How To Get Credit Card Without CIBIL Score: 4 Ways

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If you’re looking to get a credit card in India, one of the first things you’ll need to do is check your CIBIL score. CIBIL stands for Credit Information Bureau (India) Limited and is a credit information company that collects and maintains records of credit-related activities of individuals and companies. In India, banks and financial institutions use the CIBIL score to evaluate the creditworthiness of a borrower before granting a loan or issuing a credit card.

What is the CIBIL Score?

The CIBIL score is a three-digit number that ranges from 300 to 900. A higher score indicates a better credit rating, which means you’re more likely to get a loan or credit card with favorable terms. The score is calculated based on your credit history, including your payment history, credit utilization, length of credit history, and types of credit. To know what all the factors that affect your CIBIL score, you can go through this blog wherein we have covered all the aspects of CIBIL score.

What is a Credit Card?

A credit card is a financial instrument, typically issued by a bank or financial institution, that allows the cardholder to borrow funds with which to pay for goods and services with merchants that accept cards for payment. Credit cards impose the condition that the cardholder must pay back the borrowed money, plus any applicable interest, as well as any additional agreed-upon charges, either in full by the billing date or over time.

Also, Read: Credit Score vs CIBIL Score: Are they Even Different?

Key Features and Components of Credit Cards Include:

1. Credit Limit: This is the maximum amount of credit that a cardholder is permitted to use. The limit is set by the credit card issuer based on the cardholder’s creditworthiness.
2. Interest Rates: If the cardholder does not pay the full amount owed by the due date, the issuer will typically charge interest on the owed amount. The rate can vary greatly based on the card issuer and the user’s credit profile.
3. Rewards and Benefits: Many credit cards offer rewards programs, such as cashback, points, or miles, based on the amount of money spent using the card. They may also offer additional benefits like travel insurance, extended warranty coverage, and airport lounge access.
4. Security Features: Credit cards come with various security features to protect against fraud and theft. This includes the card number, card verification value (CVV), and chip and PIN technology.
5. Annual Fees: Some credit cards charge an annual fee for usage, though many cards are available without any annual fees.
6. Billing and Statements: Cardholders receive monthly statements detailing their purchases, the total amount owed, the minimum payment due, and the payment due date.
7. Balance and Charges: Users can either pay the full balance by the due date to avoid interest charges or pay a minimum amount and carry the rest of the balance to the next month, accruing interest.

Credit cards can be a valuable financial tool when used responsibly, offering convenience, purchase protection, and the potential to build a credit history. However, it’s essential for users to understand the terms of their credit card agreement and be aware of the potential for debt accumulation due to interest and fees if balances are not paid in full.

Also, Read: NBFC Loans Without CIBIL Score: Your Complete Guide

Why Do Banks and Financial Institutions Check CIBIL Score Before Issuing a Credit Card?

Banks and financial institutions check your CIBIL score before issuing a credit card to evaluate your creditworthiness. A low score indicates that you have a history of defaulting on loans or credit card payments, which makes you a high-risk borrower. In such cases, banks may reject your credit card application or charge higher interest rates and fees.

Managing your CIBIL score and understanding credit can be tricky, especially if past issues are making it hard to get a loan. But even if you’re worried about your CIBIL score, there are still ways to get a loan. There are strategies and options available for those with a low CIBIL score.

To learn more about how to get a loan in this situation, please read this helpful blog. It clearly explains your choices and the actions you can take.

