CIBIL Score for Credit Card

Thorough research shows that CIBIL scores play a crucial role in credit card approvals. A higher score improves the chances of approval and may lead to better benefits, such as higher credit limits and lower interest rates.

 

Lenders assess credit scores to determine an applicant’s repayment capability, particularly for unsecured credit cards where the risk of default is greater. A score near 700-750 reflects responsible credit management, assuring lenders of timely repayments and financial stability.

A CIBIL score of 750 or above is considered excellent and is usually sufficient to get your credit card application approved. Notably, card issuers also consider other details on your CIBIL credit report, such as how many credit cards you already have.

 

Some other factors are payment delays, your debt-to-income ratio, etc. Depending upon these other factors and your relationship with the card issuer, you might also get a credit card even if your CIBIL score is less than 750.

 

However, if your score is less than 700, it may prove difficult to get a credit card.

Your CIBIL score directly impacts the chances of approval of your credit card application. The higher your CIBIL score, the more likely it is that your credit card application will be approved.

 

Refer to the following table to get an idea of how the approval of your credit card application depends upon your CIBIL score:

Banks and NBFCs check CIBIL scores to assess an applicant’s financial behaviour and repayment capacity before approving a credit card. As credit cards are unsecured credit products, lenders need to minimise the risk of defaults. A good CIBIL score assures them of responsible credit usage and timely payments. 

 

Below are the reasons why your credit or CIBIL score is one of the primary eligibility criteria 

• Assess Creditworthiness

A high CIBIL score reflects responsible financial behaviour, indicating that applicants are more likely to repay dues on time. It helps issuers evaluate the applicant’s creditworthiness before approving a credit card.

• Minimise Risk of Default

As credit cards are unsecured, issuers rely on credit scores to assess the risk of non-payment. A low score may signal a higher likelihood of default, influencing the approval decision.

• Determine Credit Limit and Interest Rate

A strong credit score enables applicants to secure higher credit limits and lower interest rates. Issuers use this information to tailor credit offerings based on the applicant’s financial profile.

• Ensure Responsible Lending

Checking credit scores allows banks and NBFCs to make informed decisions, promoting responsible credit distribution. It ensures credit is extended to individuals who demonstrate financial discipline.

Even with a low CIBIL score, getting a credit card is still possible. Here are some options to get credit cards for a low CIBIL score:

Secured Credit Card

One of the simplest ways to get a credit card with a low credit score is through a fixed deposit. The fixed deposit serves as collateral, and the credit limit is determined by its amount. In case of missed payments, the bank has the right to recover the outstanding amount from the deposit. 

Student Credit Card

Student credit cards are less common, but some banks offer them. These cards generally come with a low credit limit, aligned with students' financial needs. To get a student credit card, students need to provide proof of:

• A part-time job

• A Fixed Deposit or Savings Account

Add-on Credit Card

An add-on credit card is linked to a primary cardholder’s account. Those with an existing credit card can apply for an add-on card for a family member, such as a parent, spouse, or sibling. Banks typically do not check the credit score of the added member.

A good credit score requires proper financial habits. Here are some key practices to help increase it:

Make Payments on Time

Paying credit card bills on time is crucial. Many issuers offer apps with reminder features, which can help avoid late payments.

Use Multiple Credit Cards

Holding both secured and unsecured credit cards demonstrates the ability to manage different types of credit responsibly. Although challenging, it can improve the chances of approval.

Avoid EMIs for Small Purchases

Opting for EMIs on small items, such as shoes, can result in forgotten payments. It is essential to set reminders when using EMIs to ensure timely repayment.

Monitor Your CIBIL Score Regularly

Checking the CIBIL score report every other month helps track financial health and make necessary adjustments to spending or repayment strategies. Regular checks do not affect the credit score.

Checking your CIBIL score is simple and requires just a few steps. You can do this through the official CIBIL website. Here is how:

1. Visit the CIBIL website

2. Enter the required information and click ‘Continue’

3. Provide additional details, such as your PAN number

4. Respond to queries regarding instant loans and credit cards

5. Log in using the provided password

6. Once logged in, access your CIBIL score from the dashboard