Your credit score comes into the picture once you borrow. This score helps the bank to determine your credit worthiness; accordingly, you can apply for a credit card or a personal loan.
It is possible that you have never borrowed in the past and are looking to apply for a credit card. The question you may ask is “Is it possible to get a credit card without a credit score?”
The answer is yes. You are eligible to apply for a credit card, but there are some points you should consider.
Since you don’t have a credit score, it will be difficult for the bank to comment on your credit payment behavior, and they will not allow you to apply for unsecured credit cards.
A credit score is important if you are looking to deal with credit cards or loans. The credit score generated by the credit bureau helps the bank or the lending institution decide the credit worthiness of the loan or credit card applicant. A good score allows you to easily apply for a credit card in the future.
One point a new borrower should consider: You can only apply for a secured credit card and are not eligible to apply for an unsecured credit card.
A card backed by security in the form of a cash deposit by the card holder is a secured credit card. The deposit acts as collateral in case the cardholder is unable to repay the credit amount. Secured credit cards are issued to borrowers with limited or no score. Some banks allow you to apply for a secured credit card against a Fixed Deposit account, where the money in the FD account serves as the credit collateral. Usually, the credit limit is 90% of the money parked in the FD account.
A regular credit card is also known as an unsecured credit card. You don’t have to deposit any collateral to avail yourself of such a card. A borrower having a credit score can apply for such a card that suits his or her requirements. The credit limit is finalized based on the borrower’s credit score and monthly salary.
Salary account holders have a good chance to get a credit card from any bank without sharing any previous credit history. They just need to show a steady income for a period of 12 months.
If you don’t have a credit score, you can still apply for a credit card. Remember to plan your credit requirements and never over-run your credit beyond your capability to repay. Late repayment may lead to additional charges and taxes.
