It is very important to have a good credit score for personal loan, home loan or any other type of loan. Banks or NBFCs give you a loan based on your credit score. If your credit score is good, you can get a loan without any hassle and without any guarantor. Many times you get a loan at low interest. At the same time, if your credit score is bad, the bank or NBFC can refuse you to give a loan.
Today we are going to tell you through the news that people with 500 credit scores will get a loan? 500 CRIF high mark credit scores consider as a major credit bureau scores like Cibil, Equifax, Experian. Such a score reduces the possibility of getting home loan to a great extent.
Especially when you are considering applying for home loans from mainstream banks and housing finance companies. Most banks like HDFC Bank, ICICI Bank, Axis Bank give priority to applicants with 650 or more credit scores. Most of the bankers are of the opinion that account holders should be careful in creating their credit profiles, as lenders take more precautions in lending money to borrowers with poor credit scores and poor credit profiles.
According to a report by Live Mint, Atul Monga, CEO and co-founder of Basic Home Loans, believes that “If your credit score is low, try to reduce your total debt by reducing your total debt before applying for a new loan. Try to keep your credit use ratio less than 30 percent and make sure you pay your loan EMI and Credit Card Bill time”
He also said, “Avoid making several loans or credit card inquiries in a short time, as repeated inquiries may spoil your credit score. See your credit report regularly to identify and fix any error, and make sure all the information is correct.”
What are the challenges with 500 credit scores?
The credit score of 500 reflects the pattern of missing payment or high credit use. Because of this, getting a home loan becomes very difficult and challenging. Even when approved, there may be certain conditions: High interest rates: Financial institutions can take interest rates of up to 10%, while interest rates for people with poor credit scores can be reduced by 8.1%.
Therefore, it is clear that it is quite difficult to get a home loan with a bad credit score of 500. Nevertheless, by paying timely and not applying for a new credit line in a short time, trying to improve your credit score gradually is easy steps that can help you fix your credit score.
