Residents in Chennai are the most aware when it comes to credit scores and other financial practices, but they struggle to turn this knowledge into actions, as per a recent survey undertaken by fintech platform CRED and research firm YouGov.
While 65 per cent of those surveyed in the city have a track of their exact credit scores (the highest among all metros), 57 per cent said they had missed credit card payments compared to the national average of 52 per cent. In comparison, only 61 per cent of those surveyed in the financially savvy city of Mumbai had tracked their scores and had the exact knowledge of it and 54 per cent confessed to missing / delaying credit card payments in the last 12 months.
Further, Chennai’s residents also reported that they have faced severe impacts of poor credit scores. 44 per cent of Chennai’s residents said their loans get rejected due to low credit score vs. 38 per cent national average. The corresponding loan rejection rate was at 36 per cent, 32 per cent and 38 per cent for Mumbai, Delhi and Bengaluru resident. 54 per cent of Chennai’s residents also said that a credit score hit led to higher interest rates compared to a national average of 47 per cent.
When it comes to credit portfolio of the city, Chennai has a conventional outlook. Chennai is the lowest in the adoption of mutual funds (56 per cent) among other metros surveyed (Mumbai, Bengaluru and Delhi). Mumbai leads in mutual fund adoption at 69 per cent. Chennai also has the lowest credit card penetration at 80 per cent but showed highest loans adoption at 52 per cent.
Chennai is also traditional in the way it tracks its financial commitments. Between the four metros, Chennai showed highest reliance on using paper records and spreadsheets to track credit card and other payment commitments. Other cities rely more on banking and personal finance apps.
Chennai’s residents are also among those who face the highest levels of stress about being in debt (81 per cent of those surveyed) compared to Mumbai, Delhi and Bengaluru people who are less stressed about taking on debt.
