Are Flipkart PayLater and Amazon PayLater good options for starting Credit History

[GautamMKGarg]

If a person never had a credit card, is it good option to start credit history with Amazon Pay Later or Flipkart pay later? Are there any downsides of using these pay later services? Will paylater server be better choice or he/she should go with secured credit card?

 

[romilq]

Secured card is better. My friend came from abroad last year and had no history. I opened Onecard with 5k FD for him. Score was generated in 2 months and since then he got 4 credit cards issued unsecured.

 

[Chaitanya-a]

Stay away from Pay later services. These are shown as Personal loan and create negative image of your credit profile.

Instead, if you've stable income and good relationship with branch, apply directly with your branch agent and they'll make sure your application gets approved with the income documents submitted.

 

[RkrRkr is verified member.]

I suggest , go for Fd based secured card .If you are not comfortable for secured cards then only go for pay later options...Anyway both are good for building credit history for New Customers in credit system..

 

[sagar0sammy]

these show up as personal loans so avoid that and get any credit card available to you

 

[iSaurabhSri]

I opened Pay later account with Amazon only for credit score building in the last month of Feb 23, my Experian and CIBIL scores reached 840 and 764 respectively within two months. Got excited, did some rookie mistakes, got 6 inquiries on CIBIL, 2 of them was purposely done by me, rest 4 of them were unintentionally, out of 4, two were from Axis bank, one for Airtel-Axis card, one for KIWI, received offers from them so I applied but got rejected, one inquiry was from SBM bank when I applied for One Card against FD, one inquiry was from IDFC. So my after all that adventures, my credit scores fell by a good margin, CIBIL took hit of 15 points, Experian took hit of 90 points.

I downloaded my Credit Report from PaisaBazaar app. I noticed that lending partners of Amazon Pay later don't report to credit agencies every month so if they had reported reguarly, my score wouldn't have fallen that much. So take my advice, if you have a bank account with a private bank, get a FD based card against FD of 30-40K from them. Don't use more than 30% of the limit. Never miss any bill payment date, it wil take up to 6 months of healthy credit history It's much better than Pay Later services. Getting a card from your bank ensured getting good credit card offers from them in future.

 

[RkrRkr is verified member.]

I opened Pay later account with Amazon only for credit score building in the last month of Feb 23, my Experian and CIBIL scores reached 840 and 764 respectively within two months. Got excited, did some rookie mistakes, got 6 inquiries on CIBIL, 2 of them was purposely done by me, rest 4 of them were unintentionally, out of 4, two were from Axis bank, one for Airtel-Axis card, one for KIWI, received offers from them so I applied but got rejected, one inquiry was from SBM bank when I applied for One Card against FD, one inquiry was from IDFC. So my after all that adventures, my credit scores fell by a good margin, CIBIL took hit of 15 points, Experian took hit of 90 points.

I downloaded my Credit Report from PaisaBazaar app. I noticed that lending partners of Amazon Pay later don't report to credit agencies every month so if they had reported reguarly, my score wouldn't have fallen that much. So take my advice, if you have a bank account with a private bank, get a FD based card against FD of 30-40K from them. Don't use more than 30% of the limit. Never miss any bill payment date, it wil take up to 6 months of healthy credit history It's much better than Pay Later services. Getting a card from your bank ensured getting good credit card offers from them in future.

Excellent suggestion for beginners to credit ecosystem.

 

[D₹V]

Pay Later? No
Credit Card? Yes
Axis might issue unsecured card easily 😅.

 

[1RC]

Here's my advice based on how I started with my credit card journey. Note my CIBIL is 802 and I have no secured loans such as home or car loans. Just credit cards, which are unsecured.

Here's how I started and how I'll say everyone who is starting with their credit journey should go by. (note: this advice is only for working professionals who are salaried; No FD needed).

1. If you have a salary account with ANY Indian bank, again I am talking about Salary Account and not Savings here and there is a reason. If you have a savings then get it converted to salary, wherein you'll be asked to furnish payslips. Do that and get yourself a salary account.
2. Same bank where you have your salary account - apply for their most basic LTF card (read further, why). Don't go all fancy on cards with rewards or cash back which come with some heafty annual fee. Find a card that is either zero fee or a very nominal fee, which feels penny change to you. Banks are generally very open to giving out credit cards to salary account holders, because they understand the expected flow of income.
3. Your credit limit on your first card will not be too high to write home about. But it will be 1.2x - 2.0x of your monthly salary credit. That's good enough.
4. Make sure that you regularly use it for the next 4-5 months. I suggest 10-30% of your credit limit. After 3-4 months of regular use. Your Cibil will be close to 750. That's what any average Indian gets who is paying bills on time and is under the 30% util.
5. Post 6th month stop using the card. Pay off all your balance and let your card cool off. Basically forget about it. Stop using your credit card for a month or two. Your bank (lender) reports all outstanding balance / bill every month. But on the 2nd month of no use, your CIBIL will go up my 8 points as utilization ratio continues to be 0.0%.
6. After you have used your card for 4-5 months and cooled it off for 2 months. You need to do two things post 6th month.
   1. Apply for a new card from a different bank, which is premium and has rewards/cashback features. Apply by giving your salary slip if your take home has increased (preferably apply offline).
   2. Ask your current credit card leader if there is any limit enhancement offer (usually given after 6 months of issuance/upgrade).
   3. Adding a new line of credit or saying yes to limit enhancements, increases your denominator of credit utilization ratio.
7. Circling back to point #2 why I asked you to get your first credit card as a free or very nominal fee card. Because always remember - avoid closing your OLDEST line of credit via credit card. Keep your oldest card alive as it adds depth to your credit history. Hence get a free card which will not be a pain in future even if you don't love it anymore. You can always get the fancy cards and close it if you don't like it but never close your oldest card. A credit history of 7+ years is a great history. With time your CIBIL will go up as long as you continue to pay on time.
8. Finally stick to just 2 credit cards in the early years of your credit history. After you have a mature credit history, only then explore the credit card market.

