Now Reading: Co-applicant’s low credit score can hurt joint home loan approval
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Co-applicant’s low credit score can hurt joint home loan approval
Co-applicant’s low credit score can hurt joint home loan approval
Applying for a home loan with a co-applicant can boost borrowing eligibility by combining incomes, but lenders assess the credit profiles of all applicants. A co-applicant with a weak credit history, low…
The Story in Brief
Applying for a home loan with a co-applicant can boost borrowing eligibility by combining incomes, but lenders assess the credit profiles of all applicants. A co-applicant with a weak credit history, low score or irregular repayments can affect the entire application, even if the primary borrower has a strong profile. Business Today reports that the credit profile accounts for roughly one-third of the lender's evaluation.
Lenders also examine the Fixed Obligation to Income Ratio (FOIR), preferring it below 40-50%. Clearing outstanding dues, avoiding new loans before applying and maintaining timely repayments can improve a joint application's prospects. The financial record of every co-applicant matters for approval, loan amount and terms.
The Indian Opinion
The article's warning about a co-applicant's weak credit history is solid advice, but it feeds a lazy narrative that a good primary score alone guarantees nothing. The real test is not just the score but the entire debt picture, the FOIR ratio. Lenders are rational, not punitive. If a co-applicant's missed payments are old and minor, the combined income may still outweigh that risk. Instead of scaring borrowers, the media should name the actual threshold: a co-applicant with a score below 600 or active defaults is a deal-breaker. Will any lender publicly state that cut-off?
Source: businesstoday.in
This story was synthesised by AI from the source linked above.
