How To Get A Credit Card With A Bad CIBIL/Credit Score?
Getting approved for a credit card if you have a bad CIBIL score or a bad credit score can be difficult.
Credit cards have become a very useful financial tool as they allow users to get cashbacks and help in case any financial emergencies arise. Credit cards serve as a convenient mode of payment and also assist in building a good credit score. However, actually getting approved for a credit card while having a bad credit score can be somewhat difficult.
1. Understanding Your CIBIL Score
The first step to getting a credit card is to understand what a CIBIL score/credit score is and why it is low. Your CIBIL score, also called a credit score is a three-digit number that represents your creditworthiness. The score ranges from 300 to 900, and a score above 750 is considered excellent. A score between 600 to 749 is considered good, while a score below 600 is considered poor.
If you have a bad credit score, it is essential to understand why it is low. This will help you in improving your CIBIL score and make it easier for you to get a credit card in the future.
2. Apply For A Secured Credit Card
A secured or fixed deposit backed credit card is an excellent option for those who have a bad credit score. To get a secured credit card, you will need to deposit a certain amount of money with the bank. The bank will then issue a credit card with a credit limit equivalent or somewhat similar to the amount that you have deposited. You can use then credit and pay your credit card bills on time to improve your credit score.
3. Apply For A Credit Card With A Co-Signer
If you have a family member or a friend who has a good credit score, you can ask them to be your co-signer for getting the credit card. A co-signer is an individual who agrees to take on your debt in case you as the primary borrower fail to repay it. Having a co-signer with a good credit score will increase your chances of getting a credit card with a lower interest rates.
4. Apply For A Credit Card For Bad Credit
Many banks and financial institutions offer specific credit cards for people with that have a bad credit scores. As a result, these credit cards have higher interest rates and lower credit limits. However, these types of credit cards are a good option for those who are looking to rebuild their credit score. Before you apply for a credit card for bad credit, make sure to compare the interest rates and fees of different credit cards so you get the best deal.
5. Improve Your Credit Score
In the long run, improving your CIBIL score is the best way to get a credit card with better offers and lower interest rates. Some of the ways you can improve your credit score are:
Paying all pending bills and loan EMIs on time.
Using only a small portion of your credit limit.
Checking your credit report regularly for errors.
Improving your credit score will not happen immediately. It requires patience and discipline in regular repayments of your credit card and EMI dues. However, it is a vital step in improving your finances.
6. Negotiate With Your Bank
If you have been a long-time loyal customer of a bank, you can try negotiating with them for a credit card with better terms, even if you have a bad CIBIL score. You can explain your situation and ask them to consider your history with them while approving your credit card application. However, this approach may not always be successful, and you should be prepared for rejection.
Avoid Applying For Multiple Credit Cards
Applying for multiple credit cards at the same time can have a negative impact on your credit score. Each time you apply for a credit card, the respective bank will check your credit report, which will show up as an inquiry on your CIBIL score. Too many inquiries can lower your credit score and make it difficult for you to get a credit card in the future.
In conclusion, getting a credit card with a bad credit score can be challenging, but not impossible. You can use some of the methods mentioned above to improve your chances of getting a credit card. However, it is important to remember that a credit card is a tool that requires responsible usage. Make sure to use it responsibly and make payments on time to avoid further damage to your credit score. With discipline and patience, you can improve your credit score and eventually get a credit card with better terms and lower interest rates.
Also Read: Use Credit Cards The Right Way To Turn Them Into A Powerful Tool