'New, young loan seekers show better creditworthiness'
Get email alerts for your favourite author. Sign up here
While banks and other lending institutions are too cautious in lending to new and young customers, figures reveal that new-to-credit (NTC) consumers tend to prove lower risk and build a higher credit score when they are given credit opportunities. In other words, they are making timely repayment without defaulting on their loans, showing higher creditworthiness.
Of the NTC consumers who were given loans in January 2019, as much as 72.30 per cent had a credit score of 700 plus — prime category — in January 2020, said TransUnion CIBIL. When compared to this, of the 'below prime' existing-to-credit consumers (Cibil score of 300-699) who were given credit in January 2019, only 47.29 per cent had a score of 700 plus in January 2020, the credit information bureau added. A majority of India's population is under 40 years of age and this group is most likely to seek their first ever loan or credit card from banks and credit institutions.