Credit Score: Wary of a Good Score, Millennials and Gen Z Actively Track Credit Behavior: Study

Having a healthy credit score is important to Millennials and Gen Z customers and they are increasingly tracking their credit scores, an analysis has found. They reported improvement in their scores in FY22, according to OneScore.

OneScore, an app to monitor credit scores, analyzed data from 9 million (90 lakh) users across India.

It revealed that over 46% of Millennials and Gen Z users had an improved credit score in 2021-22.

Millennials are defined as those born between 1981 and 1996 (23 to 38 years old in 2019) while those after 1997 are classified as the new generation or Gen Z.

The year saw a massive 163% increase in the total number of new customers actively checking their credit scores in 2021-22 compared to the prior fiscal year, according to the OneScore report.

The average credit score for Millennials and Gen Z users was 715 in FY22, nearly unchanged from 714 a year ago.

Those with a mediocre score, 300-747, remained about 63% the same in both years.

Due to growing credit awareness and regular monitoring of credit scores, the platform has seen a 26% drop in late or deferred payments among millennials and Gen Z.

Consumers are increasingly credit conscious and taking an active role in managing their credit health, he said. Millennials and Generation Z are actively undertaking self-monitoring of their credit score.

On OneScore, more than 56.8% of millennials actively monitored their credit score in FY22, up from 48% in FY21.

In the case of Gen Z, the platform grew more than 2.5x, growing from 7.1% in FY21 to 19.1% in FY22.

There was a 16% increase in the average number of times millennials monitored their credit score each year. Kerala ranked at the top in terms of credit-conscious and self-monitored millennials with an average credit score of 726. It was followed by Gujarat, Chandigarh and Delhi with an average credit score above 720.

However, Bihar and Assam were at the bottom with an average credit score hovering around 700.

“Comprising the largest workforce in the country, Millennials and Generation Z are driving a paradigm shift in the way India consumes credit,” said Anurag Sinha, CEO and co-founder of OneScore & OneCard,

Stating that they have a reputation for not being the most savvy with their finances, he said this trend could be seen as changing rapidly.

“There is a growing awareness of the benefits of a good credit rating and responsible credit management among the cohort, which allows for the enjoyment of benefits such as increased access to pre-approved loans. , lower interest rates and longer terms, among others.”