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More consumers monitor credit score since Covid



MUMBAI: There has been a surge in people seeking to monitor their credit scores in the aftermath of the pandemic. According to data released by TransUnion Cibil, the number of consumers watching their credit score for the first time grew by 83% between October 2021 and September 2022.
According to TU Cibil, the self-monitoring of credit scores is a positive development as customers who checked their records with the credit bureau had a Cibil score of 715 compared to 711 for non-monitoring consumers. Overall, 47% of those monitoring their credit records improved their credit score compared to 42% among non-monitoring customers.
So far, over six crore consumers have checked their credit scores since the credit bureau started operations in 2009, with 2.4 crore checks coming in the last 12 months.
“We can see that Indians are taking a more active role in monitoring their credit information and understanding their credit health. The emergence of digitisation, smartphones, and internet penetration into semi-urban and rural areas have all improved access to credit exponentially,” said TU Cibil MD & CEO Rajesh Kumar.
Younger consumers are more conscious about their credit scores, with Gen Z customers registering a growth of 2.3 times in credit monitoring between October 2021 and September 2022. The Cibil study shows that among those who checked their credit score, 46% applied for a new credit card, while 35% availed of a new credit line within three months.
Following the lockdown in the first phase of the pandemic, the Reserve Bank of India had announced a moratorium on loan repayments. A large section of borrowers had availed of the moratorium, which enabled them to have more cash on hand during a period of high uncertainty. There were fears among borrowers that availing the moratorium would affect their credit score, although it was not the case.
Most new-to-credit consumers have come from non-metros over the last four years in India. These areas are home to more than 76% of self-monitoring, new-to-credit consumers between October 2021 and September 2022.
“Our report’s insights show that emerging youth and women consumers from non-metro geographies are exhibiting increased credit consciousness. Providing access to credit opportunities for this consumer segment will be critical for furthering the consumption-led growth of India’s economy,” said Kumar.


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