Dev Singhraha
Relocation Expert
If you are planning to buy a house with a home loan, the first step is to check for your credit score through the credit report. A credit report can be obtained through CIBIL, Experian, Equifax or Crif High Mark. Remember that meeting minimum credit score criterion is mandatory to apply for home loan.

A minimum credit score required 750. In case you have a score below 675, then it's time for you to improve the score. Besides, a good credit score will fetch you a good rate of interest for the home loan as the lenders always prefer borrowers with good credit history.
 

Few things to consider if you have a low credit score.

  • Check if there is any error in the credit score. There is a possibility that you have already repaid the previous loan; however, in the records of the bank still shows outstanding. Rectifying such errors will improve your credit score.
  • In case you have not repaid some loan, it is wiser to repay them and close the loan account. That will again improve the credit score.
  • Make your payments on time - be it credit card bills or appliance loans.
  • Credit consolidation also helps. For example, if you have several loans, consolidate them into one.
  • Credit card bill: Many pay the minimum amount on the bill, and the rest revolves around the credit. This is not a good practice. You may choose to convert it to personal loan instead. This will enable you to repay the loan in a better way as the interest will be much lesser.
  • In case you are a defaulter of a loan, and you cannot repay at the moment, you can correct it over a period of time. If you have a good proportion of unsecured loans and secured loans, try and alter the mix over time.
  • Avoid excessive loans shopping. The hunger of grabbing best possible deal may lead to a tag of credit-hungry. Each time you enquire a bank will get you registered in the banks and will indicate that you are credit-hungry.
  • Too much hunger for credit will leave a negative mark as well. Do not use up your entire credit limit just because you can, as this is also another sign of credit hunger. 
You can avail help for professional agencies such as Credit Sudhaar in case you still fail to improve your credit score. They will help you in many aspects such as the number of credit cards that you should limit to, mixing of secured and unsecured loans and so on.
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