What is CIBIL Score for Credit Cards and How to Improve it?

In the year 2019, there were over 52 million credit card users in India. With the steady growth of credit cards, banks are expanding their reach to urban and semi-urban markets to increase their share in the market.”

Source: Research and Markets

These numbers highlight the importance of credit cards and their rapid growth in the Indian market. With the increasing importance and use of credit cards, it is more important than ever to discuss, analyse, and achieve a good CIBIL score.

This blog discusses the significance of a good CIBIL score for obtaining a credit card, its benefits, and whether you can obtain a credit card with a low CIBIL score.

What is a Good CIBIL Score for a Credit Card?

The CIBIL score ranges from 300 to 900. It is calculated by examining a variety of factors such as the user’s payment history, the balance between secured and unsecured loans, the use of credit utilisation ratios, the number of late or settled payments, hard inquiries within a given time period, and so on.

The table below shows the different credit score ranges and their implications-

CIBIL ScoreMeaning
300-549Poor CIBIL score
Highlights irregular payment
Payment defaulter
Credit dependency
550- 649Fair CIBIL score
Casual payment behaviour
Too many requests from lenders to review credit reports as part of the loan application process (Hard inquiries)
650-749Satisfactory CIBIL score
Timely payment history
Entitled for credit card and loans
Fewer chances of turning into a defaulter
High rate of interest
750-900Excellent CIBIL score
Responsible payment habits
No defaults in payment
Error-free payment history
No outstanding balance
Higher negotiation capabilities
There are no chances of becoming a defaulter

What are the Benefits of a Good CIBIL Score for a Credit Card?

A good CIBIL score provides numerous advantages to a credit card applicant. The following are some of the advantages:

  • The applicant for a credit card becomes eligible for top credit cards and related offers
  • Banks and financial institutions provide good credit options to customers who have a high CIBIL score
  • Banks charge lower interest rates on loan amounts for applicants with a high CIBIL score
  • Applicants with a high CIBIL score get their credit card application approved faster
  • An applicant with a high CIBIL score is given preference over someone with a low CIBIL score

Credit Cards For People With Low CIBIL Score

What should you do if your CIBIL score is low?

Let’s get this straight!

A low CIBIL score reflects the user’s credit repayment habits and casual attitude toward the acquired credit. As a result, banks generally avoid providing credit cards to applicants with a low CIBIL score. However, there are some circumstances, such as medical emergencies, job loss, financial damage, or the like, that obstruct a user’s flow of funds and have a negative impact on the CIBIL score. Banks provide secured credit cards to such exceptional customers.

Secured credit cards are those that are issued in exchange for fixed deposits. An applicant can obtain a secured credit card, as income proof is not always required for these credit cards. Because these cards are offered in exchange for fixed deposits, any missed or late payments are recovered only from these deposits. As a result, the risk associated with nonpayment of credit amount is reduced to some extent by secured credit cards. Banks usually provide these cards to low-wage professionals as well.

Check Your Cibil Score for Free
Can I get a credit card with a low CIBIL score?
It is more difficult to obtain a regular credit card with a low CIBIL score; however, it is not impossible. Banks charge higher interest rates on credit cards obtained by applicants with a low CIBIL score.
How to get a 900 CIBIL score for a credit card?
A few things must be done in order to achieve an excellent credit score:
  • Timely repayment of credit amount
  • Resisting oneself from making hard inquiries
  • Using credit utilization ratio responsibly
How to maintain a good Credit score?
To maintain a good credit score, one should adhere to the following practices:
  • Pay off your debts on time
  • Never postpone any credit card payment
  • Maintain an error-free credit report
  • Try not to spend more than 30% of your credit card limit
  • Do not make hard inquiries within shorter time periods
  • Ensure not to leave any outstanding amount behind
  • Most importantly, calculate the difference between how much you require and how much you can handle
What are the factors that affect the CIBIL score?
The following are a few common factors that have a negative impact on the CIBIL score:
  • Poor credit history
  • Delayed payments
  • Maintain an error-free credit report
  • Maximum use of credit utilization ratio
  • Multiple hard inquiries within a given time period
  • Rejection of loan or credit card applications
  • Mismanagement between secured and unsecured loans
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