A CIBIL error or credit score drop can add Rs 19 lakh to a Rs 50 lakh home loan. Here are 4 prevention strategies.
Numerous social network users are experiencing unexpected drops in their credit scores. Among the offenders are fraudulent transactions, misreported loan information by lenders, late payments on credit cards or BNPLs, and over use of credit limitations. Any large-ticket loan, like a home loan, can cost you many lakhs more if your credit score or CIBIL score is low. Understanding why credit scores abruptly decline and how it may affect your life is beneficial. In order to understand how to keep a healthy credit score, or CIBIL score, ET Wealth Online consults with a variety of professionals.
Let's say you have been patiently saving money for four years to purchase the Bengaluru home of your dreams. Now that you have arranged the down payment, you can apply for a Rs 1 crore home loan. You are sure that you will be able to obtain the home loan because you have a reliable source of income.
Your bank responds that because of your poor credit score, you will be required to pay an interest rate of 10.75% on your house loan. According to the relationship manager at your bank, you might have obtained a home loan for an interest rate of 8.35% if you had a higher credit score. Now, with the higher interest rate, you will have to pay a few lakhs more.
You may question why, given that I have never taken out a loan or missed a credit card payment, my credit score is so low. You're confused because, despite never having taken out a loan of this kind, your credit record shows that you have an outstanding tractor loan in your name.
Startling? Here's another shocking fact: These kinds of events are neither unique incidents nor exclusive to fiction.
Hundreds of people have expressed worry about a sudden decline in their credit ratings for a variety of reasons on social media. Erroneous transactions, inaccurate reporting by lenders, late payments on credit card bills, and a host of other issues can all result in a decline in credit score. You must assume responsibility for checking your credit ratings on a regular basis and reporting any errors to the relevant authorities.
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