Almost 50% Indians don't check credit score, most believe in myth: Study

Credit Score: 'Structural gap' in financial discipline leads to loan rejection and expensive interest rates, it says

Almost half of Indians have never looked at their credit scores and most of them wrongly believe that checking it frequently will reduce their numbers, said a study on Thursday.

 

“This is not a matter of curiosity, it is a structural gap,” said the State of Credit Score Awareness in India 2025 report by Zet Technolabs. The study — it took responses from more than 1,000 people in Tier-I, -II and -III cities — found that 45 per cent of respondents had never checked their credit score, which is used by lenders to approve loans or credit cards.

 

While 75 per cent of respondents knew what a credit score is, their actual engagement with the metric was “very low”.

 

Cost of ignorance Credit Cibil Score

The consequences of this gap are costly. Nearly 30 per cent of respondents reported having faced loan or credit card rejections due to low or no credit history. The study cited the example of Bhushan K, a 38-year-old shopkeeper in Nagpur, who discovered his poor score only after several lenders rejected his home loan application. By the time a bank approved him at a higher interest rate 1.6 per cent above the best available, Bhushan ended up paying an additional Rs 8.5 lakh over 20 years on a Rs 35 lakh loan.

 

Nidhi Shenoy, a 25-year-old doctor in Mangaluru, was rejected when she applied for a loan for the first time because she didn’t have a credit history. “I had no idea a credit score could even be a barrier,” she was quoted in the study as saying.   

The study listed myths and facts about credit history:

 

Myth: Checking your credit score lowers it.

 

Fact: Checking your own score is a soft enquiry and has no impact.

   

Myth: Salary and job title improve your credit score.

 

Fact: What matters is how you use and repay credit, not how much you earn.

   

Myth: Closing old credit cards is good practice.

 

Fact: It can hurt your score by reducing the average age of your credit history.

 

Why credit score matters

 

A good credit score, typically 750 and above, improves your chances of loan approval. It can lower interest rates, reduce long-term borrowing costs, and even influence insurance premiums or job applications in the future.

 

“People know the score matters but not the scorecard that builds it,” said Jiju Raman, business head, consumer services, at Experian India. “Timely payments are just one part. Maintaining a healthy credit mix, low utilisation, and keeping old accounts active are equally important.”