There are 4 credit bureaus in India but the credit score provided by Credit Information Bureau (India) Limited or CIBIL is the one considered by more than 2,400 financial institutions. The credit or CIBIL score they provide is based on the Credit Information Report (CIR).
The CIR contains personal information, credit utilisation, numbers of enquiries, credit mix, and several other details of a creditor as forwarded by a lender. The CIBIL score ranges from 300 to 900 and is dependent on how sound the CIR is.
Generally, a score above 750 is considered excellent and essential to avail an unsecured credit like a personal loan or a credit card. A credit score below 600 is poor, that ranging from 600 to 700 is considered fair, and a number ranging from 700 to 750 is regarded as good.
You will have a high score if you have handled all your credit accounts responsibly.
Credit score requirement for credit cards
Several companies provide credit cards to individuals with low credit score although such cards don’t come with attractive features.
All top-of-the-line cards which come with an array of features require a credit score of 750 or above. The Bajaj Finserv Credit Card is one such credit card that combines the power of 4 cards in one along with several industry-first features.
You can avail interest-free cash withdrawal for a period of up to 50 days, and also, an emergency loan with zero interest for a period of up to 90 days.
Bajaj Finserv additionally provides pre-approved offers for these cards that make getting finance easier. These pre-approved offers are also for home loans, business loans, personal loans, and several other financial products and services.
What to do if you have zero or a low credit score?
Avail secured credit cards – A secured credit card is usually provided against a fixed deposit which will remain as collateral with the lender. The card you get will have a limit lower than the fixed deposit amount. It will also have limited features and benefits.
Although the company may upgrade your card as you receive increments.
How to increase your credit score?
You have to increase your credit score if you want to avail high-end credit cards. Follow the tips mentioned below to do so:
Tip 1. Get a small secured loan
Secured loans are provided against an asset that acts as collateral. Lenders do not ask for a high credit score to sanction such loans.
You only have to ensure that you repay all loan EMIs within the due date to improve your CIBIL score.
Tip 2. Pay your credit card bills in time
If you already own a card, make it a point to pay your credit card bills within the due date and improve your score significantly.
Tip 3. Always pay the total amount due
Outstanding bills reflect both the minimum the total amount due. You may choose to pay the minimum amount if you can’t pay the total outstanding at one go. However, doing so will lower your credit score. Hence, it is advisable to always clear off the total dues.
Tip 4. Keep your credit utilisation within 30% of the limit
Your card will come with a pre-set limit or the maximum amount that you can spend using it. Ensuring your total utilisation remains within 30% of the limit will improve your score.
Tip 5. Never apply for multiple credits at a time
You must refrain from applying for too many credits at a time. A lender will enquire for your credit report with each application and that will decrease the CIBIL ratings.
A credit card is one of the ideal ways to make payments owing to their lucrative benefits. It is also a superb alternative to debit cards for shopping and one of the reasons why you should avail them. So, if you have plans to avail one, make sure to have a healthy credit score beforehand.