Credit Card for Bad CIBIL Score: Options When Banks Reject You

Your CIBIL Score can influence how lenders view your credit application. It reflects your past credit behaviour and helps lenders assess how risky it may be to extend credit to you. However, even if your score is low, you may still find cards designed around collateral, existing banking relationships, or simpler eligibility criteria.

Thankfully, there are credit cards built for people whose credit history is far from perfect. These cards offer a way to access credit while you work on rebuilding your score. The trick is knowing what you are actually applying for. A card that is easier to obtain is useful only if its costs and conditions also make sense.

Quick Refresher: What is a CIBIL Score?

A CIBIL Score is a three-digit number that summarises your credit history. It is generated from information in your credit report, including your repayment behaviour and existing credit accounts.

Here’s how different CIBIL Scores are generally rated:

Credit Card Options if You Have a Low CIBIL Score

Got your credit card application rejected? Explore these options even if you have a low CIBIL Score:

Credit Card Against a Fixed Deposit

An FD-backed card can be one of the more practical options when an unsecured card is difficult to obtain. You place money in a fixed deposit with the issuer. The credit card is then issued against that deposit. Since the FD provides security, the lender's risk is lower.

• The credit limit is usually linked to the FD amount. Depending on the issuer, it may be a percentage of the deposit rather than the entire amount.
• Some cards also allow the FD to continue earning interest while you use the card.

Add-On Credit Card From a Family Member

An add-on card is issued to a family member against the primary cardholder's account. It can give you access to a credit card even when your own application may not qualify for a standalone card.

• The primary cardholder remains responsible for the outstanding dues.
• This type of credit card does not build your CIBIL Score in the same way as having your own primary credit account.
• Reporting practices can depend on the issuer and account structure.

Low-Eligibility or Entry-Level Credit Card

Some entry-level cards are designed with relatively modest eligibility requirements. They may have lower credit limits and fewer premium benefits. That can actually be useful when rebuilding credit.

Secured Credit Card

A secured credit card is backed by collateral. An FD-backed card is the most common example.

• With an unsecured card, approval is primarily based on your creditworthiness and other eligibility factors. With a secured card, the lender also has security to fall back on.
• This makes secured cards relevant for people with poor credit histories as well as those with little or no credit history. They can also offer ordinary card features such as rewards or cashback, depending on the product.
• Before choosing one, check exactly what asset is being pledged and what happens to it if you default.

Credit Card Against a Savings Account

Some financial institutions may offer credit facilities linked to an existing savings relationship or require funds to be maintained with them. This can be useful because an established banking relationship may simplify verification and give the issuer more information about your financial behaviour.

• This option is not as universal as an FD-backed card.
• Availability and eligibility vary significantly between issuers.
• Do not confuse a debit card linked to your savings account with a credit card. A debit card uses your own deposited money. A credit card provides a line of credit.

What to Check Before Applying for a Credit Card With a Bad CIBIL Score?

Approval should not be your only filter. A card that approves you but costs too much can make your financial situation worse.

Annual Fee

Check both the joining and renewal charges. Also look for annual-fee waivers and their spending conditions.

Interest Rate

Credit card interest can become expensive if you carry a balance. A low-limit card is not automatically a low-cost card.

Credit Limit

A small limit may be perfectly adequate for rebuilding credit. What matters is whether you can comfortably keep spending under control.

FD Requirement

For secured cards, check the minimum FD, the percentage of the FD available as credit and the conditions for closing or breaking the deposit.

Rewards

Do not let cashback or reward points distract you from the actual cost of the card. A higher annual fee is not a bargain simply because the card offers attractive rewards.

How to Use a Credit Card When Rebuilding Your CIBIL Score?

Once you get a credit card, use it carefully. These simple habits can help you build a better credit profile:

Pay on Time

Always pay your bill by the due date. A missed payment can hurt your CIBIL Score.

Pay the Full Amount

Avoid paying only the minimum due. Paying the full bill helps you avoid interest on the unpaid balance.

Keep Spending Low

Try not to use most of your credit limit. Keeping your credit utilisation low shows that you are not overly dependent on credit.

Avoid Multiple Applications

Do not apply for several credit cards at the same time. Each application can result in a hard enquiry on your credit report.

Check Your Credit Report

Review your report regularly for incorrect payment details, overdue amounts or unfamiliar accounts. Report any errors to the lender or credit bureau.

You can earn JioPoints by paying for your credit card through the JioFinance app. Click here to learn how to make your payments work for you.

The Bottom Line

A low CIBIL Score can narrow your credit card choices, but it does not necessarily eliminate them. Secured and FD-backed cards can reduce the lender's risk, while add-on and entry-level cards offer other routes depending on your finances. You can also use JioFinance to explore credit card options that match different aspects of your personal finances.