CIBIL Score: Your CIBIL score is low, and your bank refuses to grant you a credit card! Try this smart method..

Credit cards have provided so much convenience to people that their dependence on them has increased significantly, and this is why the demand for credit cards is also increasing rapidly. Banks often offer credit cards to their customers. However, if your CIBIL score is low, banks may refuse to grant you a credit card. In such a case, they consider you a risky customer.

If this has happened to you, don't worry. All doors are closed for you yet. You still have the option of a secured credit card. Although it differs from a regular credit card, it can easily meet your credit card needs. Learn what it is.

What is a CIBIL score, and why does it decrease?

A CIBIL score is a score that reflects your credit behavior, ranging from 300 to 900. If your score is below 700, banks consider you a risky customer. This score decreases when:

You don't pay your credit card bills on time.
You apply for multiple loans or cards simultaneously.
You have a large outstanding balance.
Banks or NBFCs reject your loan and credit card applications due to a low score.

What is a Secured Credit Card?
As the name suggests, a Secured Credit Card is a card issued against collateral (FD). This means you make a Fixed Deposit (FD) with the bank, and based on that, the bank grants you a card with a credit limit. Typically, the card limit ranges from 75% to 90% of your FD amount. If you don't make payments, the bank can deduct the amount from your FD.

How to get a Secured Credit Card approved?
Open an FD with any bank.
Apply for a Secured Credit Card from the same bank.
Your CIBIL is not considered.
The card is usually approved within 1-3 days.

Example: If you have an FD of ₹50,000, the bank may offer you a card limit of ₹40,000–₹45,000.

Benefits of a Secured Credit Card
If you make timely bill payments, this card helps increase your credit score.

This card is easy to obtain, even if you have poor credit or lack income proof.

Your money remains in an FD, which also earns interest.

These cards are secured, so interest rates are kept low.

As you use the card responsibly, you have the opportunity to increase your limit.

Who is a secured card suitable for?

Those with a CIBIL score below 500.

Those with weak income proof.

Those looking to build a credit history for the first time.

Those whose credit card requests has been rejected before.

Also read: SIP alone won't create a perfect portfolio; if you want to secure your future, invest in these 6 investments as well.

How will this card improve your CIBIL score?
Every time you pay a bill on time, that information is sent to CIBIL and other bureaus. Consistently making timely payments improves your score over 6-12 months.

What precautions should you take?
Don't spend more than 30% of your card limit.
Make the full payment every month, not just the minimum payment.
Don't break your FD while the card is active.

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