How Financial Marketplaces are Making India More Credit Savvy

Though credit score has been in existence in India since the early 2000s, the importance of having a good credit score is now more emphasised than ever. The entire credit ecosystem in India is witnessing growth with more and more Indians becoming credit aware. Loans and credit cards, which were earlier seen by consumers as need-based products, are now catching up as instruments to achieve goals and attain a lifestyle they desire.

Financial marketplaces like Paisabazaar have been instrumental in bringing this shift in the Indian financial space. These platforms not only make credit availability easier but also guide the consumers towards making the right financial decisions.

Here are a few ways how financial marketplaces are making India more credit-informed:

1. Easy and Free Access to Credit Score and Credit Report

Now that consumers have understood the importance of building and maintaining a good credit score, they also require platforms where they can get easy access to their credit score and credit report. A number of financial marketplaces provide free credit score to users with monthly updates. Users can also download their monthly credit report, which includes a detailed analysis of how they are managing their credit accounts. Checking credit reports regularly helps consumers understand the problem points due to which their credit score may be falling and what they can do to improve it.

2. Clear Guidance on Improving Credit Health

Owing to the lack of knowledge and reckless use of credit, a lot of people have poor credit score. Though they understand that a bad credit score will make it difficult to avail credit and may lead to high interest rates on loans, they do not know how to get out of this situation. Financial platforms, through their credit health and credit repair services, help such consumers improve their score. For example, if someone has been paying only the minimum amount due on multiple credit cards, they would be stuck in a debt spiral. In such situation, they may be advised to consolidate their credit card debts. With a poor score, however, securing a new loan may be difficult. This is why approaching this situation with the help of a financial service provider could be the right decision. They would help in availing a personal loan or suggest other solutions.

3. Platform to Compare and Choose

People need to take loans for multiple purposes ranging from medical emergency to covering the cost of a holiday. Those who have good credit scores would be eligible for loans from several providers who would offer them varied rates of interest. It could be a tedious task to visit each provider’s website and compare. Third-party marketplaces allow consumers to check multiple offers on a single platform, compare options and choose the one that best suits their needs. Similarly, individuals looking for credit cards can check their eligibility on these platforms, compare the features and benefits that each card offers and then make an informed decision.

4. Knowledge on Managing Credit Products

For a layman, getting acquainted with financial terminology and learning about credit management would not be easy. Hence, in addition to credit availability and access to credit scores, financial marketplaces also have the responsibility to educate the masses on managing their personal finance. Most of these platforms would have thoroughly researched articles and resources guiding people on how to manage their credit responsibly. Such articles are supported with real-life examples to help readers relate to the problem and find a sound solution. For instance, readers can learn about how certain credit products work, the kind of charges they entail and the mistakes to avoid.

5. Platform for Budgeting and Financial Management

Apart from marketplaces that focus on credit score, loans and credit cards, there are certain websites and apps that provide budgeting solutions to the users. They typically include budgeting tools that would help users set up their monthly budget and monitor how they are managing their cash flow. Some of these apps may also provide goal based saving solutions wherein the users would have to input the purpose for which they wish to start saving, the amount they would like to save, etc. The app would then suggest the right way and the right amount to save in order to reach the said goal within the desired period. While it is possible to budget and manage finances on your own, such apps make the job much easier and hassle-free.

6. One-stop Investment Solutions

Investments seem even more complicated than managing credit cards and loans. It needs continuous monitoring and also involves risk. Hence, a number of financial services platforms focus on providing investment solutions to people pertaining to stocks and mutual funds. Systematic Investment Plan (SIP) is also a popular way to invest these days and several apps help users with it.

While the credit market in India is still growing, it has come a long way with the help of financial platforms. Consumers are now more confident in managing credit products as the myths around loans and credit cards are dissipating. People, not only from metros but from Tier 2 and Tier 3 cities, are now more informed about their benefits and are learning to use credit responsibly.

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