By OneCard | May 30, 2023
Credit cards make paying for things a little easier, more rewarding, and also help build your credit score. But did you know your CIBIL score can make quite the difference when it comes to applying for a credit card?
Credit card companies use your CIBIL score to determine your creditworthiness and ensure if you are a high or low-risk borrower. A high CIBIL score (750 and above) increases your chances of unsecured credit card approval. On the other hand, getting an unsecured credit card with a low CIBIL score can be difficult.
Let us understand in detail CIBIL and its role.
Your CIBIL score is a three-digit number that shows how creditworthy an individual has been, calculated by TransUnion CIBIL, India’s leading credit information bureaus. The score ranges from 300 to 900, where a higher score indicates a better credit profile and makes it easier for individuals to obtain credit. Evaluating the CIBIL score for an unsecured credit card is important for issuers to assess the risk of lending to you.
The CIBIL score is important for an unsecured credit card application for the following reasons.
It helps the issuer know your creditworthiness and assess the risk of issuing a credit card to you.
A higher CIBIL score increases your chances of getting a credit card with relative ease and a higher credit limit.
Credit card companies may offer a card with more credit card rewards, benefits, and exclusive offers to individuals with a high CIBIL Score.
A consistent healthy credit history increases the chances of qualifying for more loans and credit cards.
Generally, there is no minimum CIBIL score required for a credit card as each issuer has a different requirement. However, a CIBIL score of 750 or above is considered excellent to get a credit card and makes it possible to get desired terms and conditions as well. On the other hand, individuals with a score below 600 may find it challenging to get approved for a credit card, and even if they are approved, they may have to pay higher interest rates should they fail to pay before their billing date.
A CIBIL score plays an important role in approval, credit limit and terms and conditions.
As described above, your CIBIL score impacts your eligibility for a credit card (only unsecured credit card). Credit card companies use your credit score to evaluate your creditworthiness and assess the risk of lending you money. A high credit score indicates responsible credit behaviour, increasing your chances of getting approved for a credit card with better terms and conditions, such as lower interest rates, higher credit limits, and better rewards. On the other hand, a low credit score may lead to the rejection of your credit card application, or they may have higher interest rates and fees. It is important to maintain a good credit score to increase your eligibility for credit cards.
It is important to have a good CIBIL score to be eligible for different forms of credit. Some ways in which you can improve your CIBIL are:
ALSO READ: Understanding Credit Card Repayment
Before you apply for a credit card, keep the following in mind.
It’s always a good idea to know your credit score, and you can do this for free with CIBIL, once a year. However, if you intend to be on a more regular watch, you can get your credit score and report for free at OneScore as well. Now in case you don’t have a credit history to begin with, you can start scripting it now, with a OneCard Credit Card. All you need to do is open an FD and you’ll have yourself a full-stack metal credit card replete with benefits to begin your credit-building journey with.
**Disclaimer: The information provided in this webpage does not, and is not intended to, constitute any kind of advice; instead, all the information available here is for general informational purposes only. FPL Technologies Private Limited and the author shall not be responsible for any direct/indirect/damages/loss incurred by the reader for making any decision based on the contents and information. Please consult your advisor before making any decision.