How to Get a Credit Card Without a CIBIL Score in India
Getting a credit card without a CIBIL score can seem challenging, but it’s possible. If you are new to credit or have no prior borrowing history, your CIBIL score might not exist. This can make it difficult to get a credit card through traditional methods. However, there are alternatives like credit cards against fixed deposits (FDs) that can help you begin your credit journey.
What is a CIBIL Score?
A CIBIL score is a three-digit number that reflects your creditworthiness. It ranges between 300 and 900, and lenders use it to assess your ability to repay loans or credit. A higher score indicates good financial habits and makes it easier to get loans and credit cards. If you have never taken a loan or used a credit card, your CIBIL score may not be available.
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Challenges Without a CIBIL Score
Without a CIBIL score, banks and financial institutions may hesitate to offer you unsecured credit cards. This is because they cannot evaluate your credit behavior. However, secured credit cards, like those issued against fixed deposits, provide an excellent solution for individuals without a credit score.
Credit Cards Against Fixed Deposits
A credit card against a fixed deposit is a secured card issued by banks where your FD serves as collateral. This type of credit card is an ideal option for people with no credit history, as it does not require a credit score check. Here are the key features of credit cards against FDs:
- No Credit Score Requirement Banks do not check your credit score when issuing a secured credit card against a fixed deposit.
- High Approval Chances Since the fixed deposit serves as collateral, banks are more willing to approve your credit card application.
- Credit Limit Linked to FD The credit limit is usually a percentage of your FD amount, ranging from 75% to 90%.
- Build Credit History Using this credit card responsibly helps build your credit history, which can eventually lead to unsecured credit cards in the future.
- Minimal Documentation Applying for a credit card against an FD requires minimal paperwork, making it a hassle-free process.
Benefits of Credit Cards Against Fixed Deposits
- Guaranteed Approval Banks offer secured credit cards even if you lack a credit score or have a low score.
- Helps Establish Credit Regularly paying your credit card bills on time helps build your credit score and improve your financial profile.
- Interest-Free Period These cards often provide an interest-free period of up to 50 days, similar to regular credit cards.
- Rewards and Cashback Many secured credit cards offer rewards, cashback, and discounts, just like standard credit cards.
- Safe for Banks Since the card is secured against your FD, banks face minimal risk, which is why they offer this option.
Steps to Get a Credit Card Against a Fixed Deposit
- Open a Fixed Deposit Choose a bank offering secured credit cards and open a fixed deposit account. Ensure the FD amount meets the bank’s minimum requirement.
- Apply for the Credit Card Submit your application for a credit card against your FD. Provide necessary documents like ID proof, address proof, and FD details.
- Approval and Issuance Once approved, the bank will issue the credit card. The credit limit will be linked to your FD amount.
- Use the Card Responsibly Use the card wisely and pay your bills on time to build a positive credit history.
Top Banks Offering Credit Cards Against FDs in India
- State Bank of India (SBI) SBI offers the SBI Advantage Plus Card against FDs. The card provides benefits like cashback and rewards.
- HDFC Bank HDFC Bank’s secured credit cards, such as the HDFC Bank Credit Card against FD, are popular choices with excellent benefits.
- ICICI Bank ICICI Bank offers secured credit cards with attractive reward points and discounts.
- Axis Bank Axis Bank provides secured cards with a credit limit of up to 80% of the FD amount.
- Punjab National Bank (PNB) PNB issues credit cards against fixed deposits with competitive features and benefits.
Tips for Using a Secured Credit Card
- Pay Bills on Time Always pay your credit card bills on or before the due date to avoid penalties and build a positive credit history.
- Monitor Your Credit Usage Use only a small portion of your credit limit to maintain a healthy credit utilization ratio.
- Avoid Overdrafts Do not exceed your credit limit to avoid additional charges and a negative impact on your credit score.
- Regularly Check Your Credit Report Monitor your credit report to ensure accuracy and track your credit-building progress.
Conclusion
Getting a credit card without a CIBIL score is possible, especially with options like credit cards against fixed deposits. These secured credit cards not only offer financial flexibility but also help you establish a credit history. By using the card responsibly, you can build a good credit score and eventually qualify for unsecured credit cards. So, if you’re looking to start your credit journey, consider opening a fixed deposit and applying for a secured credit card today!