Your CIBIL score is a three-digit number between 300 and 900 that reflects your credit history and helps lenders assess your reliability in repaying loans, including home loans. A lower score can make it more difficult to get approved for the loan you want.
However, a low score doesn’t necessarily close all doors. With the right strategies, you can improve your chances of securing financing despite a less-than-ideal credit record.

In this guide, we’ll share practical steps on how to get a home loan with a low CIBIL score*, along with tips to help you improve your score over time.

What Is Considered a Low CIBIL Score?

In most cases, a CIBIL score above 750 is considered excellent, 700 to 749 is good, 650 to 699 is fair, and anything below 650 is generally regarded as poor or very poor.
A low score often indicates past overdue payments, frequent defaults, or high credit utilisation. This increases the lender’s perceived risk, making it more challenging to secure a house loan with a low CIBIL score.

Home Loan Options Available with a Low CIBIL Score

Most financial institutions typically require a score of at least 700 for home loan approvals.
Some lenders may consider low CIBIL home loan applications on a case-by-case basis, although the interest rates offered are usually higher. They may also require a co-applicant with a strong CIBIL score and a stable income source to reduce lending risk.

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Strategies to Improve Home Loan Approval Chances

If you’re wondering how to get a home loan with a low CIBIL score, here are some strategies to improve your chances:

• Larger Down Payment
  Putting down a higher amount upfront reduces the loan principal and lowers the lender’s risk, which can increase approval odds for a housing loan with a low CIBIL score.
  
  Include a Co‑Applicant or Guarantor
  Adding someone with a strong credit history to your application can boost your chances of approval.
• Keep Income Stable and Documented
  A steady job or well-documented employment history shows financial reliability, which lenders value.
• Be Transparent with Your Credit Report
  Regularly review your credit report for errors, get them corrected, and be open about any past payment issues to build trust with lenders.
• Opt for a Longer Tenure If Needed
  Extending your loan tenure can lower EMIs, easing your monthly repayment burden and reducing the risk of missed payments, though it may increase overall interest costs. Using a home loan EMI calculator can help you understand how tenure affects both your EMI and total interest paid.

Common Mistakes to Avoid

The following are common mistakes you should avoid:

• Ignoring Errors on Your Credit Report: Even small mistakes can lower your score and affect home loan eligibility, so always review your report carefully.
  
• Applying to Many Lenders at Once: Multiple loan enquiries in a short time can reduce your credit score and hurt your chances of approval.
  
• Using Outdated Information: Always rely on the latest credit report for accurate loan planning.
  
• Not Considering a Co-Applicant: Even with a steady income, adding a co-applicant who has a good credit score can strengthen your application.

However, it is important to note that most lenders still require applicants to meet minimum CIBIL score thresholds. Thus, the best approach is to improve your score before applying.

Tips to Improve Your CIBIL Score Over Time

If your score is low, focus on the following aspects:

• Make all your EMI, credit card, and utility bill payments on time without fail.
  
• Keep your credit card usage below 30% of your limit. For example, if your limit is INR 1 lakh, aim to use only INR 20,000 to INR 25,000.
  
• Avoid applying for multiple new loans or credit cards frequently.
  
• Check your credit report periodically and dispute any errors with the relevant credit bureau.

With consistent and disciplined financial habits, your score can improve over time, giving you a better chance of approval with favourable home loan interest rates.

Conclusion

Getting a home loan with a low CIBIL score can be challenging, but it’s not impossible. By taking proactive steps to improve your credit health, you can enhance your chances of approval and secure better terms.
At SMFG Grihashakti, individuals with a minimum CIBIL score of 700 who meet our overall eligibility criteria at the time of application can access home loans of up to INR 1 crore*. You can use our home loan eligibility calculator to get an estimate of the maximum amount you may qualify for. Apply online today to take advantage of competitive interest rates starting from just 10%* per annum and flexible tenures of up to 30 years*.