Do you have multiple additional expenses that you cannot cover with your income alone? Are you also willing to go for studies abroad or purchase your dream vehicle but feeling held back by a limited salary? Credit cards are a promising option that comes to mind. However, a good credit score is typically required to qualify.
But what if your credit score isn’t up to the mark? So, can you apply for credit with low CIBIL score? Yes, this article will guide you on how to get a credit card with a low CIBIL score and make your financial goals a reality.
Understanding the importance of the CIBIL score
The CIBIL score of an individual is a numerical representation of their creditworthiness on the basis of their credit history. Credit score falls between 300 to 900, and a higher score represents lower credit risk and vice versa. Lenders, including financial institutions and banks, check this score to assess your repayment capacity and credit history when you apply for a loan or a credit card.
Thus, the CIBIL score, also known as the credit score, is important in examining the capacity of an individual to repay a credit card bill or loan. At times, certain circumstances, like not having a strong financial background or poor credit history, might reduce your credit score, which later stands as a challenge to getting a credit card.
Tips to improve your low CIBIL score
Before you apply for a credit card, begin by analysing your present financial situation. Firstly, get a copy of your credit report to acknowledge the reasons for your low credit score. Several lenders and banks connect with third-party companies to verify your credit history. Acknowledge any errors or discrepancies in your credit report and rectify them, as it might improve your score. Other major tips that you must follow to enhance your credit score before applying for a credit card are as follows:
- Repay all your present loans on time, such as vehicle, home or personal loans.
- Do not extend your credit limits on any existing credit cards.
- Cross-check all the errors on your credit report and resolve them as soon as possible.
- Do not apply for several credit products at a single time.
- Make sure to maintain an appropriate credit utilisation ratio that falls below 30% of your limit.
- Have a stable job profile for a minimum of 2–3 years
- Monitor your credit score reports on a regular basis to maintain your credit score.
How to get a credit card with a low CIBIL score?
To get a credit card with a low credit score, follow the tips below:
Apply for secured credit cards
Secured credit cards are the perfect credit card option for people with a low credit score. Secured credit cards, unlike the traditional ones, need a security deposit that serves as collateral. Usually, the credit limit is specified by the security amount deposited. By using a secured credit card with full responsibility and ensuring you make timely payments, you can rebuild a good credit score.
Supplementary or add-on cards
If you have a spouse or a family member who holds a good credit score, you can also prefer the option of applying for a supplementary or add-on credit card. As the primary cardholders stay responsible for the payments, banks can be lenient while issuing such cards to individuals with low credit scores. However, you must use these cards wisely and avoid any negative effect on the credit score of the primary cardholder.
Explore credit card options for low credit scores from your bank
Many financial institutions and banks provide credit cards to individuals with low credit scores. However, these cards come with a higher rate of interest and lower credit limits. But, these credit cards are a stepping stone towards enhancing your creditworthiness. Carefully research and compare all the features of such credit cards and then apply the one that suits you the best.
Maintain financial stability
Lenders do not depend on your credit score alone. While issuing you a credit card, they also consider other major factors such as employment, history and income stability. By presenting valid proof of regular income through your bank statements, salary, slips, or income tax returns, you can strengthen your credit card application. Furthermore, reducing your present loans and maintaining a good debt-to-income ratio can boost your chances of credit card approval.
Summing up
Getting access to a credit card with a low credit score might seem quite challenging, but it is not impossible. Carefully understand your financial situation and requirements and explore multiple options. By showing responsible financial behaviour, you can enhance your creditworthiness and get a credit card even with a low credit score. Remember that it takes patience and time to rebuild your credit, but with consistency and timely payments, you can achieve your financial goals.
FAQs on Credit Cards
1. Can I get my credit card application approved even with a low credit score?
Even with a poor credit score, you still have multiple credit card options available. Secure credit cards are the major options that you can find accessible to avail a credit card.
2. What is the lowest limit of a credit score?
The scoring system of a credit score falls on a scale of 300 to 900. Hence, 300 is the lowest and 900 is the highest credit score.
3. Can I get a 0% credit card with a bad credit score?
In most cases, to qualify for a 0% intro APR credit card, you must have an excellent or a good credit score.
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