Rising credit-consciousness is a new trend among millennials. Between 2016 and 2018, the credit-consciousness among self-monitoring Indian millennials grew by 58 per cent, says a study by TransUnion CIBIL. It further said that millennials are one of the most credit-conscious consumer segments in the country. They self-monitor their credit scores regularly and have an average CIBIL Score of 740.
According to Sujata Ahlawat, VP and Head – Direct to Consumer Interactive, TransUnion CIBIL, millennials are conscious of checking their CIBIL score and report regularly. “On an average, self-monitoring millennials view their CIBIL report or view updates about 6 times in a year. While 64% of them apply for credit within 3 months of checking their score, 34% actually avail of a new credit card and/or open a new loan account. They now realize the importance of building and maintaining a positive credit footprint and high CIBIL Score. This credit awareness will help them be ready to take advantage of lenders’ offers such as lower interest rates while applying for large ticket loans such as home loans,” said Ahlawat.
The study shows that millennials also demonstrate a conscious effort to work towards improving their CIBIL Score. Within six months of checking their score, 51 per cent of those millennials with a score below 700 have improved their CIBIL Score by an average of 65 points.
Millennials’ Credit Preference
Credit Card is the most popular means of credit, followed by consumer loan, personal loan, two-wheeler loan etc. The self – monitoring millennials show a preference for unsecured loans, with credit cards, personal loans and consumer durable loans contributing to 72% of all loans availed by them. Among secured loans, two wheeler loans and auto loans had the highest demand, jointly contributing to 9 per cent of the total credit pie.
The study says that 51 per cent of self-monitoring millennials come from Maharashtra, Karnataka, Tamil Nadu, Uttar Pradesh and Delhi collectively. Millennials from Gujarat rank highest in credit-consciousness with an average score of 747. Gujarat is followed by Haryana at 743, and Rajasthan at 742. Delhi features at the bottom of the list with an average CIBIL Score of 734 and Tamil Nadu at 736.