Cibil Score for Credit Card - IndiaLends.com

Cibil Score For Credit Card

A credit score is a numeric expression that helps in assessing your creditworthiness. In simple words, it is a score given to a customer on how he/she is managing his/her finances. A credit score ranges between 300-900 where 300 is considered to be a poor credit score and 900 is the perfect credit score. In India, there are four credit bureaus, namely:

  • CIBIL
  • Equifax
  • Experian
  • Highmark

Although the algorithms differ from bureau to bureau, a credit score above 750 from any of the credit bureaus is considered to be an excellent credit score and can give you easy approval on credit cards or any other forms of credit.

Credit Score Range

Range Type

Score Range

Excellent

750 & Above

Good

700 & 749

Average

650 & 699

Poor

550 & 649

Bad

Below 550

All About Credit Cards

Also known as plastic money, a credit card enables customers to purchase products and services on credit. The customer can later repay the money before the due date or can convert them into easy EMI’s and pay it off in the stipulated time period. If used properly, they can help you save a lot of money with the help of reward points.

Why do lenders check your credit score before approving for credit cards?

As mentioned above, a credit score helps you know the financial standing of a customer and since a credit card is a form of credit provided by banks and financial institutions, it is important for them to assess the credibility of the customer before approving a credit card application.

Here are a few things that a creditor looks in a credit report:

  • Payment History The payment history helps in analyzing how timely you make your payments and whether you have ever made any defaults. This gives a clear idea of how responsible you are when it comes to handling your debt.
  • Credit Score If a lender wants to know whether or not you are good with your finances, it will just have to check your credit score. A credit score of 750 and above will help you to get credit card approvals.
  • Bankruptcy/Settlement A bankruptcy or settlement is a piece of negative information that will stay in your credit report for 7 years. As the information gets older, the impact of the same is reduced. A lender would want to know if you have ever declared bankruptcy or settled a loan before approving your credit card application.

Minimum CIBIL score needed to get a credit card

The range of CIBIL score is from 300-900 where 300 is poorest and 900 is the perfect credit score. Any score above 700 can get you approval on credit card applications although this can vary on card basis. Moreover, your credit limit can also be determined after looking at your credit score. Please note credit score is not the only criterion for a credit card. In fact, an individual with no credit score can get a credit card if he/she meets other requirements which are as follows:

  • Age- The age of an applicant must be at least 18 years of age.
  • Income- Whether salaried or self-employed, the applicant must have a regular source of income.
  • Credit history- The applicant must have a good credit history. In the case of New-to-credit(NTC), the applicant must have a good source of income.

Please note that all banks do not cater to the requirements of an NTC.

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How to improve your chances to get a credit card?

The following are a few ways you can improve your chances to get a credit card:

  • Pay off your existing credit card debt

    If you have existing credit card debt, it is best to clear it before you apply for a new credit card. Since the creditor would assess your payment history, if they notice outstanding debt in your credit card account, it might reduce your chances of credit card approval.

  • Apply for the right card

    Every credit card has a different set of eligibility requirements. Which is why you must check whether or not you are eligible for the particular credit card. For instance, it is not necessary that an individual who got approved SBI credit card will get approval on American Express credit cards.

  • Space out your credit card applications

    Don’t try to apply at too many institutions at the same time. It is important to space out your credit card applications to avoid being shown as if you are credit hungry. This will also reduce the impact on your credit score.

  • Clean your credit report from negative information

    If you have a bankruptcy or settlement marked on your credit report, try to pay off the amount before you plan to apply for a credit card. This will give the impression that you are a responsible customer and improve your credit card approval chances.