6 Steps to boost your credit before you buy a home
- By Rajiv Raj, Co-founder and Director, Creditvidya.com
When you are ready to buy a property, there are some tasks to be completed before you take the plunge, from a credit score perspective. Generally 750 plus Cibil score is considered a good score by a lender. “79% of the loans or credit cards disbursed are to individuals with a CIBIL TransUnion Score greater than 750,” said the website of Credit Information Bureau of India Limited, India’s leading credit score company.
So, to be home loan ready, below given are top 6 tips you can follow:
- Pull out your personalized credit score: When you pull your personalized credit score, you get to know the status of your report. If you are a financial disciplinarian, there may not be much work left to do. In which case you have to just check spelling mistakes or any inaccuracies in banks reporting your earlier loan status.
- Raise a dispute: if there are any inaccuracies or spelling mistakes in your name, address and phone numbers, raise a dispute with Cibil. In case of any bank falsely reporting the status of your loan or repayments, raise a dispute on Cibil and simultaneously get in touch with your bank about the inaccuracy.
- Ensure a good mix of credit: The lenders often look for a good mix of credit in loan applicants. It helps to have an active credit card account, student loan and an auto loan. The repayment history is an indication of good financial behavior from a lender’s perspective.
- Do not apply for a new credit card before home loan application: Every time you apply for a new credit, your score can fall temporarily. So stay away from applying for new credit card at least six months before you apply for a loan.
- Do not use credit for buying everything: Buying a house is just one part of spends. The other part of it is doing up the house. It does cost quite a substantial amount. Do not buy these things on credit. Instead use your savings.
- Do not juggle a lot of money: At least a year before you apply for a loan, do not juggle around with a lot of money between all your bank accounts. Lenders tend to get suspicious if you are shuffling a lot of money. In fact if you move just predictable amount on regular basis, it is comforting from a lender’s perspective
Source: Credit Vidya
CreditVidya is an online educative engagement tool which helps customers to stay on the top of their credit, pay off their debt faster, save money on interest payments and live a richer life. CreditVidya empowers the consumers with basics of borrowing, creditworthiness, their credit scores and functioning of credit facilitating entities such as credit bureaus