India’s cashless transaction market is rapidly changing its present demography. Over 50 million active credit cards show the massive shift to an increasingly credit-centric economy.
Amongst the new credit cardholders, a significant number of individuals are first time applicants. Unfortunately, most of such customers often miss out on some of the features and benefits offered by the financial institutions because of limited information regarding how they can improve their credit card eligibility. So, here’s a quick look at the standard lender requirements along with some tips to help improve one’s eligibility for the card.
Ways to improve your eligibility for a credit card
Financial institutions set eligibility criteria to filter applicants with a higher chance of repaying the debt within a set period. When you apply for credit card, the lender checks your monthly income, existing debts, and credit history to determine your creditworthiness. Your application stands a chance of rejection if you have a history of default in credit repayment, income below a given threshold, and if you hold a credit score below the minimum limit.
However, one can adopt certain ways that can help improve their eligibility, which in turn will increase the chances of availing a feature-rich credit card. Here’s how you can improve your credit card eligibility to get the best option available.
Take steps that can help improve your credit score –
Usually, financial institutions look for credit scores of 750 or above. A high CIBIL score not only improves the chances of approval when you apply for credit card but also increases the chances of availing the best features on such cards.
You can take necessary steps for credit score improvement like availing small credits and paying them off them within the repayment tenure. You can also utilise a credit card to improve your credit score over time and maintain a standard credit utilisation ratio of not more than 40-50%, among other measures.
Clearing your existing debts –
Paying off your existing debts can significantly improve your credit card eligibility. As you clear off the debts, your repayment capability increases significantly. Lenders will be more likely to approve you the desired line of credit in such situations.
Check your credit report for any errors –
You should go through your credit report periodically to ensure that there is no error in recording credit details. Mistakes in the credit report can leave a negative impact on your score, which will further reduce your eligibility. It is a common reason for rejection of a credit card application.
Do not apply for too many cards at once –
It is not a welcome practice to apply for multiple credit cards at once, as each application raises a hard enquiry. Too many such consecutive enquiries within a short span can affect your credit rating. Moreover, lenders may also think that you are too much dependent on advances, which will further reduce your creditworthiness.
Specific cards like the Bajaj Finserv RBL Bank SuperCard also come with several perks and features for their customers, including competitive rates of interest, minimum fees and charges, etc. You also get accelerated reward points which can be redeemed for discounts, gift vouchers, etc.
The card issuer further provides pre-approved offers to existing customers which simplifies the application process and helps save time. These offers are available on several financial products, including credit cards, personal loans, business loans, etc. You can check your pre-approved offer online by sharing only some essential contact details.
Following these tips is essential, especially for an individual availing a credit card for the first time. It will allow them to reap the maximum benefit offered by their selected card issuer.