Clix > Credit Score > 5 Smart Ways to Boost Your Credit Score Before Applying for Home Loan

5 Smart Ways to Boost Your Credit Score Before Applying for Home Loan

Clix May 20, 2021


Home loan comes as the best source of finance when it comes to buying your dream house. However, before you apply for a home loan, it is imperative to check your credit score. Your credit is based on your credit history and is considered a marker of your creditworthiness. Home loan lenders check your credit score to decide whether they want to lend you the money or not, what interest rate to offer.




Wondering what a good credit score to apply for a home loan is? Ranging between 300 and 900, a credit score of 725 or above is considered good. While a high credit score indicates high credibility and poses you as an attractive borrower, a low score decreases your chances of getting an approval on almost any kind of credit instrument.

But don’t worry, if your score is less than 725, read on to find out ways to improve your credit score before applying for a home loan.

1.    Check Your Credit Report

When a lender receives your home loan application, they determine your creditworthiness depending on three main things: your income, your EMIs/ payables, and your credit history. Therefore, before you apply for a loan, check your credit report from your credit bureau and review it thoroughly. If you find any error in it, have it fixed immediately, as it might be holding down your credit score due to none of your fault.

Checking your credit report will also help in identifying your outstanding bills and the reasons for your low credit score. Accordingly, you can work towards improving and increasing your credit score.

2.    Pay All Your Credit Card Bills and Loan EMIs on Time

If you keep missing or delaying your payments, the loan provider may perceive you as an irresponsible borrower and may reject your loan application. Therefore, before you apply for a home loan, ensure that you have not been negligent towards paying your dues over the last six months.

Your repayments record is one of the most crucial factors that determine your creditworthiness and help the lender decide whether to approve or reject your loan application. So, always repay your credit card bills and loan EMIs on time. Regular payments and responsible behavior will be positively reflected in your credit report and help in improving your credit score.

You may use a home loan EMI calculator to select a loan term with EMIs that you can easily afford. With this tool, you can choose EMIs that you can easily incorporate into your monthly income so that you never miss them.

3.    Don’t Pose Yourself as a Credit-Hungry Borrower

Many borrowers make the mistake of applying for home loans from several lenders at a time. While doing that, they do not realize that each loan query they make gets reflected in their credit history. When a loan provider goes through your credit report and sees several credit queries there, they see you as a credit-hungry borrower and end up rejecting your loan application.

So, instead of making several home loan queries, take some time to research the market and shortlist a few reputed lenders. Compare them with each other and apply for one lender that best suits your requirements and preferences. Apart from the loan amount and interest rate, other things to look for in a lender include customer service, terms, and conditions, repayment options, eligibility conditions, documentation requirements, fees, and charges, etc. This trick will not only save your credit score but also assure you higher chances of loan approval.

4.    Diversify Your Credit History

No credit history or limited credit history will often keep your credit score low. Lenders require a credit score of at least 725 to approve your loan application, and diversifying your credit mix can help in achieving that. You can diversify your credit history by maintaining a mix of credit cards and loans.

5.    Maintain Your Old Accounts

Avoid closing any loan accounts or credit cards even if you do not use them any longer. Maintaining old accounts is one of the best tricks to build credit history and prove your credibility. Besides that, closing these accounts will also reduce your credit limit, which can ultimately increase your debt-to-income ratio and reduce your credit score.

A Pro Tip

If you earlier had a low credit score and have recently achieved a score of 725, wait for a few months to apply for a home loan. Lenders want to ensure that you have been maintaining a good score and not if you have just got an acceptable score.


apply for a home loan of up to ₹ 2 Crore from Clix Capital and take advantage of our hassle-free application procedure, flexible repayment terms, and unmatchable customer service.

For any queries, find us on Facebook, Instagram, LinkedIn, Twitter, or WhatsApp

You can also reach out to us at or call us at 1800 200 9898

When Is the Right Time for a Home Loan Balance Transfer?

  Home loans have been companions of many people in building/buying their dream house. Many banks can offer home loans …

What To Expect When Your Credit Score Is 750?

  A credit score is one of the most important parameters to judge the creditworthiness of a borrower. All reputed …

What Makes Home Loan a Tax Saving Proposition?

  Buying your dream home is a remarkable achievement for most people in life. However, it can be hard and …