How to apply for a credit card despite a poor Cibil score
Credit cards have made our life easy because, with the help of credit cards, people can buy stuff and make payments later on. As such, it has become such an essential part of individuals.
With the cost of living and spending rising, people save less money. However, this can be sorted with the help of a credit card.
So if you wish to have a credit card, you must have a good credit score to ensure that you will be able to pay the money you will borrow.
With passing years, credit cards have become one of the deciding factors of any individual’s credit score. Moreover, using this card effectively will help increase the credit score and purchase stuff. Credit cards were considered as luxury previously, but now it has become an essential need in recent times as everything is done online after the pandemic COVID-19.
Credit cards are beneficial financial tools available today, and it allows you to buy your favourite goods and pay for them later.
In this article, we will understand how you can apply for these cards despite a bad credit score.
What is the Cibil score
Cibil score is also called a credit score. A credit score is generated after the Credit Information Report (CIR) describes the individual’s payment history of loans and cards that they may have obtained from banks and financial organizations. The Credit Information Bureau (India) Limited (CIBIL) is the most well-known of the Reserve Bank of India’s reporting companies.
The average range is from 300 to 900. The closer the figure is near 900, the better the individual’s credit profile.
What is a poor Cibil score
Many rating agencies provide a cibil score to every individual; some could be paid and some unpaid. It is a three-digit score, and it is evaluated by the agencies depending upon the individual’s financial history and transactions.
If your credit score is less than 600, it would be considered a bad score, and most lenders prefer to give credit to candidates who have a score of 750 or above. Having a bad score means that your transaction history is not good, and you have made wrong decisions regarding repayment history.
Causes of poor or bad cibil score
A person’s credit score is a measure of their financial health. Many things can affect the score of any individual, and they can reduce the cibil score and consider the individual an unsuitable candidate for any loans or credit cards.
The ominous score is the result of your bad credit management. There are some points mentioned because of which person could have a bad score-
- Late payments on your credit cards and loans
- Payment defaults/missed payments on your loans and cards
- Accounts that have been written off or that have been settled
How can you Get A Credit Card without a Cibil Score?
Usually, banks or lenders provide credit cards to people with good credit or Cibil scores. However, there are other ways to get a card without a lousy score.
1. Get a secured card
This is a very easy way to get a credit card if you have a terrible score. Those who have low credit scores can possess an unsecured card. To build a credit score for any individual, it is advised to get a secured card. To obtain a secured card, an individual must first open a fixed deposit account with the bank from which the secured card is to be obtained and make payment. The bank will provide the card to the individual according to the bank’s terms and conditions.
2. With the help of a savings account
Some major banks exist that provide cards against saving accounts. This is also an excellent way for any individual who wants a credit card. All you need to do is just deposit some money to the bank, and then the bank will offer you a card; in this way, you can get a card despite a poor score.
3. Get a prepaid card
If you do not possess a cibil score and want to get a card from any financial institution, this could be a great option. Banks offer prepaid credit cards if you have a bad cibil score or don’t have any score. For this, all you need to do is deposit some amount of money, and then you can use it as you use any other prepaid mobile services.
With the help of the ways mentioned above, any individual can get a credit card without a Cibil score.
An individual can get all the benefits without having a CIBIL score, as well as improve their score to obtain a conventional credit card.
Though it is possible to obtain a card without a CIBIL score, it is preferable to use these choices to improve one’s score to access other credit facilities offered by banks and financial organizations. We highly suggest you take the necessary steps to enhance your credit score to qualify for better cards at the best rates in the future.
Edited by Prakriti Arora