People with a Low CIBIL Score Can Still Get a Credit Card: Here’s How

Posted on Thursday, February 1st, 2024 | By IndusInd Bank

Having a low CIBIL score does not necessarily mean that one cannot get a credit card. There are some credit card options for individuals with low or no credit history. This article will discuss the various possibilities of getting a credit card even with a low CIBIL score.

Credit Cards for Low CIBIL Score

There is no minimum CIBIL score for a credit card. But if your CIBIL score is below 750, you may find it difficult to get an unsecured credit card from most banks. However, there are some credit card options available for such applicants.

FD-Backed Credit Cards

One of the main options available is fixed deposit (FD) backed credit cards. With these cards, you need to maintain a fixed deposit with the bank that acts as collateral against the credit limit. The credit limit provided is usually a percentage of the deposited FD amount, usually around 60-70%.  For example, if you deposit an FD of Rs. 1 lakh, the likely credit limit provided could be Rs. 60,000 – Rs. 70,000. The advantage is that even with a low CIBIL score, you can get a credit card as long as you maintain the required FD amount. Low credit limit cards 

Some banks may consider applications for credit cards even with low CIBIL scores but will only provide a very low credit limit initially. Over time and with timely repayment, you can look to increase the credit limit through upgrade offers from the bank.

Co-Signed or Family Credit Cards

A co-signed or family credit card allows cardholders to add their family members as additional cardholders to their existing credit cards. This is beneficial for individuals who are not eligible to get a credit card as a primary holder. They can leverage the good credit history and repayment track record of their family member and access their credit card and its benefits. The family member acts as a guarantor for timely repayment.

How to Increase Your Credit Score for Availing a Credit Card?

If you are looking to get a credit card but have a low score currently, here are some tips to improve it –

• Make timely repayment of all existing loans such as personal/home/vehicle loans.
• Avoid maxing out credit limits on existing credit cards.
• Check for any errors on a credit report and get them resolved.
• Limit applying for multiple credit products at once.
• Register for CIBIL reports regularly to monitor the score.
• Maintain a healthy credit utilization ratio below 30% of the limit.
• Show regular savings/investments in bank statements.
• Maintain a stable job profile for at least 2-3 years.
• Build a relationship with the bank for 6-12 months.

Regularly tracking and maintaining a good repayment discipline could help boost the credit score by 50-100 points within 6-12 months in many cases. This makes you eligible for better credit card options from more banks.

Documents Required for Credit Card Application

The basic KYC documents required for a credit card application include, but not limited to –

–              Address and identity proof like an Aadhaar card, Voter ID, Passport etc.
–              Recent salary slips (last 3 months) 
–              Form 16 or ITR for Income proof.
–              Bank account statements (last 6 months)
–              Existing credit report
–              In the case of FD-backed cards, proof of maintained FD

IndusInd Bank offers a 100% digital and paperless credit card application process. You can easily apply for a credit card online in three simple steps and get instant approval.

Conclusion

Having a low CIBIL score need not bar individuals from getting a credit card. With options like FD-backed cards and gradual improvements to credit profiles, you as an applicant can start building your credit history responsibly. Proper management of repayments is important to gain higher eligibility for other credit products going forward. Regular score tracking and dispute resolution help optimize the credit score over the long term as well. You can check offerings from IndusInd Bank for free lifetime credit cards with the best offers. From a completely digital application process and instant approvals to exciting cashback and comprehensive insurance coverage, IndusInd Credit Cards offer a range of benefits.

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Disclaimer: The information provided in this article is generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. Hence, you are advised to consult your financial advisor before making any financial decision. IndusInd Bank Limited (IBL) does not influence the views of the author in any way. IBL and the author shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information.