In the News


How to fulfil your dream of own home

DNA - Mar 26, 2019, 06:45 AM IST

Home loan

 Home loan , Thinkstock


For most Indians, purchasing a house is a big deal and tops the priority list. With the rise in income of working class and growing accessibility of home loan applications, today one can easily make an attempt of making their dream come true – buying a home. However, the most important part of buying a home is getting the right loan with a manageable interest rate through banks and other financial institutions.

Before applying for a home loan, it is advisable to keep a track of financial institutions' rate card. Do your research by checking with your friends and family for their feedback and opinions about interest rates and services. Different banks and financial institutions offer home loans at different interest rates but interest rates alone should not be your sole criteria for selecting a lender.

Once you apply for a home loan, the lender checks your credit history before deciding to lend you money. Credit history provided by the Credit Information Company or Credit Bureau helps the lender assess risk as a borrower and accordingly decide on your loan application. Financial institutions have varied set of interest rates for different types of loans. But if the applicant has a good credit score and his credit worthiness is high, then it would be safer for banks to lend money.


To build a credible credit footprint it is important to consider these five steps that will help your dream of buying a home come true.

Timely payments: First and foremost step to build a credit history is timely payments of your bills and other Equated Monthly Installments. If you don't pay the minimum amount of your bills on time, it can have a negative impact on your credit score.

Be prudent and avoid defaults: The new lender can see all your previous defaults in your credit report. Hence, it is advisable to avoid default payments on a credit card or a loan installment. The credit report also reflects details about the settlement of default payments with your previous bank.

Be smart while spending: Be wise by not going overboard with spending and shopping. You need to weigh the offers judiciously keeping in mind your income and ability to pay. Maxing out the credit card limit will have an adverse impact too.

Limit unnecessary inquiries: It is advisable to limit your inquiries for loans or credit cards as it may have minor impact on your credit score. Each credit application inquiry becomes part of your credit report and can potentially drop your credit score.

Check your credit report regularly: Start making a habit of checking your credit report regularly and thoroughly. You can access your credit reports from the credit bureaus through their websites. If you find any discrepancies in the report, immediately contact the respective credit bureau to have clarity. Checking your credit report works as an early-warning before the rejection of your loan. Also, only apply for credit that you can afford to pay back.


The writer is head, business development and strategy, Equifax, Emerging Markets.