To apply for a Credit Card, a good CIBIL score is always help you get approval without any hassle. Some institutions can offer you a Credit Card even on zero CIBIL score. Applying a Credit Card is also one of the ways to jumpstart a fair credit history if you do not have any. However, overusing the card will affect your CIBIL score negatively, so will any delay or skip of payments. Thus, misusing Credit Card in a way of exceeding credit limit or non paying the bills, will in turn affect your chances in future of getting another Credit card or Loan.
CIBIL scores range from 300 to 900. Its is advisable before applying for a Credit Card, check CIBIL score and select the best options based on your CIBIL score. A score of 750 will get one access to a leading Credit Card provider with good terms and benefits. If you have a good CIBIL score, it is recommended to shop around and find the best credit that will suit your needs. For someone with a CIBIL score between 650-750, there might be a few options for Credit Cards. However, they may not qualify for a Credit Card with a high limit. They also will not be eligible for most Credit Cards with great benefits and rewards programs. A CIBIL score under 650 will very rarely qualify for a Credit Card. If one has a score under 650, our recommendation is to improve CIBIL score before applying for a Credit Card.
Bad credit history : Past credit repayment record of the applicant is an important criteria on which banks decide whether or not to issue a credit card to the applicant. All card issuers check the applicant's credit history (CIBIL report) before making a call as to whether or not to issue the plastic card. In case, a person has failed to repay any of her/his old dues timely, it will reflect in his/her CIBIL record, seeing which banks could reject the credit card application. To overcome this hurdle, a person should make efforts to improve her/his credit score/ CIBIL record by paying back all dues. To come in the good books of the banks, timely payments on loans or credit card expenses have to be made for at least six months continuously. A person can also use credit cads to improve his/her credit score.
No credit history : Another common reason for facing rejection from card issuers is the lack of a credit history. It means that those individuals, who have never taken a loan or credit card, can also be rejected by credit card issuers. It is because of the simple reason that if a person has never taken any type of credit, s/he will not have any record with CIBIL. These cases are considered risky by banks as there is no record of such an individual's credit repayment behaviour. In this situation, it is advised to apply for a credit card from a bank with which a person already has a relationship, like a salary account or savings account. Despite having no credit history, this bank will trust the applicant more than other banks.
Using multiple Credit cards: Generally, card issuers trace the number of existing unpaid loans or credit cards an individual already possesses. If a person is already having multiple credit cards, or is servicing several loans at a time, there are high chances of her/his new credit card application getting rejected. Banks consider applicants with high exposure to any type of credit (loans, credit cards) as risky.
Non-listed Company: Individual's working in non-listed private firms may find it difficult to get a credit card. Usually, banks identify people serving in non-listed companies as people with high risk profiles. Lending institutions feel that people falling under this category have issues such as income fluctuations, unemployment in case of unexpected closing down of the unit, designation exaggeration etc. However, applicants with a good credit history, high income levels and stability in income may see their applications getting accepted by banks.
Reside in Black listed area: At times, credit card companies reject a card application merely because the applicant's profession or area of residence falls in the blacklisted / Cibil defaulter's list. Though, with the availability of credit reports this practice is declining quickly, those who want a credit card but are facing this problem, can go for secured credit cards.
Low income: All credit card issuers have a minimum eligibility requirement which has to be fulfilled by prospective customers who want to own a credit card. If an individual is earning below a card issuer's eligibility norms, her/his application is bound to get rejected. In these cases also, secured credit cards come in handy.
Paying only Minimum Due: With a credit card, you are permitted to pay just a minimum amount every month regardless of your actual bill. Many view this as easy credit and find it unnecessary to pay the entire amount due. Paying only the minimum amount due is a mistake that you must avoid. Debt on a credit card is the most expensive form of debt. You will eventually end up paying a huge amount in interest if your rollover balance on your credit card every time. Revolving your credit can and in most cases, leads to a debt trap.
High utilization of Credit card limit: With increased credit limit many of us go overboard. Avoid any offers of an increased credit limit. Secondly, control your utilisation. For example, if you have used Rs 70,000 out of a credit limit of Rs 1 lakh, that puts utilisation ratio at 70 %. Utilisation of over 30% is viewed negatively by loan providers. Your CIBIL score is also arrived after taking into consideration the credit utilisation ratio of your debt to the available credit limit. The higher it is, the more your CIBIL score get negatively impacted, even if you are making the minimum amount due payment every month.
Closing oldest Credit card account: The length of your credit history also determines your CIBIL score to an extent. The longer it is, the better. If you cancel your oldest credit card account it would affect your CIBIL score negatively. Avoid cancelling your account, especially when it is a clean one with a good repayment track record.
