The credit cards have made our lives simpler. The bulky wallet has been replaced with a plastic card, adding convenience to our routine life. Also, the flexibility of buying the first and paying later excites many. If you also need similar comfort and ease, apply for a credit card and begin your credit journey. Many beginners wonder how to get a credit card without a CIBIL score or history. Here, we present a quick but comprehensive guide for the credit novice to answer all their questions.
Credit Score: Definition and Importance
The credit bureau provides a credit score that reflects the borrower’s credibility and payment history. If your credit score is closer to nine hundred, you will have a good credit score with a stronger credit rating.
The credit score is essential as the banks and other financial institutions check it at the time of loan approval or credit card approval. Since some loans and credit cards are unsecured, the banks want an assurance that the borrower will repay the debt. Banks do not like to approve loans and provide credit cards to individuals with a bad credit history. They find those borrowers risky and, hence, avoid facing losses.
A Credit Card without a Credit Score
If you are considering beginning your credit journey and want a credit card, here is how to get one.
1. Apply for a Secured Credit Card
One of the easiest ways to kick-start your credit history is to apply for a secured credit card; individuals without a credit score can easily get a secured credit card as the lenders do not have a risk here. You can apply for a secured card through our platform www.duefactory.com. While the borrowers can use this card to build a robust credit history, the lenders can review an individual’s credit performance based on the card usage. To get a secured credit card, you open a savings account. Then, pay a fixed deposit. The bank will then issue you a credit card and allot a credit limit according to the total deposit amount.
Also, once you start using a secured card and show responsible behaviour by making timely payments, you can apply for an unsecured credit card, too.
Important Consideration – Ensure that both you and the main applicant maintain good credit habits, as any missed payments or high utilization on the add-on card can negatively impact both your scores. Use the card responsibly and avoid overspending.
2. Get a Supplementary or Add-On Card
Availing of an add-on card also allows a beginner to build a good credit score. The family member is the main card holder and the new borrower can be the add-on user. The add-on credit card also allows the same benefits to the user as a primary credit card user. However, both have to share the credit limit given with the card.
3. Student Card
College students can get a student credit card, which provides them with a good opportunity to establish a responsible credit history. Ensure to pay your monthly dues timely to prevent debt accumulation, show great credit behaviour, and avoid interest charges.
4. Open Savings Account
Some banks in the country offer a free credit card to the people opening a savings account. The card limit will depend on the deposit amount in the savings account.
5. Prepaid Credit Card
People without a credit score or a poor credit score can get a prepaid credit card. Most banks in India offer this facility to first-time credit borrowers. If you are thinking about how this card works, then be informed that the individuals need to prepay a certain sum of money to the lender and then use the card.
How to Ensure a Good Credit History With the First Credit Card?
- Here is how you can build a good credit history with your first credit card:
- Pay your bills before the due date.
- Keep the card usage optimum, preferably below thirty percent of your credit limit.
- Raise your credit card limit. This will lower the credit utilization. Ask the lender for it. The lenders agree to increase the limit if you have been paying the dues on time.
Wrapping Up
By now, you would have realized that it is not that challenging to get a credit card without a credit score, isn’t it? Follow the above-mentioned strategies and avail the benefits of a credit card. Use your credit card wisely and create a good credit score. This will help you avail numerous financial benefits like loan approval, low interest rates, attractive rewards on a credit card, etc. For more guidance, connect with Due Factory and lead a stable financial life.
FAQs
1. How does the lender evaluate whether to approve a credit card request?
Ans. The credit card issuer first checks the credit score and then analyses the individual repayment history and the risk of default. If there is no credit history or score, the lender uses other measures to protect the likelihood of credit repayment.
2. Can I get a credit card without a credit score?
Ans. Yes. The lender evaluates the credit beginners based on their income, employment status, secured card usage, co-authorization, add-on card usage, etc. to grant you a credit card.
3. What is the lowest score for getting a credit card?
Ans. It is good to have a CIBIL score closer to nine hundred. If you have a score of more than seven hundred, you have a good chance to get a regular credit card. However, it depends on the specific bank and financial institution what are their eligibility norms and credit score expectations.
4. How to get a secured credit card?
Ans. To get a secured credit card, you will have to open a savings bank account and make a fixed deposit. The bank will then issue you a credit card and allot a credit limit according to the total deposit amount. You can apply for a secured card through our platform www.duefactory.com too.
5. How to increase credit card limit?
Ans. You can increase the credit limit by managing the credit card responsibly. If you repay the dues timely, the credit card companies will increase your credit limit. Alternatively, you can also contact the credit card issuer to get the same increased.
6. Does my first credit card start building my CIBIL score?
Ans. Yes, provided you use your credit card responsibly. Keep the utilization low and make the payments before the due date.
7. How long will it take to start building your credit score?
Ans. The bureaus may take two to six months to generate a credit score.