Most borrowers in the country are unaware about the fallout of defaulting on loan payments as well as presence of systems to rate their creditworthiness, says a survey.
As many as 91 per cent of the respondents were found to be lacking awareness about the adverse impact of not paying their loan dues.
The survey, which covered more than 300 people across eight cities, also found that about 85 per cent of the people did not had any idea about the presence of credit bureaus — entities that maintain database of borrowers and help lenders to check their creditworthiness while giving away loans.
Delhi and Pune led with one out of four respondent being aware of credit bureaus. Besides, Delhi, Bangalore and Pune had more than 10 per cent respondents knowing their score.
The primary objective of conducting the survey was to understand the cause and effect analysis of clients who have been through credit impairments. In other words, they wanted to understand the reasons for unavailability of credit to clients due to negative credit history and a low credit score.
The survey revealed protection of credit as a major concern as none of the respondent had taken any steps to protect their identity from theft.
Moreover, 92 per cent of respondents were unaware of their credit scores' ratings given by credit bureaus.
Besides, a mere 4 per cent of the people surveyed had checked their credit scores in last one year and 98 per cent of respondents could not decipher a sample credit report when they were shown one.
The survey revealed that 91 per cent of the customers were not aware of the impact of non-payment of credit dues.
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Source: Secondary
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