What is the Credit Score Requirement for Home Loans?

Any individual can need home loans, but sometimes taking a loan can be a complex process due to a low credit score. Credit scores determine your worthiness and reliability in getting a loan. A financial institution or bank would do a free CIBIL score check to deduce whether you should be provided with a loan, making it crucial to have a good score. 

Importance of credit score for home loans 

The credit score is also commonly known as the CIBIL score, which comes in three digital numbers lying between 300 to 900, whose calculation is made through a person’s credit history by the licensed credit bureaus. Banks use these credit scores to decide whether they would take your home loan application further. 

These are done by the collection of your history of credit data by the credit bureaus, which relate to the existing debt, payment history, and credit usage. When applying for a home loan, your bank or financial institution gets this data through credit reports and credit scores. 

Required credit score for a home loan 

There is no minimum limit for a home loan, but every bank has a point compared to which they decide whether to get an application forward or reject it. A credit score between 750 to 900 is considered a good score. Once you have your free CIBIL score check conducted, you have a good chance of getting your loan requests met, the approval process will be fast, and you will also be able to negotiate an improved interest rate. 

If your credit score is anywhere between 600 to 749, this means you have an average credit score. Upon doing a free CIBIL score check, you can still get home loans if you have average scores, but the bank will also be checking the other factors, such as your existing loans, monthly income, employment stability, etc. Further, the process will be more time-consuming, and you may not receive the best interest rate either. 

On the contrary, if your score is between 300 to 599, you have a low score with a poor history which decreases your chances of getting a loan. The few banks that give you home loans may decrease the loan amount while requesting collateral and high-interest rate. In a case of rejection, you would have to mandatorily improve your credit score to fit the criteria for getting a loan. 

Improving eligibility for home loans 

A good credit score is advantageous and assures others to provide you with a loan. Some ways of improving the credit score are – 

  • Tracking your free CIBIL score check to ascertain its improvement;
  • Regularly conduct a free CIBIL score check so that you can rectify any of your errors and spot mistakes quickly; 
  • If you have any default or outstanding payments, then you need to get them settled as soon as you can; 
  • If you pay your EMIs and credit bills on time, then that improves your score. 

Getting a home loan with a low credit score 

Even when you have a low credit score, you can get a home loan, even when you do not have a credit history. When applying for a home loan, it is always better to improve your credit score. But if not possible, then you can try some of the following tips – 

  • Getting a guarantor

Your eligibility can be improved if you have a guarantor or co-applicant who has a good credit score.

  • Searching another lender

You can always look for another lender who provides you with a loan with high-interest rates. 


CIBIL score plays a huge role in getting you any loan from a financial institution, which also applies to a home loan. It is always better to first improve your credit score and continue that improvement before applying for the loan. But it is always possible to get a home loan, even with a low credit score. 

Checking your CIBIL score is a relatively simple process, and it can determine whether or not you’ll be eligible for a bank loan. It may take time to improve your score, but if you persistently work on improving it, you’ll be able to get approved for a loan sooner. You can check your CIBIL score using one of these third-party websites or with our the CIBIL score app on your phone.

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