If you have ever taken any kind of loan then you must be familiar with the credit score or CIBIL score. CIBIL score plays a vital role in enabling your loan deal. The higher the CIBIL score, the higher your chances of getting a loan.
If you have ever taken any kind of loan, then you must be familiar with the credit score or CIBIL score. CIBIL score plays a vital role in enabling your loan deal. The higher the CIBIL score, the higher your chances of getting a loan and the easier the terms are. The CIBIL Score is a number between 300 and 900, based on your transactions with financial institutions.
However, if you have never taken a loan or credit card before, your credit score may be zero. According to tax and investment expert Balwant Jain, before extending any credit facility to the customer, the lender wants to satisfy himself that the borrower will repay the loan in due course. Credit information bureaus address this problem of lenders through credit scores.
Lenders are comfortable in giving loans to a customer whose credit score is more than 750. Can a person with no credit history also get a loan? According to Jain, though the credit score is a starting point for lenders to consider lending to borrowers, it is not the only criterion that lenders look at when giving loans.
So even if you do not have any credit history, you can take home loan from lenders, but you will have to submit more documents to the lender, so that the lender can satisfy about your ability and your intention to pay EMIs on time. According to Jain, in such a situation your educational qualification and job profile are the important criteria used by the lender.
For example if you are a doctor or a CA, it ensures your regular income. Lenders are comfortable with such qualifications. Similarly, if someone is in a high position in the government – such as an IAS or IPS, there is every chance of him getting a home loan even if he does not have a previous credit history.
You can get a home loan even if you do not have a government job or higher educational qualification. In such cases, lenders may ask you for bank statements of the last few years to know your financial condition. If there are regular debits for investments like Systematic Investment Plans (SIPs), lenders can be assured of your savings habit.
Banks may also examine your banking transactions in detail, to understand whether you pay utility bills like electricity bill or mobile bill regularly. This lets the lender know about the regularity of your banking transactions. If you are living in a rental accommodation, they can also verify the regularity of your rental payment. Your spending and saving habits can be gauged from your bank statements, which can determine whether you will be able to repay the loan on time.
Banks may also ask you to get a guarantee from someone who has a good credit history and credit score. These are some of the optional parameters that can be used by the lender in the absence of regular credit reports. However, these criteria are not perfect and each bank may have different internal parameters. This way you can get a loan even if you have zero credit score.