There is no denying the fact that with the advent of credit cards, life has become easier for individuals with regard to availing things and paying for it at a later date. As such, it has become an indispensable part of an individual’s life. The use of credit card has varied with the passing of years and is currently regarded as one of the deciding factors of a good credit score. Moreover, the card enables the cardholder to improve his/her budget as well as their credit rating, if used effectively.
CIBIL score which is also known as credit score is generated after the Credit Information Report (CIR) summarizes the payment history of the individual’s payment history of loans and credit cards that he/she might have availed from banks and financial institutions. It is a three-digit number that ranges between 300 and 900. The closer the number is to 900, the stronger is the credit profile of the individual.
Banks and financial institutions check the CIBIL or credit score of the individual before issuing credit cards in their names is because credit cards are a form of unsecured lending that banks in the country provide to the applicant based solely on the applicant’s creditworthiness. Banks avoid providing individuals with credit cards who have a bad history of repaying loans or has a bad credit history as it involves the risk of defaults which can ultimately lead to losses for them. As such, banks use the simple way to looking at the credit history of the individual in a bid to ascertain whether he/she is financial capable of handling a credit card without defaulting on the payment due. All the credit reports and scores of the individual who has requested for a credit card are provided to the bank by TransUnion CIBIL Limited when the bank requests the information. Banks analyse the individuals record of late payments and defaults as well as the records of any loans or credit cards that might be currently held by the individual by checking their credit score. Through the CIBIL score, banks gauge the individuals diligence towards paying credit card bills. It needs to be mentioned that there have instances when banks have considered having no credit history also as poor credit history.
As mentioned earlier, CIBIL scores of individuals are generally in the range of 300-900. To have a good CIBIL score, it is always better to have a number that is close of 900. Ideally, a good CIBIL score for a individual falls in the range of 700 and above. However, to pinpoint precisely as to what is the minimum CIBIL score required to avail a regular credit card is a tough ask as most banks and financial institutions follow a similar pattern. 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 score as well.
For an individual who has no CIBIL score or has a low CIBIL score, it is quite difficult to get a regular credit card, however it is not impossible.
To get a regular credit card without having a CIBIL score, an individual can try doing the below mentioned things:
Doing the above mentioned things can help an individual in availing the benefits of a credit card without having a CIBIL score as well as enable them in building their CIBIL score to help them avail a regular credit card. Though there are ways to avail a credit card without even having a CIBIL score, it is better to use the options only to build up one’s credit score to avail other credit facilities provided by banks and financial institutions that exist in the country.
An individual can build his/her CIBIL score without possessing a credit card by availing a secured credit card, add-on card, prepaid credit card etc and using it properly.
Yes, credit card usage does affects the CIBIL score of an individual. If the credit card is used well, the CIBIL score is built up. If it is not managed well, the CIBIL score takes a hammering.
No, it does not. However, if the EMIs are not paid on the due dates it does have an impact on the CIBIL score.
You can increase the credit limit my making sure that you handle the credit responsibly. On doing so, the credit limit is increased automatically by the credit card issuers. You can also request for the credit limit to be increased by contacting the credit card issuer.
Yes. However after availing the credit card the individual needs to make sure that the credit card is used responsibly with the utilization percent preferably kept to 20-30 percent of the available credit limit.
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