Young and Affluent Urban Consumers Among India’s Most Credit-Vigilant Populations
TransUnion surveyed 1,002 urban consumers in India about their credit and financial habits. The results of the survey indicate that nearly three quarters (74 percent)of consumers who took the survey check their credit score at least twice per year.
Respondents reported several motivations for checking their credits score. Nearly a third (29 percent) of the survey participant who have checked said they did so primarily to improve it, while another 28 percent checked in preparation for taking a loan or opening a new credit card.
“Checking your CIBIL score and report before applying for a loan or credit line is an important step, but that should not be the only approach to credit management,” said Mr. Hrushikesh Mehta, Vice President and Head of TransUnion CIBIL’s Direct-to-Consumer business. “To be truly financially healthy, monitoring the information in your credit report should be treated as a credit health management exercise and should be done on a regular basis.”
The survey results suggest that, in general,urban Indian consumers care about achieving or maintaining good or excellent credit scores – a score of 750 or higher – even though they do not necessarily understand how it is used.
A surprising 62 percentdidn’t know that lenders check consumer credit scores in order to determine the terms of a loan, and 63 percent didn’t know that mobile contract providers may use CIBIL scores to set post paid credit limits.
The research shows that attention to credit varies demographically in India. Young urban adults are among the most credit-vigilant in India. Nearly half (49 percent) of adults ages 18 to 24 years old who ever check their credit scores do so primarily in order to improve their scores, compared to a mere 20 percent of those ages 45 and older.
Similarly, from and amongst the survey participants, it appears that Indian consumers with highincomes(INR 500,000 or more) check their credit scores more often than those in lower income groups. Specifically, 77 percent of middle class consumers (INR 500,000 to INR 4,999,999 per year) checked their credit scores at least twice per year, compared with 65 percent of lower income consumers (less than INR 499,999 per year). Indians with an income of INR 5,000,000 or more per year are most likely (90 percent) to check their score twice per year.
“A credit score is an integral part of a consumer’s financial health,” said Mr. Mehta. “It can help them purchase a house, car or open a credit card, and these findings reveal a need for stronger credit education.”following resources:
To help maintain a healthy credit score and financial profile beyond simply checking credit scores and reports, Mr. Mehta offers the
Pay on time and in full each month: Always pay bills on time as this is one of the main contributors in maintaining a healthy credit score and history. In addition, paying the minimum monthly balance can increase the amount of interest paid, which may have a negative impact on credit.Instead, pay off credit card balances and other debts in full whenever possible.
Mix your credit: Consumers are encouraged to have a healthy mix of secured loans, such as home or auto loans, and unsecured loans, such as credit cards or personal loans. Too many unsecured loans may be viewed negatively by lenders.
Maintain low credit utilization: A credit utilization ratio represents how much credit you use out of your available credit limit. Consumers who maintain a low credit utilization ratio are typically viewed as more responsible to lenders.
Be cautious with opening credit lines: Frequently opening new lines of credit can negatively impact credit by signaling a need for fast cash to lenders.
Check credit reports for inaccuracies: Review your credit report regularly and check for any inaccuracies in the report. If any errors or inaccurate data is included, report the errors immediately. TransUnion CIBIL offers one free credit report and score annually.
About the Survey
All figures, unless otherwise stated, are from a YouGov Plc survey conducted on behalf of TransUnion. Total sample size was 1,002 adults. Fieldwork was undertaken between 10/04/2017 – 16/04/2017. The survey was carried out online. The figures have been weighted and are representative of the urban population of all Indian adults (aged 18+).
About TransUnion CIBIL – Consumer Interactive
Consumer Interactive is the direct-to-consumer division of TransUnion CIBIL, India’s largest credit information company with one of the country’s most comprehensive collections of consumer information. Our mission is to help Indian consumers access and understand the opportunities that lead to a higher quality of life by providing them with means to appreciate and manage their credit. This is achieved through a confluence of data and internet-based tools that provide consumers the most accessible, accurate credit information and promote financial literacy, inclusion and protection. We believe in the power of information to help individuals make better and smarter decisions so they can achieve their personal financial goals while contributing to the development of a stronger economy.
We call this Information for Good.
To learn more about TransUnion CIBL – Consumer Interactive please visit cibil.com