Using only one form of Credit: While evaluating your loan application, lenders take a look at your CIBIL report and score. You can improve your score by maintaining a healthy mix of credit such as a home loan, auto loan and a couple of credit cards. If you only have credit cards and personal loans-which are unsecured debts, it may affect your chances of any other loan approval since the lenders perceive you as a high-risk customer. Hence, it becomes vital to have a healthy mix of secured and unsecured debts.
Not accessing your CIBIL report:Most people assume that they are maintaining a good score. But incidences of identity theft are on the rise and someone could apply for a loan on your behalf. The lenders raise enquiries in your CIBIL report every time a loan or credit card is applied for in your name. If you access your report from time to time, you would know if the enquiries are genuine or fake.
“Biggest myth which people have is that they need to take loan to improve their CIBIL score. Credit cards can be of great use when it comes to improving your credit score.”
A secured credit card unlike a normal credit card is backed by a deposit amount which acts as collateral for the credit provided with the card. The credit limit depends on the credit history and the deposit amount. In today’s world no one likes to be a defaulter purposely however no one can avoid the unforeseen circumstances. There are two types of defaulters in relation to credit cards: Non-wilful defaulters and wilful defaulters. In case of non-wilful defaulters, the borrower does not default intentionally and needs time to pay off his dues. His circumstances force him to default however in case of wilful defaulters the borrowers purposely do not pay the credit amount due on him.
CIBIL scores are linked to the credit cards. CIBIL scores are otherwise known as the credit score. It is a 3-digit number and is derived based on the CIR. In this context it is important to understand how the CIBIL score is advantageous and why it is essential to maintain a higher CIBIL score. In simple terms higher CIBIL score means more chances of getting a loan amount sanctioned to buy a property. In order to maintain a higher CIBIL score one has to maintain a strong portfolio and clear his dues regularly.
A secured credit card has the advantage over the unsecured credit card in that it is a winning situation for both the parties: the bank and the individual. The bank earns dual income in the form of interest from the deposit amount and the income and charges from the credit card. It is a two-way income for the bank. On the other hand, the individual gets benefit in the form of higher CIBIL score which can be used to get a loan amount sanctioned to purchase a property. It is important to understand a point that a secured credit card is synonymous to a debit card because just like a debit card, the individual can spend up to a specified balance which will be available against the deposit amount in the bank. Hence secured loans are a blessing in disguise.
Repayment History (35%) – Pay all your loan EMIs and credit card dues on time.
Credit Utilization (30%) – The ratio of total credit (liabilities) that you owe to your total credit limit.
Duration of Credit Servicing (15%) – The amount of time for which you have been servicing credit (loan) also has an impact on your credit score. If you have been making timely payments for your loans/ credit cards for a longer period of time, it will increase your credit score.
Credit Mix (10%) – A better credit mix i.e. your credit (liabilities) spread across credit cards, auto loan, personal loan, home loan etc. also helps in improving your credit score.
Number of Credit Inquiries (10%) – Whenever you apply for a loan or a credit card, the lender will run an inquiry on your CIBIL report. More number of inquiries indicate that you are credit hungry which is not a good sign for your credit health.
Secured credit cards are often taken against fixed deposit, so you can try having a good bank balance if not great credit history. The bank can then recover the dues from the funds you hold in case you default. However, there is no point in defaulting and letting your savings run dry, thus keep up an excellent credit score to get credit cards easily. Thus, a Person having a Bad CIBIL score can also have the Secured Credit Card.
What Is The Cibil Score Required For A Credit Card?
CIBIL scores are generally in the range of 300-900. A good CIBIL score may fall somewhere in the range of 700 upwards. Most banks and financial institutions follow a similar pattern of assigning credit to your rating hence knowing one bank’s minimum CIBIL score for a credit card should be a reasonable basis to determine minimum requirements of banks in general.
Banks usually accept a CIBIL score in the range of 700-750 and above to issue a credit card to an applicant. This is subject to the applicant meeting all other eligibility requirements.
What Are Some Good Ways To Improve Cibil Credit Rating Score?
Every lender will have no hesitation to approve the loan application if the CIBIL score is 750 or above. Personally I would suggest you to know the facts about the CIBIL score so that you can be aware of what is affecting the CIBIL score.The following steps will help you to improve your credit score from 590 to 750 in decent amount of time.
Borrow minimum through credit cards and loans: Try to keep the outstanding debts on credit cards to the minimum, the higher the outstanding debts are; lower will be the CIBIL score. Keeping minimum debts and managing them wisely will help in getting new loans and credit cards easily. Having said that, only if you have some credit cards and existing loans, banks and NBFCs will be able to check your CIBIL score. Thus these have the power to increase and decrease the CIBIL score but it depends on the way you handle your cards. Using credit card balance up to 40% is considered as good and will not cause any adverse effects on the CIBIL score but over utilizing it above this limit will start reducing the CIBIL score from the minimum requirement of 600+.
