Growth in Indians Self-Monitoring Their CIBIL Report to Access Credit Opportunities and Manage Debt, Reveals New TransUnion CIBIL Study

• Over half (57%) of Indians who monitor their CIBIL Report do so to help obtain new credit, and 20% look to better manage debt.
• Those consumers who are early in their credit journeys and underserved consumers, that monitor their credit, significantly benefit from greater credit access
• Credit monitoring consumers looking to improve their credit profile benefit from higher score improvements.

Mumbai, Feb. 20, 2024 — With the number of Indian consumers enrolling to monitor their CIBIL Report and Score showing a 73% year-over-year (YoY) growth rate in 2023, a new TransUnion global study has found that the motivations for consumer credit monitoring are diverse. TransUnion CIBIL’s consumer bureau data shows that the largest share of consumers (57%) monitor in anticipation of opening a new credit account, while nearly a quarter (23%) seek to improve their CIBIL Scores, and 20% do so to better manage their debt levels.

To better understand the distinct profiles, motivations and future outcomes of credit monitoring consumers, TransUnion conducted a global research study examining credit behaviours for millions of consumers in developed and developing markets – India, Brazil, Canada, Chile, Colombia, Dominican Republic, Guatemala, Hong Kong, Philippines, South Africa, the United Kingdom, and the United States. To further identify how these benefits advance credit education and enable financial inclusion, the study used depersonalized credit data to analyse these outcomes for key consumer credit segments: Consumers who are early in their credit journeys, underserved, and credit served consumers.

“India’s growth story gets a strong foundation with improved consumer awareness about credit management as revealed in this study, which shows a remarkable increase in consumers monitoring their credit report and improving their CIBIL Score after accessing it,” said the Senior Director and Head of Consumer Interactive (Direct-To-Consumer) India - Bhushan Padkil. “Our study measures the importance of credit education and quantifies the benefits that credit monitoring consumers experience. These benefits are shown to lead to better credit profiles, greater access to credit, or an improved ability to pay down debt, depending on the intent of consumers who monitor credit.”

In India, 92% of surveyed* consumers stated that it is important to monitor their credit, with nearly two fifths (39%) saying it’s extremely important. This finding demonstrated that consumer awareness of credit monitoring is high and is a likely driver behind the surge in monitoring activity in recent years.

TransUnion surveyed* consumers to understand their initial intent to sign up for credit monitoring services, and the actual benefits they have experienced after doing so. The survey findings show that the most common reason Indian consumers initially signed up for credit monitoring services was to improve their CIBIL Score (38%), to protect against fraud (34%), and to learn of credit offers they qualify for (29%).

Additionally, after using monitoring services for some time, consumers reported added benefits that credit monitoring has allowed them to achieve: learn how to monitor and manage their CIBIL Score (43%), get better credit offers (43%), learn how to make regular payments (40%), gain visibility to changes on their credit report (33%), and pay down debt (28%).

The study further identified three distinct segments of credit monitoring consumers based on their primary motivation for monitoring their credit. These include Credit Seekers, Credit Managers, and Credit Improvers.

Credit Seekers Benefit from Attaining New Credit

Over half of the credit monitoring population (57%) availed credit within 12-month period from the day of monitoring their credit report for the first time. Credit Seekers are consumers with near prime[1] and above credit scores who monitor their credit with the intention of opening new credit accounts in the near future. When comparing Credit Seekers who monitor their credit to those who do not, consumers who monitored credit opened 2x more credit accounts, such as credit cards and personal loans, over the following year.

Those consumers who are early in their credit journeys (consumers opening their first credit product and hence less than 2 years of credit history) and underserved consumers (those less engaged in the credit market overall) saw similar higher levels of new credit activity in the credit monitoring segment. Consumers who are early in their credit journey and who monitor their credit displayed 2.74x higher origination rates for any credit type than those with no history of monitoring their credit, and for served credit monitors, the rate was 1.77x.

“Consumers who typically have a more difficult time expanding their credit profiles such as those who are early in their credit journeys and underserved, credit monitoring can be a crucial enabler of greater credit education and access,” observed Padkil.

Percent of Consumers Originating a New Personal Loan

within One Year of Starting Credit Monitoring

* Non-monitoring consumers were analysed over the same time from the date when credit monitoring consumers with similar credit profiles began monitoring services

Credit Improvers Benefit from Improving Scores and Staying Current on Obligations

Credit Improvers, who make up 23% of the Indian credit monitoring population, are defined as consumers with subprime credit scores who likely use credit monitoring to understand their current credit profile and take steps to improve their credit scores.

