Bills
With most financial transactions made through a credit card, it shouldn’t be so hard to pay the bills associated with the use of that credit chip. ”Don’t leave credit or entirely forget about it,”- set reminders aside for other transactions as well because timely payments make a difference in your score. In the case of having little to no savings, focus on paying off what you owe and avoid spending unnecessary money.
2. Close Other Credit Or Do Not use Them Often
The duration for which you have had a credit card does contribute to your score somewhat so if you do like having options, avoid closing any other cards, even if they are used once in a blue moon. And to maintain these cards, use bills such as utility bills to ensure payments are consistently made. It boosts the impression that using a credit card responsibly is the key.
3. Be Aware Of Your Credit Score
Make an effort to examine your credit report once each year in order to see where you fall against your target score. A credit office can provide this report free of charge. Plus, this gives you sufficient time to make necessary adjustments. An adequate score lays somewhere between 740-799 while an outstanding score exceeds 800.
4 Any Pan Card Will Work
Having a PIN number for a credit card is advisable, especially for those taking out a credit line as you spend released funds on daily expenses. When graduating or attaining a new job opt for a credit card if you don’t have one and do not shy away from using it.
5 Repeat The First Step Despite Your Improvements
Other ways of boosting your score is by consistently making bills on time even if you have made that an everyday source of income so learn to manage subscriptions so you don’t forget. Although some may be enticing, make sure to stay away from purchasing unneeded items.
4. Decrease Your Regular Emis
The banks in India look at what’s called the Fixed Obligations to Income Ratio (FOIR) while assessing any loan application. FOIR is the percentage of one’s income that is utilized in repaying EMIs and other debts that the person might have. Reducing FOIR in the first place then by clearing off outstanding debts should serve to increase his credit rating and will make it easier for him to get a loan, with better terms.
Importance In Credit Score In Home Ownership
Having a great credit score makes it more likely for you to qualify for a home loan which has a lower interest rate and more lenient repayment options. These days, with flexible loan plans and subsidies provided by the government for first time home buyers, it is easier to purchase a new home than it has ever been. If you opt for the services of a reputed builder it will also increase your chances of obtaining a pre-approved loan option thereby making it possible for you to own a house.
Author – DreamLocation
Being a well-known real estate brand in Asia, we at Dream Location seek to assist potential buyers in every single step related to the purchase of a home. We have been working for over twenty years in constructing infrastructure projects in Kerala and abroad and are thus well positioned to provide practical knowledge to our audience. Our intention is that our posts help in the making of informative choices that will form part of your strategy moving forward, with a view to purchasing your ideal house.
For more information about Dream Location and to search your dream property, please visit Dream Location on Google Map. Contact us today to know more about the best real estate deals in Delhi and North India; we will connect you to the right property investment.