Credit Card for Low Credit Scores in India: Credit cards have revolutionised financial transactions, offering convenience, security, and flexibility in managing finances. They enable users to make purchases, access credit, and establish credit histories through their credit scores. A credit or CIBIL score, represented by a three-digit number, reflects an individual's financial behaviour and credit history, playing a crucial role in determining creditworthiness. In India, CIBIL (Credit Information Bureau (India) Limited) is a leading credit bureau that evaluates the creditworthiness of individuals and companies based on their credit profiles. CIBIL assigns credit scores on a scale of 300 to 900, which significantly impacts an individual's or company's eligibility to access credit facilities such as loans and credit cards on favourable terms. Responsible use of credit cards, such as making timely payments and maintaining low balances, can positively influence one's credit score. On the contrary, mismanaging credit cards, like late payments or high credit utilisation, can have adverse effects on the credit score. Ideally, a credit score above 700 is recommended for acquiring a credit card easily. However, if your credit score is lower, there are still avenues available to apply for specific credit cards designed to help individuals establish or rebuild their credit profiles. Enlisted below are a few ways one can get a credit card with a low or no credit history: Apply for a secured credit card. A secured credit card requires a cash deposit that serves as collateral for your credit limit. The deposit is usually equal to your credit limit. These cards are easier to get because the issuer takes on less risk. Over time, using a secured card responsibly can help you build or improve your credit score. Become an authorised user: Ask a family member or close friend with a good credit history to add you as an authorised user on their credit card account. One can get the card, and the account's activity will be reported on one's credit report. Just make sure the primary cardholder uses the card responsibly, as their actions will impact one's credit score as well. Apply for a student credit card: Being a student, one might qualify for a student credit card, which is designed for individuals with little or no credit history. These cards often have lower credit limits and may come with rewards or incentives for good grades. Get a credit-builder loan. A credit-builder loan is designed to help individuals build or rebuild their credit. Instead of receiving the loan amount upfront, one makes fixed payments into an account, and the lender reports the payment activity to the credit bureaus. At the end of the loan term, one will receive the accumulated funds. Credit cards with higher interest rates: Some lenders may offer credit cards to individuals with lower credit scores, but these cards might come with higher interest rates, annual fees, or other charges. Although these options can be costly, they may be viable if you're unable to qualify for traditional credit cards. Exercise caution and ensure one understands all the fees and rates associated with these cards. Credit cards from smaller banks: Smaller banks or credit unions might have more flexible criteria for approving credit cards compared to larger banks. They may consider additional factors beyond just the credit score when evaluating the application. This can be a good option if one is looking for a more personalised approach to credit approval. Credit card with co-signers: Co-sign a credit card application with you. This means they agree to take responsibility for the debt if you fail to pay. Not all issuers offer co-signed cards, but for those who do, having a co-signer can increase your chances of approval. By selecting the right credit card and using it responsibly, individuals with a low or no credit history in India can start their credit journey and work towards establishing a solid credit profile.
