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You might have come across the word ‘CIBIL™ score’ while forwarding your loan or credit card application at the bank. CIBIL™ score is integral for lenders while granting approval for your loan or credit card. CIBIL™ is one of the main credit bureaus operating in India which provides a credit report and CIBIL™ score for helping lenders evaluate your creditworthiness based on your past credit information. Therefore, having a good CIBIL™ score ensures you can get your credit card approved easily by the bank.

What is the CIBIL™ Score required for a credit card?

The minimum CIBIL™ score required for getting a credit card approved is generally 750. This implies that credit card applicants may get their approvals rejected by top credit card companies if their CIBIL™ score is less than 750. Applicants having a low credit score below 700 are usually not approved for premium credit cards from the top credit card issuing companies.

However, that does not mean applicants with a low CIBIL™ score cannot get a credit card approved by banks. Banks do issue credit cards to lower CIBIL™ score applicants, which comes at some cost. Such applicants would get credit cards at a higher interest rate and a lower credit limit. This is because banks consider applicants with a low CIBIL™ score as high-risk. Banks will always conduct a thorough check on your past credit information and CIBIL™ score before granting you the credit card.

It is, therefore, considered prudent to maintain a CIBIL™ score of 750+ to get faster approval and better terms on the credit card.

What is a CIBIL™ Score?

CIBIL™ generates CIBIL™ score refers to a 3-digit numeric synopsis of your creditworthiness, i.e., a credit score which is in the range of 300 - 900.

In India, four credit bureaus - CIBIL™, Equifax, Experian and CRIF High Mark, are authorized by the Reserve Bank of India (RBI), to generate credit reports and credit scores. CIBIL™ score holds wide relevance amongst the lender fraternity in India for evaluating your financial well-being.

What is a good CIBIL™ Score?

A CIBIL ™ score of 750 and above is deemed a good CIBIL™ score. A CIBIL™ score getting nearer to the maximum credit score limit of 900 is deemed as an excellent credit score warranting very sound financial behaviour on the part of the borrower with respect to repaying debt. Lenders consider you a trustworthy borrower and are assured of your capability to repay the balance on time. The higher the credit score, the greater are your chances of not only getting a loan or credit card approved but also being able to negotiate better terms with your lender.

Any score in the range of 550-749 signifies a not so good financial prudence on the part of the borrower and even entails a risk of default on loan or credit card payments, to the lender. A score of 350-549 indicates the high-risk borrower category leading to loans or credit card approvals getting rejected by the lender.

Why do banks consider a good CIBIL™ score an important criterion for issuing a credit card?

In India, credit cards are considered equivalent to an unsecured loan by banks as these are provided entirely on the basis of an applicant’s creditworthiness. As such, banks run a high risk of default on credit card payments leading to losses which makes them be very careful while scrutinizing and granting approval. CIBIL ™ score and credit report generated by CIBIL ™ thus form an integral part of the credit card lending framework for checking the borrowers’ credit track record to prove the genuineness of the borrower’s financial capability while repaying credit card dues. CIBIL ™ score also helps banks to analyze and evaluate applicant’s record of late payments and defaults on other credit cards or loans and their diligence in paying the dues. As such, a good CIBIL ™ score is considered very important for lenders before issuing a credit card.

What are the benefits of a credit card with a good CIBIL ™ score?

Key benefits for a credit card holder with a good CIBIL ™ score are 

  • Greater eligibility for premium credit cards
  • Eligible for a higher credit limit sanction
  • Low rate of interest on credit cards
  • Easy and faster approval of credit card or additional credit card
  • Better negotiation available on credit card rate of interest or credit limit sanctioned
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