How To Get A Credit Card With Bad Credit

Financial Fitness Podcast

Credit cards are one of the most convenient modern financial tools. it makes it easy to purchase your favorite items now and pay for them later. Once considered a luxury, credit cards have now become a necessity. India is a fast-growing market for credit cards with millions of citizens already holding at least one credit card and actively using it. The boost for the digital economy is another contributing factor to the increase in the issue and use of credit cards.

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Credit cards are issued by the banks to their customers based on their risk evaluation and after reviewing their credit profile. The credit score is the single most crucial factor that determines your eligibility for a credit card. Besides the eligibility, the credit score also plays a crucial role in determining the credit limit sanctioned on the card.

The credit score reflects the creditworthiness of the applicant and helps the bank in ascertaining whether the applicant is a viable candidate for issuing a credit card. Most banks provide credit cards only to persons with a good or high credit score. That doesn’t mean a person with a poor credit score will not be able to get a credit card. Let’s explore the different ways to get a credit card with bad credit.

Besides credit score, lenders nowadays use other criteria to sanction credit cards. Some of the credit cards are approved instantly even with bad credit history. Let us look at how you can apply for such credit cards and where to find the lender who offers credit cards for bad credit.

What is bad credit?

There are many credit rating or scoring agencies in India which provide the credit score of any person upon subscription or even at free at cost. These credit-rating agencies review the financial history of the person to compute the three-digit numerical score, known as credit score.

A credit score lower than 600 is considered to be a poor or bad credit score. Most lenders prefer providing credit only to applicants that have a good or high credit score of 750+.

When you have a low credit score, it implies that you have a poor credit repayment history in the past or have made wrong credit decisions. This implies that a person with a low credit score is a riskier candidate for any potential loan or credit cards and the risk of default is high.

What are the causes of bad credit?

The credit score, as mentioned above, is the barometer of the sound financial health of a person. This credit score can be hampered by many instances that reduce the credit score and deem the person to be a bad candidate for any loans or credit cards.