Check CIBIL Report: It could be at times an error or miscalculation too. Do a detailed study of the CIBIL report not just to know what impacted the CIBIL score but it will also let you know how to improvise the score. Until you request for a detailed report, you will not get the information. All banks and NBFCs will use CIBIL score as the default source to know about the creditworthiness of its applicants.
Don’t Default Payments: Irrespective of how big or small the payment due is on the credit card and loans, never default it. Another crucial part that will affect the CIBIL score is making only minimum payments on credit card bills. It is true that there will be no delay payments charges applied on your card if you make payments for minimum due on credit card bills, but there will be high rate of interest charged on the outstanding amount plus the CIBIL score will get drastically affected.
Don’t try to make settlement of loans and credit cards: At times it is quite possible to feel that the loan or credit card is a burden and you might find it difficult to afford but don’t take the option of loan or credit card settlement (bank will write-off the credit offered to you). You might get rid of the debt but it will affect the CIBIL score and you will not be able to take any loans, credit cards or other credit facilities for at least the next 7 years. The remark will be there on the CIBIL report and on the basis of this all banks and NBFCs will reject the loans or new credit card applications. Banks will even reduce the available credit limits on your credit cards if there are settlement remarks on your CIBIL reports.
How To Increase My Cibil Score If Am A Defaulter For Credit Card?
First you need to check your credit report for reasons behind bad score.If there is unpaid loans /bills then settle that amount.If there are any discrepancy in the score then approach credit information agency to sort it out.
You can build up on your credit score by using credit card and paying credit card bill on time.You can also go for small personal loan.Ensure that you do not default on loan/ bill payment in future.
How To Improve My Cibil Score From 791 To Above 800?
We must properly plan our credit card spend and payment: it's quite common to use bank cards for most of our purchases, but we ought to ensure it on or before the due date that we are paying.
Let’s avoid a heavy outstanding in our bank cards, it shall affect our credit history slowly. We have to ensure that is stays within 30 to 35% of your credit card limit.
Mostly we will be getting a call from the bank to increase our limit in the card that is existing. We could take that since these calls are made after verifying credentials as well as may help us to keep within our 30% credit limits.
Do not have significantly more than two cards, and always attempt to make use of the credit card that is oldest. Effective usage of older cards will raise the score
We must pay our secured or unsecured loan EMI promptly. Try not to miss any installment. Always try to use the part payment option if available. It shall help us to finish your loan faster and in addition, really helps to enhance the score
Let us not submit an application for credit card or loan, just to look at your eligibility, that too in multiple banks. This will badly affect our score as our credit rating gets deducted for every application we sign.
It is extremely very easy to spoil impression but it will need very long time to rebuild, Yes CIBIL score also functions in a way that is similar. Try not to play with our score, no one knows whenever we will require the funds. Some smart decisions will likely make our life simpler at some point of time and these credit file and credit rating definitely during the purchase of movable or immovable properties.
Which bank provides credit cards for a low CIBIL score?
Banks offering secured credit card for individuals with poor credit
Axis Bank – Insta Easy Credit Card: Minimum fixed deposit amount is Rs. 25, 000 and maximum is Rs. 25, 00,000.
SBI Secured Card: Requires an individual to have a FD account at Dena bank with minimum deposit of Rs. 30,000.
ICICI Bank: To apply for this card, you need to be above 18 years of age with an ICICI Bank Fixed Deposit of ₹ 20,000 or more with a minimum tenure of 180 days. The Fixed Deposit should not be Linked/Quantum/80C/NRE/NRO/HFC or in the name of Third parties/Partnership firms/HUF/Society/Trust/ Companies or under an existing lien.
Can I apply for credit card when my credit score is 758?
An offer on CIBIL website doesn’t reflect your credit worthiness. Just go to some bank in person and apply. 758 is a OKAY score. Banks will check your repayment history to decide whether to approve your card or not. Preferably apply with the bank in which you use your savings account. That will help you get approved easily.
What are the requirements of getting your first credit card?
Since the passage of the Credit Card Act of 2009 you must be 21 or prove that you have the capacity to make payments and be at least 18. This is to discourage the issuance of cards to college students.
There is no other particular requirement but if you have no credit history you might want to start with a secured credit card. Go to your bank or credit union and request a card. You will guarantee the amount owed with an account at that institution. As you use the card your payment record will be reported to the credit bureaus and you will be building credit. Typically the bank will remove the secured element within a year or so of responsible use and you will have a credit card and access to others. Do not pay a significant sum for this card and do not do this on line. Also, do not confuse a prepaid card with a secured card. A prepaid card will not help you establish credit.
