If you are in need of home loan and have bad credit, the normal conception would be that there will be no good options for you to get a loan when compared to people with good score.
Over the last few decades, the RBI has come up with a number of programs to help people with bad credit, avail home loans. After all, the main idea of considering credit score is to judge the likelihood of the borrower to repay the borrowed loan back. On the contrary, there are many people who are seeking for a home loan even though they have bad credit but will be able to pay back the loans. At times, a number of things happen that are out of our control which will ruin our credit score. This will make it incredibly harder to opt for loans. Even people who have less score have paid their loans on time and hence credit score should not be the only criteria for judging an applicant
Sometimes things happen accidently and sometimes we make mistakes that certainly is no justification for blacklisting an applicant forever. However, gradually banks and lending agencies realize that just because someone has bad credit, doesn’t justify that he/she should not be given a home loan like everyone else.
The lender can take certain measures in order to make the loan more secure. This will ensure safety and also will help people with the easy availability of home loans. A smart lender should focus less on the credit score instead should identify reasons for low credit score. In case, negligence is the primary issue wherein the borrower does not care to pay back the loan then on such grounds loan can be rejected. On the contrary, if an emergency during the payment time has affected the score, then this can be considered as something beyond the applicant’s control wherein loan can be sanctioned.
Banks and other financial institutes need to understand that scores may vary due to multiple reasons. Judging only on the basis of a score is certainly not an appropriate thing. The reason behind it must be considered so that a genuine person is not barred for availing loan. If after a thorough investigation it is found that the applicant is genuine, then only lenders should opt for granting the loan.
To conclude, credit score and other measurement tools are mere guidelines, but they should not be replaced by logical and analytical reasoning power of human beings. It is wise to rely on such tools, but not at the cost of true and positive people.
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