In order for a consumer to be considered for a credit card, they must have a good credit score. Any score above 700 out of 900 is considered a good credit score. The eligibility criteria while applying for a credit card may vary asking for certain information such as income, occupation, residence and more, as there are some institutions that offer credit cards to those with low credit scores as well.
Banks always inquire into a consumer’s CIBIL score at the time of receiving a credit card application. In order to build a credit, one would need to apply for a loan or a credit card, which is not offered by many banks to those who are new.
Documents such as one’s PAN card and other KYC details are required while applying for a credit card. A PAN card not only provides ID proof but allows the bank to check for one’s CIBIL score and report. This is considered a hard inquiry and if the application is rejected, the CIBIL score may go down.
While applying for a card remember to check for your own CIBIL score to be above 700. If you are new, a credit card is a good first step to take in creating a credit score so that banks can take note of your credit behaviour and payment habits. However, a rejected application may adversely affect your score.
Possible reasons that your credit card may have been rejected are as follows:
A large quantity of debt, in spite of timely payments.
A short credit history, which means they may not be able to rely on your credit score as of yet.
Recent faulty payments or delays.
Unstable employment which means unstable income.
An incomplete or incorrectly filled in application form.
A Credit Information Bureau India Limited Score or CIBIL score is a three-digit number that reflects the consumer’s credit score. It is a summary of their credit history based on prior credit behaviour such as borrowing of money, repayment of the same in different situations, information given by banks and institutions that have lent money to the consumers.
A CIBIL report details all the transactions made by the individual with respect to loans, credit cards, repayment of debts or borrowed amounts, any outstanding payments and the number of days past the due date. The report also contains the individual’s personal information, contact details, employment history and details of the loan. A CIBIL score check is performed in tandem with the report to get a good idea of someone’s eligibility for a loan or credit card.
Typically, a CIBIL score ranges between 300 and 900 but the closer the score is to 900, the more likely one is to get approvals on a credit card or a loan application.
A CIBIL score is a credit score based on data collected in the previous 36 month period.
There are four important factors that influence a consumer’s credit score
A mixture of credit including secured and unsecured loans
However, there has been a recent update regarding the algorithm with which a CIBIL score is calculated to also include the depth of credit, that is the amount of time that one’s credit history may exist beginning from when the oldest credit account was created. Additionally, it includes the trend of outstanding balances in the long run, history of transactions with one’s credit cards, the ratio of amounts borrowed to the amounts repaid and any accounts that have been opened or closed.
A credit score plays a big role in loan approvals and credit card applications, therefore, it is always a good idea to do a quick CIBIL score check before applying. An easy way to check one’s CIBIL score is by using the Finserv MARKETS online portal and your PAN card. Follow these easy steps:
Use the online portal provided by Finserv MARKETS, visit “Credit Score” and complete the required details.
An OTP will be generated and sent to both the registered email ID and phone number, fill in the same on the website to verify your identification.
A detailed Financial Health Check Report(FHCR) will be presented which will also include your CIBIL score.
A CIBIL score check through Finserv MARKETS is considered a soft-inquiry, and it won’t affect your credit score.
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.
Ever considered quantifying your financial health in specific parameters? With the Financial Health Check Report (FHCR) on Finserv MARKETS.
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.
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.
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.
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.
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.