When you apply for a Credit Card, the issuing bank will evaluate your credit score, also known as a CIBIL score. The bank gauges your creditworthiness, based on your credit score, repayment history, and income. A superior credit score opens the doors to superior credit products. But what if you have no CIBIL score? The good news is that you can get a Credit Card even without a CIBIL score.
CIBIL score explained
In India, the Reserve Bank of India has licensed the Credit Information Bureau (India) Limited (CIBIL) to function as a credit information company. CIBIL maintains files on consumers and businesses to keep tabs on their credit-based activities. The credit score by CIBIL has come to be known as a CIBIL score. Banks consider the CIBIL score when approving your application for a Credit Card.
Your CIBIL score can range from 300 to 900. Scores from 700 upwards are considered to be good, and 850 upwards are considered to be excellent. However, without a CIBIL score, it can be challenging to get a Credit Card, but not impossible.
For salaried / early job holders
If you have just secured your first job, then a bank may not expect you to have a credit score. In this case, they will evaluate your income history, and monthly cash flows, which offer an idea of your spending habits. If you can demonstrate proof of at least six months of a fixed income with income statements, you could get approval for a Credit Card with a credit limit that aligns with your income and cash flows.
Experienced job-holders can also furnish six months of income statements when applying for a Credit Card. You may not get access to premium cards unless you are in a very high-income bracket. However, this is a good starting place to get a Credit Card and start building your CIBIL score.
Apply for a secured Credit Card
Another route to accessing a Credit Card without a CIBIL score is to apply for a secured Credit Card. This card is offered against a security amount or collateral. For instance, if your Credit limit is ₹ 20,000, then the security deposit will be worth ₹ 20,000. However, like any other Credit Card, it comes with a loyalty programme, perks, and exclusive offers. By paying your bills on time, you can build your credit score and graduate to an unsecured Credit Card in the future.
Get a co-signer
Another route to securing a Credit Card is to get a co-signer to your account. A co-signer could be a family member or a friend. They must have a high credit score and fixed income source and be able to demonstrate proof of both. Unfortunately, many issuers do not offer this option. So the best route is to apply for a Credit Card aligned to your income and cash flows, or a secured Credit Card.
How to boost your CIBIL score
There is merit in continually building your CIBIL score to secure superior credit products in the future. Here are some best practices to enhance your CIBIL score:
- Ensure that you pay your bills on time. The best approach is to automate payments and avoid the late fees.
- Never pay just the minimum amount, but the entire amount on your Credit Card bill. Avoid paying high interest rates on the outstanding amount with this step.
- It’s ideal to put as many of your expenses as possible on your Credit Card, so you can utilise your credit efficiently.
- Budget your expenses, so you never spend beyond your means.
Also Read: How to get a Credit Card in 3 easy steps
The takeaway
Getting access to your first Credit Card can be a little challenging without a CIBIL score. However, with the right strategy you can make it happen. Axis Bank offers a wide selection of Credit Cards. You can apply for a Credit Card via mobile or Internet banking without any hassles.
Choose the right card based on your cash flows and needs and get access to a range of benefits. These include exclusive deals and offers on shopping and dining out, fuel waivers, loyalty programmes, and free airport lounge access, to name a few.
Disclaimer: This article is for information purpose only. The views expressed in this article are personal and do not necessarily constitute the views of Axis Bank Ltd. and its employees. Axis Bank Ltd. and/or the author shall not be responsible for any direct / indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information. Please consult your financial advisor before making any financial decision.
