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Among Gen-Z, as many as 45% opted for personal loans at least once. (Representative Image)

People from Uttar Pradesh are the most aware about their credit score, followed by Maharashtra and Haryana, a recent study by TransUnion CIBIL and common service center of Digital India initiatives has revealed. Consumers who want to understand their credit score and try to improve it are allowed to access their credit profiles. More than 1.5 lakh people took part in this survey, which spread across all states and was conducted between April 2020 and March 2021.

TansUnion CIBIL conducted the survey to understand the awareness of the people and empower them to utilise formal credit opportunities. State-level data analysis indicated that the highest number of consumers who used this facility came from Uttar Pradesh (16%), followed by Maharashtra (12%) and Haryana (7%).

Bihar and West Bengal both jointly came in the fourth position with 6%.

This percentage is calculated on the factor of total loanees in the state against how many people taken part in the CIBIL survey.

All other states cumulatively add up to 53%, revealed the study.

North zone is leading

The pan-India study saw the largest share of consumers opting to check their CIBIL Score and Reports come from the north zone (33%). East, west and south zones contributed 27%, 25% and 15%, respectively.

While 81% of these 1.5 lakh consumers had a 3-digit numeric CIBIL Score, 19% were not eligible for a CIBIL Score as they may not have any credit history in the consumer bureau.

Additionally, out of those who were eligible for a 3-digit numeric CIBIL Score, 62% had a score of 720+; 18% had a score ranging from 680-719 and 20% had a score between 300 and 679. The average CIBIL score was 721.

Demographic analysis revealed that 68% of these consumers were millennial, i.e. born between 1982 and 1996, 22% were non-millennial, born before 1982 while 9% were Gen Z, i.e. born after 1996.

Increasing awareness

The study shows that consumers have worked towards improving credit profile within six months of checking their CIBIL Score and Credit Report. As many as 44% of the respondents showcased improvement in their CIBIL score, out of which 46% improved their score by more than 20 points after they come to know the score.

“This improvement in credit behaviour may be attributed to consumers adopting more credit-conscious habits such as paying their credit dues on time, availing credit opportunities with care and monitoring their credit report and score regularly,” said Sujata Ahlawat, Vice-President, TransUnion CIBIL India.

Personal loan

The study revealed there is a marked preference in demand for personal loans and consumer-durable loans across age groups and regions.

Among Gen-Z, as many as 45% opted for personal loans at least once. Demand for personal loans was witnessed among 34% of the millennials and 21% of the non-millennials.

Consumer durable loans or loans for mobile phone, television, fridge or other electronic gadgets buying come next. For gen-Z, millennial and non-millennial groups the demand percentages for these loans are 22%, 21% and 16% respectively, revealed the study.

Gold loan and credit card loan are also in the race, standing at third and fourth positions with 3%, 9%, 18% and 9%, 10%, 8% respectively for gen-Z, millennial and non-millennial segment.

Important points

This CIBIL study reveals a lot of interesting things about the credit score of a person. 72% of the consumers who accessed their CIBIL Score and Credit Report hailed from non-tier 1, 2, and 3 cities.

Tier-1 cities contributed only 17% of the total study. This means people from small towns or cities are becoming more aware than the residents of tier-1 cities. This indicates that the buying capacity of these people is also growing, added Sujata Ahlawat.