That's my advice to all working professionals.

Hope this was helpful.

1RC

 

[4uziaul]

Here's my advice based on how I started with my credit card journey. Note my CIBIL is 802 and I have no secured loans such as home or car loans. Just credit cards, which are unsecured.

Here's how I started and how I'll say everyone who is starting with their credit journey should go by. (note: this advice is only for working professionals who are salaried; No FD needed).

1. If you have a salary account with ANY Indian bank, again I am talking about Salary Account and not Savings here and there is a reason. If you have a savings then get it converted to salary, wherein you'll be asked to furnish payslips. Do that and get yourself a salary account.
2. Same bank where you have your salary account - apply for their most basic LTF card (read further, why). Don't go all fancy on cards with rewards or cash back which come with some heafty annual fee. Find a card that is either zero fee or a very nominal fee, which feels penny change to you. Banks are generally very open to giving out credit cards to salary account holders, because they understand the expected flow of income.
3. Your credit limit on your first card will not be too high to write home about. But it will be 1.2x - 2.0x of your monthly salary credit. That's good enough.
4. Make sure that you regularly use it for the next 4-5 months. I suggest 10-30% of your credit limit. After 3-4 months of regular use. Your Cibil will be close to 750. That's what any average Indian gets who is paying bills on time and is under the 30% util.
5. Post 6th month stop using the card. Pay off all your balance and let your card cool off. Basically forget about it. Stop using your credit card for a month or two. Your bank (lender) reports all outstanding balance / bill every month. But on the 2nd month of no use, your CIBIL will go up my 8 points as utilization ratio continues to be 0.0%.
6. After you have used your card for 4-5 months and cooled it off for 2 months. You need to do two things post 6th month.
   1. Apply for a new card from a different bank, which is premium and has rewards/cashback features. Apply by giving your salary slip if your take home has increased (preferably apply offline).
   2. Ask your current credit card leader if there is any limit enhancement offer (usually given after 6 months of issuance/upgrade).
   3. Adding a new line of credit or saying yes to limit enhancements, increases your denominator of credit utilization ratio.
7. Circling back to point #2 why I asked you to get your first credit card as a free or very nominal fee card. Because always remember - avoid closing your OLDEST line of credit via credit card. Keep your oldest card alive as it adds depth to your credit history. Hence get a free card which will not be a pain in future even if you don't love it anymore. You can always get the fancy cards and close it if you don't like it but never close your oldest card. A credit history of 7+ years is a great history. With time your CIBIL will go up as long as you continue to pay on time.
8. Finally stick to just 2 credit cards in the early years of your credit history. After you have a mature credit history, only then explore the credit card market.

That's my advice to all working professionals.

Hope this was helpful.

1RC

You already created a thread here for the same

Advice to young working professionals who are starting their credit journey. (Advice no one asked for; CIBIL 802)

Here's my advice (that no one asked for but someone may need) based on how I started with my credit card journey. Note my CIBIL is 802 and I have no secured loans such as home or car loans. Just credit cards, which are unsecured. Here's how I started and how I'll say everyone who is starting...

www.technofino.in

Please refrain from posting the same thing multiple times.

 

[Cosmicgaze]

I had two cards when I was a student in college, one of the card I defaulted 3 months due to health issues, it got closed after I paid all dues in 3 weeks of them freezing my bank ac. The other card after what happened I was scared to use and it got closed.
My cibil score was under 720 or 700 I don’t recollect was back in 2017. I never had the guts to apply for a cc post that thinking they would see I defaulted 3 payments and show me the exit.
I use Paytm postpaid they gave me a decent limit with just 1% fees. I believe I used it for 2 years, clix finance was the first lender in cibil it used to show personal loan. Score stayed climbed to 780 or so and then the lender changed when that account showed closed my score went up more. Now with Aditya Birla the score did increase as well as drop 6-8 points as they show loan balance and that varies some months they reported different times where balance was low like 200-300 and scores went up. Last in march they reported 90% of the used amount and score dropped. They also do not report monthly mostly 2-3 months. Even closure reflected after 3 months.
If you do not have income don’t wish to get a fd based card you can apply for it it should help your score but keep the usage rather low and pay timely. I find Paytm postpaid very convenient for me.
This month itself I got two pre approved cards. One with an okayish can’t complain for being the first card after years. The other with a very good limit infact better than I had before.


Taking a secured card should be the first choice.