A credit monitoring platform stated in a recently released report that India’s average credit score for FY22 stands at 715. Nearly 46% the millennial and Gen Z users had an improved credit score in FY22. Millennials in India comprise 34% of the total population, making it one of the largest millennial populations in the world. Gen Z and Millennials are estimated to make up 50% of India by 2030.
They are leading the way in rising credit score trends due to several factors. Millennials are well-equipped to handle their finances and make wise credit decisions as they become more and more financially savvy and knowledgeable. Also, with the rise of the internet and digital technologies, young people in India have more access to information and resources than ever before, which made it easier for them to learn about the importance of financial discipline, improving financial health, and building and managing wealth.
Rising credit score trends also point to an uptick in the desire to secure loans and other forms of credit for major life milestones such as buying a house or starting a business. Young adults who are employed and want to borrow money to support their dreams and aspirations are becoming increasingly cautious with their credit record
The ease of credit access has also helped amp up credit discipline. Today, many banks and financial institutions offer online loan applications, credit card applications, and other financial services that can be accessed from the comfort of one’s home. In 2022, millennials constituted 44% of total transactions for lending products.
Furthermore, the Indian Government has taken several steps to increase credit penetration and drive financial inclusion, such as launching Jan Dhan Yojana, Pradhan Mantri Awas Yojana, and other government initiatives have made it easier for individuals to access credit, with loan borrowers not limited to Tier 1 cities anymore. In addition, the increased use of credit scores by lending institutions as a measure of creditworthiness has further emphasized the importance of maintaining a good credit score among millennials.
Indian credit score trends indicate increased access to financial education and resources, a greater emphasis on financial planning and responsibility.