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How CIBIL Helps To Avail A Home Loan

A home is everyone’s dream and to own a home it takes years to plan and get into a position where you can think of borrowing money from Bank/NBFC or friends and relatives.When you think to borrow a loan from a financial institution, there are lot of factors that determine your eligibility for the amount of credit you need.

In a recent seminar held to enlighten the new generation about ‘Transforming Rural India through Financial Inclusion’.Our predecessor Governor of Reserve Bank of India (RBI) Raghuram Rajan announced that the Credit Information Bureau of India Limited (CIBIL) should provide one free credit report every year to all the individuals. According to him, this report will help the individuals to improve their credit rating and appeal if they see possible errors that can be rectified.

This piece of announcement came as a good news for the future home loan seekers.An individual otherwise has to pay ₹ 550 to access a one-time credit score and a credit report from CIBIL.

The team of Mudra Home can explain you how a free CIBIL report can help the home loan seekers.

Understanding the concept of CIBIL

  • CIBIL is a storehouse for credit information of all customers of all Banks/ NBFC’s and other financial institutions. It is an organisation that collects the credit information given by the lenders (banks/nbfc’s and financial institutions) and circulates the same information to other financial institutions while credit-decision making and lending purposes.
  • This information is given to the Banks/NBFC’s on a monthly basis.

How a free CIBIL report help the home loan applicants

Many times a majority of home loan applicants do not check their credit reports before they apply for home loans.They are generally unaware of the information present in their CIBIL report.

Also, everyone is not willing to pay ₹ 550 to generate a CIBIL report. A known home loan applicant very wellknow and understand that it is a part of the credit appraisal process.The credit manager will generate a CIBIL report to assess the applicant’s credit information and the credit score. So, the home loan buyer will ultimately get to know his credit position through the CIBIL report.

But there is one thing that people generally fail to realise is that every single financial information takes 60-90 days to get updated in CIBIL report. So, in the case of any discrepancies or errors in the CIBIL report, the sanctioning process of the home loan could be put on hold and the particular credit variation could take time in getting validated and updated by CIBIL.

With a free CIBIL report, the home loan applicant can easily take a look at his credit score and take necessary steps to improve it or remove errors, if any. The applicant should also be informed if any fraud loans were taken in his name in past or currently running from any other organization.

A free CIBIL report will also enable the borrower to understand the loan sanctioning process from the lender’s point of view in a better way. It will help him understand how trustworthy he can be from the Bank/ NBFC’s perspective and if he is worthy of borrowing a new credit. It will give him the clear idea about the kind of credit information the CIBIL report exhibits.


Credit Score    Home Loan    Loan Against Property    balance-transfer    Business Loan    Personal Loan



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