October 2, 2024 · 11 mins read
Minimum CIBIL Score Required for Credit Cards: What You Need to Know
Santosh Kumar
Your CIBIL score short for Credit Information Bureau India Limited score—is a crucial factor that determines your eligibility for various financial products, including credit cards, loans, and mortgages. This three-digit score ranges from 300 to 900, with higher scores reflecting better creditworthiness. Essentially, it offers a snapshot of your financial behaviour, summarizing how responsible you've been with credit in the past.
Lenders and financial institutions rely on your CIBIL score to assess your lending risk. A high score can unlock favourable terms like higher credit limits, lower interest rates, and premium card offers. On the other hand, a low score can either lead to rejection or less attractive options such as higher interest rates or secured credit cards.
When it comes to credit cards, there is no one-size-fits-all answer regarding the minimum CIBIL score for credit card approval. Each lender has its own criteria, but generally, a score of 750 or above is considered ideal for obtaining a credit card with favourable terms. But, how to get credit card without cibil score? If your score falls in a lower range, don't worry—there are still options available to you, such as secured credit cards or basic entry-level cards with fewer perks. So, one can still apply for credit card with low credit score.
Whether you're aiming for a premium card or rebuilding your credit, we'll cover everything you need to know to increase your chances of approval.
Before diving into the minimum CIBIL score for credit cards, it's essential to understand what a CIBIL score represents. Your CIBIL score is a numerical summary of your credit history, calculated based on your credit accounts, repayment history, and credit utilization. It helps banks and lenders decide if you're a good candidate for a credit card or loan. The higher your score, the more likely you are to be approved and qualify for better terms, such as lower interest rates or higher credit limits.
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Applicants seeking access to credit cards do not face a universal condition of satisfying a minimum CIBIL score. However, nearly all lenders are interested in those who hold scores of 750 or higher and this is considered as the basic cibil score required for credit card. Such a range of scores denotes positive repayment behaviour to make borrowers eligible for more lucrative deals, among them premium credit cards. However, if downgrading to lower scores, those borrowers still have many remedies, such as following standard or secured credit cards. So, we need to explain how much cibil score required for credit card.
When it comes to premium credit cards, which come with features such as travel rewards, concierge service, and a large number of credits, one usually requires a CIBIL score of 750 and above. It is a score that reflects a good history in credit management, whereby all debts are paid on time, little if any borrowing remains unpaid, and there are no missed instalments during the borrowing period. As the companies that offer such premium cards will want to have little risk from the people, the score will be high.
Owning a premium card entails responsibilities such as a low balance-to-limit ratio and regular payments. For people with wonderful credit, these cards are certainly attractive since they feature low interest rates and a stronger rewards program. If your score is 750 or higher, you should expect the best rates, lower rates or fees, and higher cashback or rewards.
Even if you go lower than the recommended score, going between 650 and 749 on a CIBIL score still gives you more chances of getting a credit card, though the terms might not be as sweet as those up for grabs for higher-scoring borrowers. Within this range, you will most likely access normal credit cards, which are not too high, with normal rates of interest and not many extra benefits.
Although these cards are not regarded as gold, they can be helpful to those who have the urge to meet their expenses, only if you can control your payments on time and the amount of credit you are using. These cards meet all my everyday needs, as many people around this range do. However, the way to climb the credit ladder is not to over-borrow but to borrow and pay back all the time. Then, the scores improve, and more comfortable banking goods may be obtained.
A borrower whose CIBIL score is within 550-649 is considered a higher risk, and thus, lenders may not provide them with any unsecured credit. However, in your case, you are supposed to still be able to get subprime or secured credit cards. Generally, subprime credit cards will come with higher rates of interest, lesser limits of credit, and fewer offers. In contrast, a secured credit card has essentially a cash deposit that serves as security. Usually, the amount of the depositor acts as the credit limit of the borrower hence the lender's exposure is minimized. A secured card is an excellent way to improve a bad credit score. It is, though, worth remembering that to benefit from this, you have to pay each bill on the due date and use a lower amount that you plan to repay in a month. If this cycle continues, then with time, you will be able to raise your control score high enough to approve more than 650 using a secured card.