If you don't want to be bothered with the secured card, take a shot at Kohl's or some similar store with a card. They often offer cards to "thin file" (unproven) clients and take a chance. Just make sure you use it sparingly and pay it off each month. it will still take a few months to establish a credit record deserving a decent card.
What are the requirements to apply for a credit card in India?
There is no "requirement" as such. However, please note that "credit card" expense is a form of unsecured loan, where the 'risk' of the lender(bank) is maximum. Hence they do check the CIBIL credit ratings and your income to get a confidence that you'll pay the dues in time. Hence if your credit rating is decent and have a steady income or assets, credit card companies would be more than happy to grant a credit card to you. After all they make money when you transact
Can I get a credit card with low cibil score?
Normal Credit Cards are called UnSecured Credit Cards.
And with Low CIBIL you definitely is not going to get it, until the Credit Manager sees you as a HNI with high source of income.
Best is you may go with a Secured Credit Card product to actually use a Credit Card & also to enhance your low credit score by doing transactions.
A Secured Credit Card, which generally is referred by banks: Credit Card against FD, in India, can be taken instantly by creating a min FD of Rs. 20,000 Lien with your Credit card account. You may get upto 80% of the 20k to spend on your credit. Rest perks etc, will be same as of credit card ( depends on what is offered by the card issuing bank )
Make sure to pay bills on time when using a secured credit card. And this will help enhance your low cibil (credit score) to a good one.
What are the conditions to apply for SBI credit card?
Credit cards are issued based on certain eligibility criteria.Not only for SBI credit cards, but if you wish to apply for any of the other credit cards also,banks analyse certain important points before approving your application.
4 Important Factors or Conditions that are normally considered :
Your age : There is a specified age limit for applying for a credit card.You are eligible only if you fall in that limit.The minimum age for applying for a credit card is 18 years.But,this may be increased as per bank’s policy.
Your Income : If you have a fixed and regular income, the chances of credit card approval are better.Also,as a normal trend what I have analysed that salaried people get faster approvals as compared to others.
Your credit background : Having a good CIBIL score is another pre-requisite for availing a good credit card especially in case of premium credit cards.
Other factors based on Type of credit card : If you apply for a free credit card with limited features,you might get easy approvals.But,if you apply for a premium credit card,there are set income limits.This means,if you have an income above their set criteria then only you can grab that credit card.
What is the minimum CIBIL score required for an AMEX card?
While in general and core of 750 is deemed to be healthy score however there are various other factors that may influence the underwriting decision. In regards to the Amex card or any other credit card for that matter, it is upon the internal policies set by the company. A person who is new to credit and does not have any score may also be able to get it while a person with a score of 750 might fail to meet the criteria.
How to get a SBI credit card?
You may simply visit the branch to apply for a card or you may apply it through SBI card online website.
Alternative options could be to check through CreditMantri or Bank Bazaar & may apply for a card.
There you will be able to figure out your eligibility too. Every Card Issuer will check your CIBIL.
Regarding CIBIL: Every Credit Lender = Loan or Credit Card, they will check the Credit Score ( CIBIL ).
For that you wont have to do anything. You simply will be required to provide your PAN card at the time of application. And they will do the required check of CIBIL.
If you have 850 approx Credit Score, you should stay assured of getting your card issued.
Regarding Selection of Card:
If you are looking forward to opt for a New Card, I will advise not to go with SBI. May be the APR would be good with them or offers may be great. But whenever an issue happens on a credit card in case of SBI, there wont be a satisfactory solution to that. Moreover you will get tired with your pursual for the resolution & at the end, you will give it in.
Best banks for the card could be Citibank, HDFC, Standard Chartered, RBL, YES Bank, AXIS bank etc. Always remember, private players are more interested in their principal amount being taken care of faster than the interest in case of any settlement or any issues if comes up. SBI is not bothered for that. IN fact in case of a issue they wont provide you quicker resolution.
Can a bank executive check my CIBIL without my permission?
All banks, NBFCs are members of RBI approved credit bureaus, therefore these institutions will have access to check credit score. Within these institutions, usually access to check credit report and score is extended only to executives involved in loan or credit card process.
A bank official will check your credit score only when you are either applying for a loan or credit card, or if you are already an existing customer of bank for loan or a credit card. In such cases, your permission is implicit. Banks institution periodically reviews the list of people whose credit reports have been pulled, to avoid any misuse.
Call now for free expert advice: +91 95350 61366