Why You May Not Get A Home Loan Despite Having A Good Credit Score

Home Loan Credit Score

Many assume that having a good credit score is their ticket to getting their home loan approved. This misconception is completely wrong. One may have an excellent credit score but still, get their loan rejected.

There are numerous reasons for this because a good credit score is not the only parameter for loan approval. First of all, the borrower should plan the loan process. Then, they should calculate payable EMIs with a home loan calculator to ensure they are under their payment capacity. Then, one can thoroughly study home loan eligibility. After this, you will be able to predict whether you may get a home loan or not.

Therefore, to get a home loan, thorough research and planning are a must. Let’s discuss the reasons for not getting a home loan despite a good credit score in detail.


The Reasons For Not Getting A Home Loan Despite A Good Credit Score

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●       Negative comments on the credit report

Apart from the credit score, the lenders also look at the borrower’s credit report. The credit report contains information about your DPD or Days Past Due, employment details, loan history, and many more. Every minute detail and comment can greatly impact getting the loan rejected.

●       Faulty image of the guarantor

The borrower and the guarantor are both considered as a single party in the eyes of the lender. So, if the guarantor is found to be responsible for defaults, the loan will immediately get rejected by the lender.

●       Taking up excessive loans

Over-dependence on loans can also give a negative impression. An individual who has a habit of taking up excessive loans is considered a risky applicant. A borrower who takes too much credit may be overburdened, creating defaults.

●       Irregular tax payments

Lenders thoroughly study the tax payment history. If they are shady or irregular, the borrower can get apprehensive about approving the loan. These records are the core elements through which lenders verify the information provided by borrowers. Therefore, it is important to make timely and regular tax payments.

●       Unstable or inconsistent income

Lenders look for an individual who is stable to repay the loan. They avoid borrowers who have unstable jobs and irregular incomes. A secure and stable income is vital to get your loan approved, even if you have an excellent credit score.

●       Submitting incorrect documents

One should make sure that one submits error-free documents. Filling out incorrect documents can cast a negative impression on the lender. Therefore, the borrower should make sure to submit relevant and accurate documents.

●       Improper information

An ideal loan candidate should have proper knowledge about the procedure of loan application. First, one should do prior research using a home loan calculator to know the payable EMI. Then, they should study the home loan eligibility criteria to understand the same better. A person who does not have a basic understanding of the process can never get the loan approved.

●       Secure to unsecured loan ratio

The borrower avails the secured loans after keeping any asset like a home or land as collateral with the lender, such as a home loan. Unsecured loans are loans like credit cards and personal loans. These are not secured against any collateral. Therefore, balancing the ratio of both types of loans is essential.

●       History of rejected loans

Lenders develop a negative outlook for the borrowers with rejected loans. When the borrowers apply for a loan, the lender thoroughly studies their history. Therefore, the tag rejected loan can overshadow your good credit score, which may result in getting your loan rejected.

●       Guarantors low credit score

If the borrower’s co-applicant or guarantor has a poor credit score, this may result in getting the loan being rejected. After the borrower, it is the guarantor who is responsible for the repayment of the loan. Therefore, it is important to choose a guarantor with a good profile to get the loan approved.


One should not solely focus on improving their credit score to get the loan approved. Credit scores play an important role in getting a loan sanctioned, but they are not the only factor. A lender looks through various parameters before approving the loan. Proper planning by using a home loan calculator and going through all the parameters of home loan eligibility can help you to avoid loan rejection.

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Praneet Samaiya
the authorPraneet Samaiya
Entrepreneur, Movie Critic, Film Trade Analyst, Cricket Analyst, Content Creator