Today, credit cards are quite a common sight, with hundreds of thousands of Indians owning more than one card.
However, obtaining a credit card might prove difficult if you’ve got a poor credit score.
Credit rating is an important component that determines if you qualify for credit cards or not. CIBIL, i.e., Credit Information Bureau India Limited, is one of India’s largest credit reporting agencies, providing individuals with credit scores.
When you have a poor CIBIL score, you may find obtaining a credit card through a traditional institution difficult. But don’t be alarmed.
In this post, we’ll go over some tactics and strategies that will assist you in acquiring a credit card for a low CIBIL score.
What is the CIBIL score of a credit card?
A CIBIL ranking is an assessment of credit used to assess an individual’s creditworthiness.
It constitutes a three-digit figure that can vary between 300 to 900; typically, a higher score demonstrates a more favourable credit record and a higher chance of acquiring credit.
Credit card usage is one of several things that can affect your CIBIL score. Card usage, past payments, and unpaid balances may all impact your credit rating.
If you use the credit card wisely and pay on time, your credit score will likely rise.
However, your credit report quality may suffer if you continually carry a big debt and make late payments.
While using credit cards can impact your CIBIL rating, it is only one aspect among several others.
Loan repayments, the number of credit profiles you have, plus the duration of your history with credit are all elements that can affect your score.
Now, you might have developed a general idea of the CIBIL score for your credit card and why it is important. If you still want a credit card, check out the next segment to find out how to acquire a credit card with an inadequate CIBIL rating.
How to acquire a credit card with an inadequate CIBIL score?
Credit cards are becoming a crucial financial tool for most individuals.
They provide ease of use and a variety of additional advantages that make transactions simpler and more economical.
Obtaining a credit card with a poor CIBIL score can be difficult. A poor CIBIL rating is a red flag to banks and financial organisations since it suggests that you’ve not previously managed your funds correctly.
However, acquiring a credit card despite a poor CIBIL Score is not unattainable. Here’s how you can go about it:
Boost Your CIBIL Score:
Improving your rating on CIBIL is the initial move towards obtaining a credit card for a low CIBIL score. Your credit rating indicates your reliability and having a poor score can make it difficult to obtain a credit card. Begin by making on-time payments on your debts and dues, lowering your credit utilisation ratio, and avoiding several requests for credit in a brief time. It will take a while, but boosting your CIBIL will be worthwhile.
Choose a Guaranteed Credit Card:
If your CIBIL score is poor, the possibility of receiving approval for a credit card with no security is lower. You have the option to get a credit card with security instead.
A secured credit card encourages you to put money down as a guarantee, which acts as a security deposit. The maximum amount of credit on the card is typically a proportion of the total security you have paid.
A secured credit card is a great alternative for individuals with low CIBIL scores because it lowers the threat to the credit card company or bank.
Register for a Card of Credit Based on Your CIBIL Score:
If you’ve got a low CIBIL rating, you should apply for a credit card as per your credit score.
For example, if your CIBIL rating ranges from 300 to 650, you are eligible for credit cards made exclusively for individuals with low CIBIL scores.
Credit limits are lower, interest rates are greater, and fewer incentives and advantages exist. They can nevertheless be a fantastic beginning point for improving your financial score.
Register to get Co-Branded Credit Cards:
A partnered credit card is offered in partnership with a specific brand or store. These cards typically include exclusive privileges and prizes for the brand’s most devoted clients.
You might qualify for a co-branded credit card even though you are a regular consumer of a specific brand or store. These cards frequently have more lenient qualifying conditions and can be obtained easily.
Acquire a Credit Card Using Add-On Cards:
If you’re friends with an extended family member or have an associate who already has credit cards with a decent rating, you may request them to offer you an add-on card.
A supplement card is an extra credit card given to a current cardholder. The amount of credit available on the extension card is normally a proportion of the maximum limit on the original card.
Because the principal cardholder is liable for repayments on a supplement card, the financial institution or bank is far more likely to grant the card even though your CIBIL score is poor.
To summarise, if you want a credit card despite a poor CIBIL rating can be difficult. However, it is not unattainable.
Improving the CIBIL rating, choosing a credit card with security, submitting an application for a card of credit that fits your CIBIL score, obtaining a partnered credit card, and obtaining a credit card via extension cards are all ways to obtain a credit account with an inadequate CIBIL score.