Can I Get A Home Loan With A CIBIL Score Of Minus 1?

Anybody who has ever taken a home loan will tell you that you should check your Credit Information Bureau of India Limited (CIBIL) score. Whenever you apply for the home loan or any form of credit, the lender will check your CIBIL score to determine whether you are eligible for the home loan.

In order to understand what lender checks in your CIBIL report, it is important to read and understand your CIBIL report.

Much has been said about CIBIL scores in the range of 500, 600 or 700, but there are scores ranging from 1 to 5. In fact, your CIBIL score can also be -1.

MakaaniQ tells you what happens if your CIBIL is being -1.

What are the factors that are taken into account to establish the CIBIL score?

• Type of credit (whether it is secured or unsecured)
• The volume of loan applications
• Demographic information like age, income, location, office and residential address etc.
• The number of loan enquiries (even if the loan is not sanctioned)
• Credit utilisation ratio (it simply means how much credit is taken by you, as against how much is offered to you).

What does the CIBIL score ranging from 1 to 5 denote?

• CIBIL score of 1 means the highest likelihood of default
• CIBIL score of 5 means the lowest likelihood of default
• Applicants with CIBIL score of 1-5 are new to the field of credit, and have credit history that lasts than 6 months

What does the CIBIL score of -1 denote?

• CIBIL score of -1 means that you have no credit history
• If you have nor previous borrowing history, no credit card and no track record on which your credit worthiness can be based on, the CIBIL will assign you a score of -1.
• CIBIL score of -1 is also known as 'NH' or 'No History'.
• For the lender, CIBIL score of -1 would mean that there is nothing to look at, in the credit history of the applicant, because there is no loan or credit card history
• But, the CIBIL score of -1 does not mean that you cannot take a home loan
• Banks and financial institutions will do credit appraisal of home loan by analysing income proofs, Know Your Customer (KYC) papers, employer and employment details, ownership documents, other sources of income etc., despite your CIBIL score being -1
• Every lender has internal credit policies to appraise and sanction home loan cases with credit history of less than 6 months

How to take a home loan with a CIBIL score of -1?

• To begin with, no lender will deny you a home loan just because your CIBIL score is -1
• You just lack credit history, and CIBIL score of -1 will not mean that you are not credit worthy
• You must submit all income proofs (salary slips, bank statement reflecting salary credits, Form-16 etc.), tax returns, employment proof and a letter of recommendation from your employer etc.
• Make your case strong by highlighting all your strong points like other sources of income, an increment letter, average bank balance maintained, bonus or reimbursements received, good number of assets with zero liabilities etc.
• If you are taking a co-applicant on the loan, you can furnish his or her credit history (it is better to choose a person who has some form of credit detail or history). This way, the lender would be able to assess some repayment practice or pattern for you.
• After the home loan is sanctioned and disbursed, if you pay all your home loan equated monthly instalments (EMIs) on time, you will end up having a good CIBIL score.