Read More:: RBI Guidelines for Credit Cards
Banks refuse to give loans to clients with CIBIL scores that are lower than 550. Such a score portrays either bad credit repayment behaviour or the absence of credit at all. At this point, it can be difficult to qualify for a traditional credit card. However, Applicants in this range will find that most lenders will deny their applications since there is so much risk involved. Still, not all hope is lost – you still have alternatives.
Secured credit cards for poor credit remain one of the surest ways of getting started on a credit makeover as long as they are handled wisely. Locking in a certain amount and using the card helps this type of credit user learn better credit behaviours with time and eventually improve his or her CIBIL score. In addition, some lenders provide credit-improvement products, such as credit-builder loans, to assist those seeking to enhance their credit. With time and responsible credit use, it is possible to enhance one's score so one can access better financial products.
Understanding the credit scenario is another thing, and maintaining the best credit profile possible, especially when it comes to applying for credit cards, is quite critical. Here are a few useful tips that can help you grow your credit timeline and, hence, benefit your credit score required for credit card.
Applying for a secured credit card can be a good idea for people new to credit or struggling with a low CIBIL score. While traditional credit cards extend credit on the basis of available creditworthiness, secured cards require a cash deposit, which usually serves as a credit limit. This arrangement reduces the chances of loss of the lender while giving you a chance to show the lender that you can repay a credit limit. It is advisable to use a card with small credit amounts and pay all of it in time every month to create your credit history.
Read More:: What is the best CIBIL Score
An increase in the credit accounts or the types of accounts that the borrower has improves the CIBIL score. A person should also engage in a credit mix by taking an unsecured personal loan or an auto loan apart from the use of a credit card to the person. A borrower with a diverse portfolio shows the creditors that he/she can handle different credit types. But be sure that you are comfortable with the extra payments so that you do not miss any deadlines because of them.
The period during which your accounts have existed is one of the key parameters that are taken into consideration when calculating your CIBIL score. If you have some old credit accounts that are not in use anymore, take a few seconds to reconsider closing them. Doing so will boost your scores as it will help increase the average age of your accounts. Just make sure that you don't incur any costs to manage these accounts.
Credit utilization, which is how much credit extended to you is exhausted compared to the total credit that is available to you, contributes significantly to your CIBIL score. Make sure that your credit utilization ratio is less than 30 %. If you hold any existing balances, you could pay them down to enhance this credit utilization ratio, or you could apply for a higher limit on your existing cards aimed at maximizing the credit available to you. Just remember that the increased limit should not translate to increased credit spending.
Read More:: Credit Card Against Fixed Deposit
To obtain a credit card, one needs to have a good CIBIL score, and the lowest score that one should maintain usually depends on the type of card one is pursuing. For instance, it is ideal to have a score of 750 or above for premium credit cards. However, a customer with a score of 650-749 can still qualify for a standard or secured credit card. On the other hand, for the more unfortunate credit scores, working towards low credit and better credit behaviour, for example, by making timely payments and maintaining low credit use, is what you should do to be able to get better credit products in the future.
There's no need to be concerned if your score slips down below the necessary minimum for regular credit cards. Secured credit cards and credit builder loans are alternatives that will enhance your credit and help you attain your financial goals. As you always keep in mind, the CIBIL score simply measures your use of credit, and thus, not controlling how you use your credit solely based on your score would be a dangerous precedent and should not be practised.
Is there a minimum CIBIL score needed to get the credit card? If you consider web credit cards, you should
As most lenders usually want a minimum score of 750 to provide a credit card, there are other options for applicants with scores of 650 and above who can be approved for standard or secured cards.
Can a credit card be acquired with a CIBIL score of below 550?
Yes, it is possible to apply for a credit card with a bad score of less than 550, but the cards will be limited. The process involves a cash deposit that serves as security for the borrower's debt.
What steps can I take to increase my CIBIL score so I can be granted a credit card?
To boost your CIBIL score, it helps if bills are paid in good time, unpaid debts are lessened, and credit usage is limited. Addressing any mistakes that may be present on your credit record on a regular basis can also prove to be quite instrumental.
Do such credit cards for low CIBIL scores exist? If yes, please explain.
Yes, secure credit cards or subprime credit cards are some of the credit card products offered by numerous lenders. Subprime cards or lenders target getting secured credit card MDS scores.
How long does it take to raise my CIBIL score?
Depending on your credit report and how well you manage your finances, improving your CIBIL score usually takes a few months to a year. Timely payments and lowering debt will shorten this timeframe.
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