A recent study reveals that nearly half of Indian consumers have never checked their credit score, leading to potential financial disadvantages. The "State of Credit Score Awareness in India 2025" report by Zet Technolabs indicates that 45% of respondents have never accessed their credit information. This lack of awareness can result in higher borrowing costs, loan rejections, and missed financial opportunities.
The study, which surveyed over 1,000 individuals in Tier-I, -II, and -III cities, highlights a significant gap between understanding and action. While 75% of respondents were aware of what a credit score is, their engagement with it remained low. This "structural gap" in financial discipline results in individuals making financial decisions without understanding how lenders perceive them.
One of the key misconceptions identified in the study is the belief that frequently checking one's credit score can negatively impact it. This myth discourages individuals from actively monitoring their credit health. Additionally, a quarter of the respondents were unaware of who generates their credit score, and many incorrectly believed that a score between 500 and 700 is sufficient, while a good score is generally considered to be 750 or higher. Some participants even linked credit scores to salary or income, demonstrating a fundamental misunderstanding of the factors that determine creditworthiness.
The consequences of this lack of awareness can be costly. Approximately 30% of those surveyed reported facing loan or credit card rejections due to a low or non-existent credit history. For example, a shopkeeper in Nagpur discovered his poor credit score only after multiple home loan applications were denied. Ultimately, he secured a loan at an interest rate 1.6% higher than the best available, costing him an additional ₹8.5 lakh over 20 years on a ₹35 lakh loan. Similarly, a doctor in Mangaluru was rejected for her first loan due to a lack of credit history, highlighting how a lack of awareness can create unforeseen barriers.
These findings underscore the need for increased credit literacy and awareness in India. A credit score, typically ranging from 300 to 900, reflects an individual's repayment history, credit mix, credit age, and outstanding balances. Maintaining a score above 750 can lead to faster loan approvals, lower interest rates, reduced insurance premiums, and even better career prospects.
While credit self-monitoring in India has grown, with approximately 119 million Indians actively tracking their credit profiles as of March 2024, this represents a small fraction of the adult population. It is crucial to dispel myths surrounding credit scores and educate individuals on the importance of regular monitoring and responsible credit behavior. Increased awareness empowers consumers to take control of their financial health and access credit opportunities on more favorable terms.
