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Millions have been denied to get the credit card due to no income proof. Check how you can build a good credit score without having income proof.
The impact of frequent credit card usage on a credit score largely depends on how the card is managed.
Authored by Manish Shara, Co-founder and CEO, ZET: Riya, a 25-year-old freelance graphic designer from Jaipur, recently tried applying for a credit card to buy a new laptop on EMI. Despite earning a stable income from clients and managing her expenses responsibly, her application was denied. The reason? She didn’t have a credit history.
Like many young professionals, Riya had never taken a loan or used a credit card before. She assumed living debt-free was a sign of financial discipline. However, to lenders, it meant there was no data to assess her creditworthiness. And without a credit score, she found herself locked out of the very system she was trying to enter.
For millions, credit score is the invisible barrier to entering India’s formal credit system. Some are New-To-Credit (NTC) which means they’ve never used a credit product. Others have a low or thin credit profile due to past defaults or inactivity. Both groups struggle with access, even if they are financially responsible.
What is A Credit Score?
A credit score is a three-digit number between 300-900 that reflects your repayment behaviour. A score above 750 is generally considered good and anything above 800 is excellent. But what if you’ve never used credit before? Or don’t have a fixed monthly income with documented income proof?
This question affects over 400 million Indians, as per a report by TransUnion CIBIL. And as digital lending grows, your credit score could influence far more than just loans, from jobs to house rentals to insurance premiums.
The Credit Conundrum: Chicken or Egg?
For many first-time borrowers, there’s a frustrating catch: you need a credit product to build a score, but you need a credit score or income proof to qualify for a credit product.
Most banks and traditional lenders ask for documents like salary slips, income tax returns (ITRs), or consistent bank statements to verify income. This creates a barrier for students, gig workers, homemakers, and others working in the informal sector who may earn regularly, but don’t have formal proof of income.
This is the credit conundrum: How do you enter the system when the door requires a key you don’t yet have?
How to Build Credit Score Without Income Proof
The industry is evolving, introducing innovative products that let you start building a credit score without needing a payslip or prior credit history.
Start With a Secured Credit Card (FD-backed)
A secured credit card is one of the most accessible ways to begin building a credit profile. It doesn’t require income proof or an existing credit history.
How it works
You start by opening a fixed deposit (FD) with the bank that offers the secured credit card. Based on the amount you deposit, the bank gives you a credit card with a spending limit, usually 80% to 100% of your FD value. You can use this card just like any regular credit card for everyday expenses like groceries, bills, or travel. As you repay your dues on time each month, these payments are reported to credit bureaus such as CIBIL and Experian, which helps you gradually build a healthy credit score. These cards often come with the added convenience of UPI payments, allowing you to link them to third-party apps and use them seamlessly for everyday transactions.
Because the bank holds your FD as collateral, the risk is lower, so approval rates are high, even for those with no credit score or income proof. This can be the first formal credit product used by new-to-credit individuals and individuals with a low credit score.
Buy Now, Pay Later (BNPL) But with Caution
Buy Now, Pay Later (BNPL) services are short-term credit lines offered by fintechs for shopping or bill payments. Many BNPL providers now report repayment behaviour to credit bureaus. If used responsibly, these can help build your score, but defaults or delays can do more harm than good.
Use BNPL only if you’re confident about timely repayments and treat it with the same seriousness as a credit card.
Smart Habits That Speed Up Credit Score-Building
Once you get access to a credit product (like a secured card) what you do next is what truly builds your credit score. The most important rule is to always pay your bills on time. Even a single missed due date signals risk to lenders and can bring your score down quickly. It’s also wise to use only a small portion of your credit limit (ideally less than 30%). This shows that you’re not dependent on credit and can manage your spending well. Keeping an eye on your credit score through free apps or credit bureau websites helps you understand what’s working and where you need to improve. And as your credit behaviour improves, you can gradually increase your fixed deposit. This not only boosts your credit limit but also gives you more financial flexibility. Stay disciplined and you’ll likely see a clear shift from being credit-invisible to credit-worthy.
Paperwork Shouldn’t Define Your Potential
For far too long, millions of financially responsible Indians have been excluded from the credit system simply because they lack formal income documents. But that narrative is finally shifting. Thanks to secure credit cards, smarter underwriting models, and digital-first fintech platforms, building a credit score is no longer limited to those with payslips and ITRs.
It is authored by Manish Shara, Co-founder and CEO, ZET
The views expressed in this article are those of the author and do not represent the stand of this publication.
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