Also, Read: What is Credit Score? Factors, Calculation & Ways to Improve

The Range and the Credit Rating by CIBIL

The CIBIL score range is as follows:

300-579: Poor

580-669: Fair

670-739: Good

740-799: Very Good

800-900: Excellent

How CIBIL Calculated your Credit Score

CIBIL calculates your credit score based on the following factors:

• Payment History: Your CIBIL score is heavily influenced by payment history. Timely payment of credit card bills and loan EMIs boosts your score, while delays or missed payments lower it. A 30-day delay can reduce your score by 100 points.
• Credit Exposure: Your credit utilization ratio, or the amount of credit used versus your credit limit, is crucial. Keeping this under 30% is advised to maintain a healthy score. High utilization can indicate financial risk to lenders.
• Credit Type and Duration: A mix of secured (e.g., home loans) and unsecured (e.g., credit cards) credit, along with a long credit history, positively impacts your score. It’s beneficial to start building credit early for significant future purchases.
• Other Factors: Hard inquiries, which occur when lenders check your CIBIL score for new credit, can negatively affect your score if there are too many in a short time. Avoid applying for multiple credit lines simultaneously.

Also, Read: How to Get Loan Without a CIBIL Score?

How To Get Credit Card Without CIBIL Score?

If you have no credit history or a low CIBIL score, you may find it difficult to get a credit card. However, there are some ways to get a credit card without a CIBIL score:

1. Secured Credit Card: This is a straightforward solution for those lacking a CIBIL score. To obtain a secured credit card, open a fixed deposit with a bank and deposit funds. The bank then issues a credit card with a limit of 50 to 100 percent of the deposit, based on their terms. This card helps in building your CIBIL score.

2. Add-on Credit Card: If a family member holds a primary credit card, you can get an add-on or supplementary card. It carries the same benefits as the primary card but shares its credit limit. This option is beneficial for leveraging the advantages of a credit card and managing sudden financial needs.

3. Credit Card Against Savings Account: Some major banks offer credit cards linked to a savings account. By maintaining a certain balance in the account, you can secure a credit card without needing a CIBIL score.

4. Prepaid Credit Card: Ideal for those with a poor CIBIL score or no credit history, prepaid credit cards are provided by major banks. You can load the card with a certain amount of money and use it like a prepaid mobile service, offering a practical way to manage finances and potentially build your credit profile.

Also, Read: 8 Best Ways to Improve Your CIBIL Score Quickly

Important Things to keep in Mind when Getting your Credit Card

1. Choose the Right Card: There are many credit cards available in India, each with its own features and benefits. Choose a card that suits your needs and spending habits.

2. Read the Terms and Conditions: Before applying for a credit card, make sure you read the terms and conditions carefully. Understand the interest rates, fees, and other charges associated with the card.

3. Use your Credit Card Responsibly: Once you get a credit card, use it responsibly. Make timely payments and don’t exceed your credit limit. This will help you build a good credit history and improve your CIBIL score.

To wrap up, getting a credit card without a CIBIL score can be challenging, but it’s not impossible. By following the tips mentioned above, you can build a good credit history and improve your chances of getting a credit card with favorable terms and conditions. Remember to use your credit card responsibly and make timely payments to maintain a good credit score.

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Also, Read: How to Get a Business Loan on Low Credit Score?

FAQs

1. Will Choosing the Equated Monthly Installment (EMI) Method for Settling Credit Card Dues Impact My Credit Rating as per CIBIL?

It does not inherently affect your score. Nonetheless, missing EMI payments on their scheduled dates can adversely influence your CIBIL rating.

2. What are the Methods to Enhance the Spending Limit on My Credit Card?

Elevating your credit limit is feasible by demonstrating responsible credit utilization. This proactive approach often prompts card issuers to augment your limit automatically. Alternatively, you may initiate a request to raise your limit by directly communicating with the credit card issuer.

3. How can I Achieve a 900 Credit Score by Managing my Loans and Credit Cards?

To reach an impeccable credit score of 900, consistently make timely payments on your credit card bills and loan EMIs, ensure a balanced combination of secured and unsecured loans, and keep both your debt-to-income ratio and credit utilization rate minimal.

4. Does Obtaining a First Credit Card Boost my CIBIL Score?

Indeed, it can. Once you have your credit card, it’s crucial to use it wisely. Aim to use only 20-30% of your total credit limit to positively impact your CIBIL score.

Also, Read: Get a Personal Loan Without Credit Score – 5 Fool-Proof Ways