Premium| Listen to this article |
NEW DELHI: Consumers between 35 and 40 years of age are the most credit healthy, while those below 25 years are the least, as per a report by Paisabazaar, a digital marketplace for consumer credit.
Over the last six years, more than 2.7 crore consumers have accessed free credit score and report from the Paisabazaar platform. Analysing the data of its large consumer base, Paisabazaar has launched the second edition of its “Making India Credit Fit" Insights Report.
According to the report, only 28% consumers under 25 years of age have a credit score of over 750, usually considered the benchmark for a strong credit score. On the other hand, 42% of consumers in the age group of 35 to 40 are have a score above 750. The primary reason behind this, according to Paisabazaar, could be that the need to access credit for life-goals like buying a house is most common at this life-stage.
About 75% of new credit score consumers come from tier 2 & 3 cities
Displaying a clear trend of rising credit awareness in the country, the report also showed a sharp rise in the number of consumers from Tier 2 and 3 cities who check their free credit score from the Paisabazaar platform. According to the report, in 2016, only 34% consumers who checked their free credit score from the Paisabazaar platform were from outside the top metros. Currently over 75% of Paisabazaar’s new consumers who check their credit score come from from tier 2 and 3 cities and towns.
“Conversations with customers made us realize that large sections needed to deepen their understanding of credit score. Mere access to their credit report for free was not enough. Language was a road-block, especially beyond the metros. Providing credit report in a jargon-free fashion in a language of their preference has been a great enabler towards higher credit awareness," said Radhika Binani, Chief Product Officer, Paisabazaar.
However, consumers from metros continue to be more credit healthy, with nearly 43% possessing a credit score above 750. On the other hand, around 36% of Paisabazaar customers from non-metros have a score of 750 and above.
Regular tracking of credit score key to credit health
According to Paisabazaar report, continuous monitoring of credit score over a period of time through its platform has helped consumers work towards a strong credit score and enabled them to access credit. According to the Paisabazaar report, over 45% consumers, who checked their credit score through its platform, took at least one credit product within 6 months.
The report also revealed that over 52 lakh Paisabazaar consumers have increased their credit score significantly through regular monitoring and responsible credit behaviour. Also, over 65 lakh consumers, who checked their free credit score from its platform and had DPD (days past due) in their report, have cleared their outstanding debt in the last 4 years.
“Like your personal health, your credit health also depends on you taking the right actions. While being aware and monitoring your score is the first step towards accessing credit, it is also crucial, especially for those with low scores, to understand what has gone wrong for them and take corrective measures to improve and build their credit score. Paisabazaar is focused on being an enabler towards making India credit fit," Radhika Binani added.