How do I get a credit card with the minimum criteria?
With every credit card that is issued by the bank or credit card company, they are taking huge monetary risks. Therefore, credit card companies scrutinize every applicant’s credit profile and application form carefully.
Before you look up, “How to apply for a credit card?” online, make sure you know about some of the basic criteria that you need to meet. You need to be above the age of 18 (or 21 or 23, depending on the issuer), and be a resident of India. Other than this, there are multiple other criteria that determine your credit card eligibility. We elaborate on the bare minimum criteria that you should meet before applying for a credit card.
1. Maintain a good credit score
Your credit score is a direct representation of your credit history. It is a number that is assigned by the credit bureau based on your repayment history, punctuality, and the number of loans you’ve availed. Therefore, in order to maintain a good credit score, make sure you pay all your EMIs and credit card dues on time. Timely repayment of dues gives the impression of a responsible borrower to the lenders.
Thus, your chances of being granted a credit card significantly increases. Other than this, there are other things that impact your credit score. If you have a high credit utilization ratio on your previous credit cards, that will hamper your credit score. The credit utilization ratio is the percentage of the total credit limit that you use. Having a high credit utilization ratio means that you’re in great need of credit and that you are in financial trouble. That would make a lot of lenders hesitant about approving your credit card application.
In order to increase your credit score, you can also have multiple credit cards. This way, the total amount of credit used gets divided and doesn’t affect your credit score. Furthermore, having many credit cards also shows you as an experienced cardholder and helps you build a long credit history. Following these tips, if you can keep a credit score of at least 700 to 750, you will be eligible for most credit cards. However, this number might vary, and the final decision is solely taken by the lenders.
2. Have a healthy debt-to-income (DTI) ratio
The debt-to-income or DTI ratio is the amount of your total income that goes into paying off debts. Naturally, if you have a high debt-to-income ratio, you’re more likely to be under a lot of financial pressure. That makes the lenders think that you would not be able to handle another line of credit, and would succumb to the situation. Therefore, make sure to minimize the number of loans you have before applying for a credit card. Pay them in advance or wait for their tenures to end before you send in your credit card application. This includes personal as well as home loans, education loans, or car loans.
In India, a DTI ratio of 30 to 35 percent is sufficient to make you eligible for a credit card.
3. Show verified proof of income
Credit card issuing banks and companies also want to see your source of income and how much you earn. Your source of income can be confirmed by your salary slip, proof of business, or your recent bank statement. Having a verifiable source of income is one of the major criteria you need to fulfill. Other than this, your earnings also influence the lender’s decision. If you earn more, you would usually have a better chance of getting a credit card.
Thinking about applying for a credit card? Apply for the Bajaj Finserv RBL Bank SuperCard online. All you need to do is go to the official website, register your mobile number, and a representative will contact you shortly about the process. The card comes with multiple benefits and has the power of 4 credit cards all rolled into one.