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Applying, availing, and managing a credit card is one of the easiest ways to build and improve your CIBIL score. Applicants need to maintain a good CIBIL score for hassle-free credit card approvals provided all other criteria are fulfilled. However, the minimum CIBIL score required shall vary from lender to lender.
Applicants with high CIBIL scores are considered credit-responsible and have higher chances of getting their credit applications approved. Therefore, let us understand how your CIBIL score defines the credit card approval process and in meeting the eligibility criteria.
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Impact of CIBIL Score on Credit Card Approval
To be eligible for a credit card, the applicant should mostly have a good credit score. Usually, any credit score above 750 and closer to 900 is considered good by financial institutions. Several banks do accept a credit score between the range of 700-750 for credit card approval.
Few banks also consider the approval of credit cards for applicants with even low credit scores. However, applicants also need to meet other eligibility criteria defined by the lender in terms of age, income, occupation, residence, credit history, etc. to avail new credit.
Generally, banks and NBFCs do check CIBIL scores before the approvals of credit card applications. Applicants who are New to Credit or with No Credit History may apply for secured credit cards (credit cards against fixed deposits) and start building their CIBIL score.
Suggested Read: Best Credit Cards for Beginners in India
While applying for credit cards, applicants need to submit their valid PAN card and other KYC documents for processing. A PAN card is considered an essential document by banks and financial institutions to check the applicant’s credit score and report.
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Minimum CIBIL Score for Credit Card Approval
The minimum CIBIL score requirement for different card issuers or lenders shall vary from product to product. Usually, the minimum CIBIL score considered by various lenders for credit card approval is 750 or above.
However, the generated credit scores shall vary, as per various credit bureaus, such as TransUnion CIBIL, Experian, Equifax, and CRIF High Mark. Most of the lenders consider TransUnion CIBIL score for loans and credit card application approval.
Why do Banks/NBFCs Check Credit Scores for Credit Card Approvals?
Since credit cards are unsecured and no collateral/security is required to be submitted by the applicant, so the banks have to take higher risks when issuing credit cards to customers. This is why they need to check whether an applicant is capable of taking up a new debt.
A credit score is a clear indicator of the applicant’s payment history, debt repayment behavior, and credit utilization.
When an individual applies for a credit card and submits the documents, he/she allows the bank/NBFC to initiate a hard enquiry on his/her credit profile.
The bank would get to know the individual’s Credit Utilization Ratio (CUR), credit history, number of active accounts with past payments, missed payments, Days Past Dues (DPD) in this account, etc. If not satisfied or convinced with the credit report, lending banks can reject their credit card applications.
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Know Why Even Good Credit Score is Not Enough
Banks keep modifying the approval criteria for their credit cards. Some common reasons why one may be denied a credit card even after maintaining a good credit score are as follows:
- High existing EMI to NMI ratio
- Too much debt (even if one pays them off on a regular basis)
- Higher Credit Utilization Ratio
- Short credit history
- More unsecured loans as compared to secured loans
- Recent delayed payments, DPDs, or other negative entries in the credit report
Credit Cards for Applicants with Low Credit Scores
At times, one may miss loan EMI or credit card bills due to genuine reasons like unemployment or medical emergencies, leading to delay or default on payments. In such a case, one needs to take additional steps to get approved for a credit card with a low CIBIL score.
A good way to start rebuilding credit is to get a secured credit card without a CIBIL score. Secured credit cards are offered against Fixed Deposits. At the time of delay in payments, dues are redeemed from the credit card holder’s fixed deposit. Timely payments over some time can heal faulty credit histories.
Best Secured Credit Cards in India
Secured Credit Card in India is a card that is mainly issued against the Fixed Deposit of the applicant. Below mentioned are the Top 5 Secured Credit Cards in India:
- Paisabazaar Step UP Credit Card
- SBI Card Unnati
- Axis Insta Easy Credit Card
- Kotak 811 #DreamDifferent Credit Card
- ICICI Bank Instant Platinum Credit Card
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Minimum CIBIL Score for Credit Card Approval FAQs
Q. What CIBIL Score is needed to get a credit card?
Ans. Card issuers would prefer good credit scores, usually above 700. In rare cases, you could also get a card with a fair score if you have an existing relationship with the bank or if you meet the other criteria set by the bank.
Q. I have no CIBIL Score. How will I get a credit card?
Ans. There are a few banks that offer credit cards to people who are new to credit or with no credit history. To build your credit history or credit score, all you need to do is apply for a secured credit card. Secured credit cards are issued against your fixed deposits.
Q. Do I have to pay to check my CIBIL Score?
Ans. No, at Paisabazaar.com, you get free access to credit scores with monthly updates. Check your CIBIL report here with no impact on your credit score.
Q. Does having multiple credit cards improve your credit score?
Ans. Your number of credit cards is also taken into consideration at the time of evaluating your credit score, as multiple card usage may lead to a lower credit utilization ratio. If your expenses remain constant while using two credit cards, then your credit utilization may reduce, if your monthly credit limit is increased by the usage of multiple credit cards. Therefore, it may help to gradually improve your credit score.
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8 Comments
I Have Filled ITR NOW MY CREDIT SCORE WILL IMPROVE
Your credit score depends on your credit behaviour and not on your ITR. If you follow a disciplined credit behaviour, your credit score shall improve over time.
Credit card chahiye high limit 500000 limit chahiye
Your credit card limit is decided by the bank/credit card provider. You may however, request your provider for a higher limit at the time of application.
Issue my credit card without cibil score
You can apply for an entry-level credit card or a secured credit card as these can be issued to people who are new to credit.
I have 639 credit score under TranSunion, & I approached SBI, Dhemaji Branch, Assam for vehicle loan but the SBI requires 650 credit score, which is 11 short of required credit score, I have one loan account which I have been unable to pay.
How can I improve within this month ?
Your credit score will not improve overnight. You need to clear all debts and repay the dues on time regularly to start rebuilding your credit score.