How does a credit score impact on a home loan?

Credit score plays a pivotal role in determining your eligibility for a home loan and its associated terms. A credit score is a numerical representation of your creditworthiness, ranging from 300 to 900, with a higher score indicating lower credit risk. Here is how it impacts home loans:

Eligibility: Lenders use your credit score as a primary factor to assess your eligibility for a home loan. Typically, a score above 750 is considered good.

Interest rates: Borrowers with excellent scores often receive lower interest rates, resulting in lower monthly payments over the loan tenure. On the contrary, lower scores might lead to higher interest rates, increasing the cost of borrowing.

Loan amount: A good score can potentially qualify you for a larger loan, while a poor score may restrict your borrowing capacity.

Overall, maintaining a good credit score is crucial when seeking a home loan in India. Regularly checking your credit report, making timely payments on existing debts, and managing your finances responsibly can help you build and maintain a healthy credit score,