Be it online shopping, booking flight tickets or any sudden need, in today’s era credit card has become not just a convenience but an important part of financial life. But as soon as a person applies for a new credit card, the first thing that is checked is his CIBIL score. In such a situation, the question that arises in the minds of people whose CIBIL score is bad is whether they will never get a new credit card? Let us know.
What is CIBIL score?
CIBIL Score is a three-digit number that reflects your credit history. This score ranges between 300 to 900. Generally, banks consider a score of 750 or more as good. At the same time, a score below 600 indicates that you have been negligent in making loan or credit card payments in the past. In such a situation, banks consider you a ‘high risk customer’.
Has RBI banned those with bad scores?
It is important to know that the Reserve Bank of India (RBI) has not made any rule that prevents giving a credit card to a person with a bad CIBIL score. Actually, issuing credit cards completely depends on the policy of banks and card issuing companies. Banks decide the terms considering their risk.
Any option for those with bad CIBIL score?
Even if your score is low, there are still some doors open. The safest option is secured credit card. In this, you have to make a fixed deposit (FD) in the bank and in return you get a card. Apart from this, an add-on card can also be taken on the card of a family member. Some fintech companies and NBFCs offer cards with limited credit limits, so that the user can gradually improve his credit.
How will credit card improve CIBIL score?
A credit card used correctly can help improve your poor CIBIL score. A good improvement in score can be seen in 6 to 12 months with timely bill payment, spending less than the limit and regular usage. Once the score improves, the doors to unsecured credit cards also open up.
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