Credit Card for Low CIBIL Score

Dealing with a low CIBIL score can feel overwhelming. Often, life throws curveballs like medical emergencies or job losses that can lead to financial difficulties and, as a result, a poor credit rating. Sometimes, it's just a matter of not knowing enough about how credit works. If you find yourself in this situation, you're not alone. We've put together this guide to help. Here, you'll find a selection of credit cards designed specifically for those working to improve their credit scores. We aim to give you the tools and information you need to make informed choices about credit cards that can help you start rebuilding your financial health. Let's explore your options together.

6 Credit Cards for Low or No Cibil Score

SBI Advantage Plus Credit Card

This card is ideal for building or improving your credit score. It is secured against an FD and offers a credit limit of up to 85% of the deposit. The card includes features like Flexipay, which allows you to convert your transactions into easy EMIs and access cash from ATMs around the world.

SBI Unnati Credit Card

With no annual fee for the first four years, the SBI Unnati card is a good starter option for those new to credit. It requires a fixed deposit but offers benefits like contactless payments and the ability to convert spending into EMIs with Flexipay.

Axis Bank Insta Easy Credit Card

This easy credit card provides a credit limit of up to 80% of your FD value and includes perks like a 1% fuel surcharge waiver. There is no annual fee, and it offers the flexibility of withdrawing cash up to the total credit limit.

Kotak Mahindra Aqua Gold Credit Card

This card is secured against your FD and offers a credit limit of up to 80% of the deposit. Benefits include a fuel surcharge waiver for transactions between Rs. 500 and Rs. 3,500 and a railway surcharge waiver for bookings made on the IRCTC website.

HDFC Money-Back Credit Card

This card offers benefits like cash back on every expenditure and the option to convert large purchases into EMIs with SmartEMI. There is a modest annual fee, and the interest rate varies depending on your credit profile and the bank’s discretion.

Rupicard

The Rupicard is targeted at those with very poor credit, requiring only a minimal FD to start. It offers lifelong membership without annual fees and includes a cash-back reward on all transactions, enhancing the value of your expenditures.

Documents Required for Poor Credit Score Credit Cards

The documentation required may vary slightly from a standard credit card when applying for a credit card with a poor credit score. Here’s a look at the typical documents you’ll need:

• Proof of Identity: Valid government-issued identification such as a passport, driver’s license, or Aadhar card is required to verify your identity.
• Proof of Residence: Utility bills, rental agreements, or bank statements can serve as proof of your current residence.
• Income Proof: While income criteria might be less stringent for secured credit cards, you may still need to provide recent pay slips, tax returns, or bank statements to demonstrate your ability to manage credit.
• Bank Statements: Recent bank statements are often required to assess your financial behaviour and existing financial obligations.
• Security Deposit Proof: For secured credit cards, proof of the deposit or the fixed deposit receipt is necessary, as this serves as collateral against the credit limit provided.

Understanding a Bad Credit Score

A bad credit score reflects past financial difficulties or poor management of credit resources, which can impede your ability to obtain loans. Credit scores generally range from 300 to 900, and scores below 580 are considered poor.

A poor credit score can restrict one’s access to financial products and lead to higher interest rates. Common causes of a bad credit score include late payments, loan defaults, high credit card utilisation rates, and limited credit history.

Improving a bad credit score is achievable. Effective strategies include making timely payments, reducing the amount of debt you owe, and avoiding new credit inquiries, which can increase your score. You can consistently enhance your credit score over time by managing these aspects.

Selecting the Best Credit Cards for Poor Credit

When searching for a credit card with a bad credit history, choosing the right one can significantly impact your financial rehabilitation. Here’s how to choose a credit card if you have poor credit:

• Consider Secured Credit Cards: These cards require a security deposit, which often serves as your credit limit. They are easier to get with a low credit score and can help you build credit if used responsibly.
• Look for Low Fees: Prioritise cards with low annual fees, no application fees, and reasonable interest rates. Avoid cards that charge high fees relative to their credit limits.
• Check for Credit Reporting: Ensure the card issuer reports to all major credit bureaus. Regular reporting of your credit activity helps build your credit score when you make timely payments.
• Evaluate the Approval Odds: Some credit cards are specifically designed for individuals with poor credit and advertise higher approval odds. Opt for these cards to increase your chances of approval.
• Review Additional Benefits: While your options may be limited, look for cards that offer some form of benefits like cash back, a rewards program, or free credit score monitoring.