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What is the Minimum CIBIL Score Required for a Home Loan and How to Improve It?

Updated: Feb 17, 2022
What is the Minimum CIBIL Score Required for a Home Loan and How to Improve It?

There is no minimum CIBIL score for home loans. However, as home loans are big-ticket loans with very long repayment tenure, usually ranging more than 10 years, lenders prefer borrowers with a CIBIL score of 700 and above to even consider an applicant. Individuals with a higher CIBIL score are considered to be financially disciplined, creditworthy, and the risk of default is lower. Applicants who have a CIBIL score higher than 800 can probably even get very good terms, depending on other eligibility factors.

Let’s see how.

What is CIBIL Score

CIBIL score is a three-digit number that indicates your creditworthiness based on your past credit behavior. The score ranges between 300 to 900. A score lower than 700 is considered poor among most lenders, indicating a lack of appropriate credit behavior. In such cases, the risk of default is highest and the loan account may turn bad. Whereas, a score closer to 900 indicates maximum creditworthiness.

The score is primarily calculated based on the past loan repayments, loan tenure, number of loan accounts, credit utilization ratio, etc of the individual.

The following table showcases different CIBIL Score ranges and what it means in terms of creditworthiness:

Range Creditworthiness Chances of Loan Approval
Below 600 Poor Loan application unlikely to be approved
Between 600-649 Doubtful Most lenders will reject home loan application
Between 650-699 Satisfactory Few lenders (not Grihashakti) may approve,
but may offer less faviurable terms like very high
interest rates
Between 700-749 Good Good chances of loan application approval
750 and above Excellent Very high chances of loan application approval with easier terms

Please note that at Grihashakti, we accept home loan applications only from those who fulfil all our eligibility criteria, one of which is a CIBIL score of 700 or more.

CIBIL Score for Home Loan

The required CIBIL score for home loan differs from lender to lender, which you need to confirm with the lender before applying for a home loan. It is the primary determiner for your home loan eligibility.

A score of 700 and above is desirable, as the chances of home loan approval are highest with favorable terms. In case, if you have a slightly lower CIBIL score, you can improve the chances of loan approval by adding a co-applicant to the home loan application and making higher down payments. This helps to spread out the risk, and for lenders, it becomes easier to approve the loan.

You should note, it is always better to apply for a home loan with a good credit score, as you get to access more benefits, including

  • Eligible for higher loan amounts
  • Easier terms and conditions on loan repayment
  • Competitive home loan interest rates, resulting in reduced costs
  • Reduced documentation and verification process
  • Quicker approval for home loan application

Must Read : 7 Key Factors Which Affect Home Loan Eligibility

Tips to Improve CIBIL Score

Having a low credit score impacts your ability to get a loan when required and also restricts you from the availing benefits that are offered by the lenders.

If you have a low CIBIL score, you can consider the following tips to improve your CIBIL score:

Ensure timely repayment of your loan: In CIBIL score, credit repayments history has almost 35% weightage. Therefore, you need to ensure you make timely EMI payments to continue improving the CIBIL score. Default or late payment of EMI hugely impacts your credit score and it takes months of consistent effort to reverse the impact. Also, it is recommended to always pay your EMIs (including credit card bills) in full. Paying a partial amount or only the minimum amount due will cause interest to accrue on the remaining amount, which would, in turn, cause your credit score to drop.

Lower credit utilization ratio: The credit utilization ratio has a 30% weightage in the CIBIL score. It refers to the total credit availed against the sanctioned limit. This is mostly calculated against your credit card balances and outstanding loan balances. A higher credit utilization ratio indicates you are highly dependent on credit to meet your short term expenses and is considered a bad sign by the lenders in terms of financial discipline.

Duration of loan: It has almost 15% weightage in the CIBIL score. It refers to repayment duration and whether timely repayment has been made during the period. If you have availed of a loan for a long duration, and have paid off within the due date without missing out on any repayment date, it positively impacts your credit score.

Frequency of applying for a new loan: It contributes up to 15% to the CIBIL score. The CIBIL score takes into account how frequently you have applied for a new loan and the rate of approval by the lender. For example, if you have applied for a loan with multiple lenders in a short duration, your credit report will have too multiple credit inquiries. It is not a good practice as multiple credit inquiries in a short duration indicates you are a credit hungry individual and negatively impacts your credit score.


Very few lenders may consider home loan applications where the CIBIL score is between 600-700, and so, it is better to improve and better your credit score above 700 first before applying for a home loan.

It helps you to get a better deal on your home loan and gives you a smooth home buying experience.

Must Read : Tips To Make Home Buying Process Less overwhelming

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