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Those applying for a home loan or any other loan know the importance of a good CIBIL score. It may be merely a three digit number but when it comes to loan approval its high score proves a boon to many. However, at times even a high CIBIL score lead to rejection of Home Loan. Surprised to hear that, but it’s true.

Take a look at some of the main reasons for Home Loan Rejection despite having a Good CIBIL Score:

Bad comments in CIBIL Report

If you had studied the CIBIL report deeply, then you might have noticed that apart from credit score, CIBIL also mention comments on all the loans, defaults or settlements you have made in the past. Comments such as ‘Settled’, ‘written off’ or ‘Days Past Due (DPD)’ etc., if mentioned in your CIBIL report leads to loan rejection many a time.

Co-Applicant’s Low Credit Score

If you are taking a loan, with another applicant may be your wife or Husband or vice-versa, then take care that the credit score of the applicant must be 750 or more than that. If you co-applicant is a defaulter in the past, then banks easily get point to reject your loan.

Past Rejections

You may think it a small point, but your past loan rejections are listed well in the CIBIL report. Often, we apply for a loan in various banks in order to get approval from any of them, but every rejection goes to your CIBIL report that gives the current bank a reason to reject your loan. So keep patience and think twice-thrice before applying to numerous banks. Let your CIBIL report get updated first and then move further.

Debt on Loan Borrower

If you are already debt-ridden then bankers get a reason a disapprove your loan application. Often called as Debt to Income (DTI), this ratio gives information to the lender how much of your salary is utilized in paying loan EMIs. Higher is your DTI, more are the possibilities of your loan rejection. In order to save yourselves from this situation, keep your DTI less than 50%.

Guarantor of Defaulter Loan borrower

In case, you have become a guarantor of your friend or relative to help them in their loan approval procedure and in later stages that borrower becomes a defaulter, then you can also become a major sufferer in this situation. It also gets reflected in your CIBIL score and hence even having a good credit score, this negative mark can lead to loan rejection.