A credit score has a direct impact on your financial health. Not all financial products are offered to everyone, banks or any other lending institutes will look at your credit score before making any lending decisions. Your credit score describes the risk associated with your credit profile. If you have a low credit score, banks will be hesitant to sanction your credit application as they would feel you are too risky to take a loan.

Therefore before approaching any bank for any new credit you should always check your credit score and find ways to improve it if you have a bad one. Having said this, getting a home loan with a bad credit score is no longer impossible. But you may face few challenges to overcome in cases like this.

As home loans are highly secured loans there are certain ways that you can follow to get a loan even with a bad credit score:

NBFCs (non-banking financial Institutions) – NBFCs as they are more flexible with credit scores and cut offs than other banks. So they are the best option to consider if you want to apply for a home loan with low credit score. However, NBFCs offer loans at higher interest rates when compared to the other financial institutions and private sector banks.

Approach the bank that you have good long term relationship with: The best way to get your loan application approved is to approach a bank that you have had a relationship for a long time while having an existing account. Since your bank is aware of your past repayment history and your loyalty towards the bank can both help you avail a home loan from the same bank.

Looking at HFCs: Housing Finance Companies can also be one of the best options to look at to get home loans with bad credit score. These HFCs do not look at an applicant’s credit score to lend them credit, rather they consider your financial history and stability as main criteria.

Your income: If you have a bad credit score because of having no credit or due to late credit card payments, many mainstream banks will overlook such defaults in the past if you are presently employed with a good company with a very good salary.

Adding spouse as co applicant: If your spouse has high credit profile and better income you can add your spouse as a co applicant and apply for joint home loan. This will increase your chances of getting home loan approved faster.