Millennials are more credit conscious, CIBIL study shows
Chennai Millennials they are more aware of credit and resort to self-control of their credit score compared to non-millennials. Up to 51% of millennials with a score below 700 saw an improvement in their score with an average of 65 points within six months after the verification of their score.
A study by TransUnion CIBIL for the period of February, 2018 and June 2019, has revealed that self-monitoring millennials have an average credit score of 740, which is higher than the non-millennial average of 734.
“On an average, self-monitoring millennials have viewed their CIBIL report and updates for about six times in a year. We have seen a 10x rise seen in credit monitoring among millennials. About 84 lakh millennials, who make for 67% borrowers, checked their score. Meanwhile, 64% of the millennial borrowers, applied for credit within three months of checking their score, and 34% have actually availed a new credit card and opened a new loan account,” Sujata Ahlawat, VP and head of direct to consumer Interactive, TransUnion CIBIL , said.
Credit monitoring agencies including CIBIL , must provide one free credit score for a year for an individual.
“More awareness created among people has given a push towards maintaining a good credit score, of which online aggregators have played a vital role in recent times. 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,” Ahlawat said.
The study further said that 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 this consumer segment. Among secured loans, two wheeler loans and auto loans had the highest demand, jointly contributing to 9% of the total credit pie.
Between 2018-19, number of millennials availing a new credit card or loan grew by 20% (58% growth in 2016-18) and compared to 0.35% growth among non-millennials (14% growth in 2016-18).
Gujarat has ranked highest when it comes to credit -conscious, self-monitoring millennials with an average score of 747, followed by Haryana at 743, and Rajasthan at 742. However, Delhi at 734 and Tamil Nadu at 736 have featured at the bottom of the list. On the whole, about 51% of self-monitoring millennials come from Maharashtra, Karnataka, Tamil Nadu, Uttar Pradesh and Delhi collectively.