The study found that Credit Improvers in India generally experienced CIBIL Score improvements of 22 points, on an average, one year after they started monitoring their credit. The improvement was even better, at 27 points, for those consumers who are early in their credit journeys. In both instances, the improvement in scores was better than a comparison set of consumers who have no history of monitoring their credit.

Median Score Improvement One Year After Starting Credit Monitoring

* Non-monitoring consumers were analysed over the same time from the date when credit monitoring consumers with similar credit profiles began monitoring services  

While Credit Improvers are a small segment of credit monitoring consumers in India, they also tend to see some of the most impactful benefits in terms of credit improvement. It’s a clear indication that those consumers who are actively looking to improve their CIBIL Scores may achieve better results if they monitor their credit and are able to plan their steps and track their progress.

The study found many Indian consumers (20%) monitor their credit with the intention of keeping an eye on their overall balances and credit health. Credit Managers are defined as consumers with near prime and above credit scores who generally monitor their credit with the goal of reducing or maintaining their balances or monitoring for fraud.

Better Credit Management as a Result of Conscious Monitoring

When surveyed, 28% of all Indian credit monitoring consumers said they were able to pay down debt with improved understanding of credit management as a result of conscious monitoring. In alignment, the study found that Credit Managers decreased their overall balances by an average of 27% within a year after starting monitoring. With consumer credit balances increasing, it’s reassuring to see so many Indians taking the initiative to ensure they are paying down or managing their debt levels.

Another primary motivation cited by consumers categorized as Credit Managers is protecting against fraud. Over one third (34%) of Indian consumers reported that they continue to utilize credit monitoring services over time to detect and protect against fraud. This benefit is of increased importance to consumers considering the continued rise in fraud activity that has been observed since the onset of the COVID-19 pandemic.

Credit Monitoring Benefits for Consumers and Lenders

To help more consumers easily access their CIBIL Scores, many financial institutions offer credit monitoring tools. This easy access not only helps consumers but enables lenders to build stronger relationships with their customers.

Almost one-third of Indian consumers (28%) said they initially signed up for credit monitoring because it was free. Five in ten (50%) said that they would continue to bank with a lender that offered credit monitoring, and nearly half of customers (46%) stated they would prefer the lenders that provide free credit monitoring services over other lenders when opening new products. Nearly half (42%) said they would prioritize payments to that lender over other lenders’ payments.

“Consumers now expect financial institutions to offer credit monitoring services, as it provides them the tools to improve their credit profiles, better manage existing credit, and seek new credit in the future. Offering such services clearly benefits financial institutions as many of their customers are more likely to remain loyal to them for future credit activity,” concluded Padkil.

For more information about TransUnion’s global credit monitoring study, click here.

[1] Credit tiers based in CIBIL Score range: Subprime: 300-680, Near Prime: 681-730, Prime: 731-770, Prime Plus: 771-790, Super Prime: 790+

2 Consumers who are early in their credit journeys are the ones with no prior credit history on their credit bureau file who opened their first-ever traditional credit product such as a vehicle loan, credit card or other product unique to their region and has less than two years of credit experience.

3 Underserved consumers are defined as any person who has two or more years of credit experience, but no more than 2 currently open accounts of one product type ever.

4 Served consumers are those who are credit-visible, active consumers who have two or more years of credit history, currently have three or more credit accounts open, or have had two or more different credit product types currently or in the past.

* TransUnion’s Consumer Pulse Survey of 10,151 consumers was conducted July 6–25, 2023 and 2,400 consumers in Sept. 25–Oct. 18, 2023 by TransUnion in partnership with third-party research provider, Dynata. Adults 18 years of age and older residing in Brazil, Canada, Chile, Colombia, the Dominican Republic, Guatemala, Hong Kong, India, the Philippines, South Africa, the UK and the US were surveyed using an online research panel method across a combination of desktop, mobile and tablet devices. Survey questions were administered in Chinese (Hong Kong), English, French (Canada), Portuguese (Brazil) and Spanish (Chile, Colombia, the Dominican Republic and Guatemala). To increase representativeness across resident demographics, the survey included quotas to balance responses to the census statistics dimensions of age, gender, household income and region. Please note some chart percentages may not add up to 100% due to rounding or multiple answers being accepted.