3 reasons why itâ€™s important to have a good credit score for home loans.
by avni Jadhav
Published Tue, Jan 16th 2018, 11:56 | Finance
The decision to go in for a home loan needs to be backed by a considerable amount of number-crunching. You need to compare interest rates, check the charges, look at loan amounts and tenures before finalizing on a loan offering and lender.
However, there is another number that deserves a lot more consideration than it receives and it is your credit score. If you haven’t given much thought about your credit score then this article will highlight 3 reasons why you should!
1. Credit score for home loan approvals.
Credit scores play an important role in deciding whether or not your home loan is approved. A good score, which is above 750, will always help you get your home loan approved quickly. However, a poor credit score could see your home loan application get rejected.
This is because your credit score is an indicator of how good or bad you are as a borrower. A good score helps lender find confidence to approve your application and a poor score will deter lenders from providing you with quick approvals.
2. Loan amount eligibility:
Your credit score for home loans also play an important role in deciding the loan amount you receive. Applicants with higher scores are normally eligible for higher loan amount or will allow you to negotiate a higher loan amount. This is something you cannot do with a poor credit score.
3. Credit score for home loan interest rates:
So not only does a good credit score aid approvals and help you get higher loan amount but it will also help you get a better interest rate. If you have a good score that’s above 750 and close to 900, you can leverage it to negotiate lowered interest rates. Though most lenders will only reduce it by a couple of decimal points, even this slight reduction will help you save big over time.
So, if you are applying for a home loan, it makes to work on your credit score before making the application.
We hope this article has given you some valuable insights into credit scores and their importance when taking a home loan. Good luck and all the best!