Over the years, credit cards have extended to become more than a mere chip of luxury. They importantly impact the credit score. Credit cards make purchasing convenient and effectively improve your budget. The positive behaviour reflected in using the credit card helps build your credit rating. A high credit score opens an excellent avenue for some of the best credit products on the market. Read on to know more about how you can use this powerful financial tool.

Credit Scores and Credit Card Applications

The process of getting a credit card is convenient. Leading lenders require you to simply provide two documents to process your application and offer you a credit card at the earliest. Some of the documents for identity proof that you can provide include the passport, Aadhaar card, voter’s ID and PAN card.

The lender initiates your credit card application once you submit all the mentioned documents.

Reasons for Credit Card Denial

Possible reasons that your credit card may have been rejected are as follows:

  1. A large quantity of debt, in spite of timely payments.

  2. A short credit history, which means they may not be able to rely on your credit score as of yet.

  3. Recent faulty payments or delays.

  4. Unstable employment which means unstable income.

  5. An incomplete or incorrectly filled in application form.

Why Do Banks Check Your Credit Score Before Issuing a Credit Card?

The creditworthiness of an applicant is an extremely important factor that is reviewed by lenders when offering a credit card. Lenders do not wish to offer products to defaulting customers. This is why they importantly run checks on the credit report to assess the financial capability of the applicant. The score allows lenders to evaluate whether the credit card holder will be able to responsibly handle the financial obligation.

Lenders analyse your record of repayments and defaults by checking your credit score. The history also gives them an insight into the record of any loans or credit cards that you currently service. Simply put, it provides the lender with a clear understanding of whether or not they must process your credit card application. While it comes as a surprise, having no credit history is also considered poor credit history.

Minimum CIBIL Score Required to Get a Credit Card

The CIBIL score ranges between 300-900. A score above 700 is considered good. Usually, lenders go by a similar pattern of assigning credit to the rating. This is why it helps to know the minimum credit score threshold laid out by a bank when offering a credit card. Having an understanding before applying will help you with a reasonable expectation.

A CIBIL score in the range of 700-750 is considered excellent by lenders when issuing a credit card to an applicant. However, the applicant must also meet all other eligibility requirements. Applicants with a low credit score too can avail credit cards with certain caps on spending limits and more.

Don’t Let a Bad Credit Score Prevent you From Obtaining a Credit Card

There has been an exponential growth of credit card users in India over the last few years. This has also led to a rise in defaulters. Lenders are increasingly becoming wary of offering credit cards to applicants with a low credit score. It can ultimately tarnish one’s dream of building a good credit history and strong financial profile. 

While difficult, it is not an impossible task to attain a credit card. Start humbly by getting a secured credit card that has a reasonable limit. This will act as a boost to your credit score.

So how does a secured credit card work? A secured credit card is supported by a savings account. The account acts as collateral to your credit card. The card is easier to obtain. When used responsibly, it can improve the credit score within a short period and help you move towards getting better credit card offerings.

The primary thing to do is build a good credit history. Not only does it help build a good credit score, but also helps you build a robust financial profile. Getting a secured credit card is simple as there is no income proof required. Once you obtain a secured credit card, ensure that you maintain it and diligently pay off the debts to be on the way to a good score.

Conclusion

During current times, it is very plausible for someone to have missed an EMI payment or credit card bill due to the impact of the pandemic on the economy, such as unemployment or pay cuts and medical expenses. However, it is important to take measures to maintain a good credit score. A good way to do that is to get a secured credit card which is offered against fixed deposits as well. If there are any delays in a payment, the amount is removed from the consumer’s fixed deposit. By ensuring payment of credit in a timely fashion, one can even heal their poor credit score. You can avail credit cards to finance your expenses across a range of options on the Finserv MARKETS portal. These cards offer excellent discounts and offers, have stringent security measures and allow you to avail a number of other features and benefits including interest-free cash withdrawal. If you’re looking to finance larger personal expenses, the Personal Loan of up to Rs. 25 Lakhs on Finserv MARKETS can help you do so. With exceptionally fast processing times, and flexible repayment schedules at competitive interest rates, you can be assured that you will get the financing you need. 

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FAQs on CIBIL Score for Credit Card

  • ✔️What is a good CIBIL score for a credit card?

    A CIBIL score of 750 and above is considered as ideal by banks and Non-banking financial institutions. Even if you have a CIBIL score less than 750, it is possible that you can get a credit card. However, it might be possible that your application approval will be delayed and the card limit will be lower on the card.

  • ✔️Can I get a credit card with a low CIBIL score?

    Usually, banks accept a CIBIL score in the range of 700-750 and above to issue a credit card to an individual. However, there is no hard and fast rule to it as banks and financial institutions offer certain credit cards to individuals with low credit scores as well.

  • ✔️Can I get a credit card with a 560 credit score?

    The suitable or minimum CIBIL score which is required for most of the credit cards is 700. The applicants having a score below 700 might not get approval for a card at some of the top companies. However, most of the banks also offer credit cards to those who do not have a credit history or score below 700.

  • ✔️How does credit card affect CIBIL score?

    Your repayment history is the most important factor affecting your CIBIL score. Any default on loans and credit card bills is likely to negatively impact your score. But if you have paid all your equated monthly installments (EMIs) and credit card bills on time, you will be rewarded with a better credit score.

  • ✔️Is 800 a good CIBIL score?

    Scores above 800 are considered high and you can easily ask for a lower rate on personal loans and credit cards.However, for unsecured credit, the bank might investigate further or impose slightly higher rates.

  • ✔️What is the minimum CIBIL score required to avail a credit card?

    The CIBIL score limits required by each lender varies. Typically, leading banks in India consider a CIBIL score of 700 and above to be good. Having a higher score allows better access to lucrative financial products and services.

  • ✔️Will I get a card with a CIBIL score of less than 750?

    A CIBIL score that ranges above 700 is considered ideal by leading financial institutions. Even if you have a CIBIL score of less than 750, it is possible that you can get a credit card. However, it might be possible that your application approval will be delayed and the card limit will be comparatively lower. This means, even though you might get a credit card with a score of less than 750, it might not come with attractive offers. It is better to work hard on improving your low credit score to avail cards with lower interest rates and higher benefits.