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Gen-Z is becoming more credit-savvy; I know why; The benefits of a good result and other news

With over 56.8% of Millennials actively monitoring their credit score in FY22, up from 48% in FY21, Generation Z and Millennials have become increasingly important to Indian credit, as stated in a recent Credit Literacy Index report. market. On the role and importance of Gen-Z in the Indian credit market, News18.com chats with Aditya Soni, founder and CEO of B2C credit management platform CheQ.

He said that with about nine million active credit accounts, Gen Z has encouraged lenders to create more robust underwriting models that go beyond credit scores and offer more personalized products and services to fit their lifestyle.

Generation Z or Generation Z are those born between the mid to late 1990s and early 2010s, while millennials are anyone born between 1981 and 1996.

How is Gen-Z shaping the Indian loan market?

Generation Z is fueling the rise in credit consumption in India. Raised at the foot of digital technology, they have access to a wealth of information that helps them make financial decisions. In the past, it was difficult for young consumers to access loans because they had a short or no credit history. Today, lenders are realizing that Generation Z is the consumer of tomorrow and are taking proactive steps to win their trust and business. With approximately 9 million active credit accounts, Gen Z is encouraging lenders to create more robust underwriting models that go beyond credit scores and offer more personalized products and services to fit their lifestyle.

Modern fintech companies and NBFC have played a major role in expanding access to credit for this consumer group through low-interest, no-fee offerings. At CheQ, we want to further improve Gen Z’s relationship with credit by making it easier to understand and manage. Our robust rewards program will encourage good behavior and spur credit growth in the country for years to come.

Millennials are becoming the most creditworthy in the country. What are the reasons behind such popularity among millennials?

The rise in credit consciousness among millennials in India is encouraging. First of all, this can be explained by the growth of financial literacy over the years. Credit has traditionally been a sensitive topic in India and there is very little active discussion around it. We are slowly moving away from this mindset as fintechs and online platforms have active discussions about the importance of credit and its usefulness. Millennials now understand that sound credit management is important to their financial well-being and that a good credit score can go a long way in getting the best car loan or mortgage. This encourages borrowers to start self-monitoring even before they take out a loan.

What are some of the extraordinary benefits that credit scores offer, apart from the well-known ones such as easier loan approval, etc.?

A good credit score can unlock a range of benefits, from low interest rates on loans to higher credit limits. Some of the lesser known benefits include: higher bargaining power compared to lenders for a better interest rate or lower processing fee; You can also get loan approval faster as lenders can make faster decisions about your loan applications, which is especially helpful when you’re in an emergency and need quick funds. Another benefit is that you can get better insurance rates.

Insurance companies use information from your credit report and insurance history to assess your insurance risk, which is why they often penalize people with low credit scores with higher insurance premiums. A good credit score also gives you great bragging rights!

Why is credit monitoring necessary and how can this awareness be raised among all generations?

We need to talk more about credit in order to destigmatize it, and regularly monitoring your credit score is one way to achieve this. This helps consumers understand how their financial activities affect their creditworthiness and identify areas where they can improve and take corrective action.

Regular monitoring of your credit score also reduces the effects of identity theft by initiating immediate and appropriate action. We can increase awareness of a credit score by making it easier to understand, make it more socially relevant, and connect it to actionable data that goes beyond what is available to consumers today.

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Peter Kavinsky is the Executive Editor at cablefreetv.org