Thursday, 2 March 2017

How to Get a Home Loan with Bad Credit?

Mr. Bhatia had moved to Mumbai with his family after getting an attractive job at one of the biggest MNCs. He arranged for any apartment to live in on a rental basis. However, he knew he must get a home of his own, which is why he looked for the best home loans in India, and finally picked one. He was all set for moving into his new house, and couldn’t wait to start a new life with his family. However, when he received a call from the bank he had applied for the loan at, he was utterly shocked and disappointed. His loan application was rejected on the grounds of bad credit.
How did this Happen?
Low CIBIL score or CIBIL dispute are two of the biggest reasons behind home loan rejections in India. It’s because these are the factors that most lenders consider carefully to assess the risk associated with an applicant. If they have a bad credit score, then there is a good possibility that the applicant may fail to repay the loan properly within the tenure or make it to the CIBIL defaulters list. Thus, they prefer candidates who have a high credit score instead.
Unfortunately, most people become aware of their bad credit history when it’s too late. The moment they realize they have a bad credit score they wonder how they can enhance credit score in the soonest possible time to purchase their dream home. If you are also one such troubled person, then fret not for there is hope.
How to Get a Home Loan with Bad Credit?
It is possible to get a home loan even with a bad credit. However, you usually have to check with a number of banks before you could finally get an offer. Even then it is unlikely you will get a good interest rate.
If you want to choose from the low interest home loans, then you must improve credit score first. Follow these steps for the same:
Step #1: Get your Credit Report
You can’t make progress unless you know about your current standing first. Thus, the first thing you must do to learn how to boost your credit score, is applying for your credit report. There are many bureaus in India that provide credit reports, such as CIBIL, Equifax, etc. However, CIBIL is the most popular and recognized all over India. Hence, you can apply for CIBIL report by creating an account on their website and submitting a few documents. Once verification is completed you can get the report in your email inbox or even at home.
Step #2. Analyse Your Credit Report
Your credit report contains a lot of valuable information regarding your finances. Thus, be sure you take a good look at it. Go through every section, including the personal details section.
In the report you can see the total amount of debt that’s pending, your account information, history of loans, payments, and more. Check the enquiry information section. This contains the list of enquires made by the banks and other in response to your loan applications. If there are many enquires separated by just a few days, then it is bad for your score. Similarly, if you see that your credit utilization with credit cards has been quite high, then again it can explain why your score has dropped below average. For a good score it is important you spend less than 30%of the credit limit allotted to you on your credit cards.
Apart from financial details, pay attention to the accuracy in the printed information. If there are discrepancies, such as misprinted name, wrong payment dates, or outdated information, etc. then have these corrected as soon as possible. Fixing these errors alone can improve your score to a good extent.
Take Help, if Necessary

If you think there is a lot going on in your credit report and its overwhelming, then don’t shy from taking help from a professional. If you know someone who knows about how credit reports and credit scores work, then talk to them and show them your report. You can also take help from a consultancy company such as Credit Sudhaar, which has some of the most experienced credit reviewers and managers who can help you in improving your credit report. Once your score has improved you can easily get a home loan at an attractive interest rate. 

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