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Business Standard
24-07-2025
- Business
- Business Standard
Credit score 'negative 1' isn't a crisis: How to improve your ranking
You have landed your first job, opened a salary account and applied for a small personal loan or credit card for the first time. But then you get a message that your application has been rejected, not because of poor financial history, but because you have a credit score of -1. It is a common experience for first-time borrowers in India. Many are unaware that the credit system doesn't just reject those with bad repayment records, it also excludes those with no records at all. What is a credit score? A credit score is a three-digit number, typically ranging from 300 to 900, that reflects your creditworthiness, or how likely you are to repay borrowed money on time. In India, scores are issued by credit bureaus CIBIL, Experian, CRIF High Mark and Equifax based on your loan and credit card usage. A score above 750 is considered strong and leads to easier access to credit at better interest rates. But not having a score, shown as -1, can shut the door before you even step in. 'Your credit score is like your financial reputation,' says Manish Shara, co-founder and chief executive officer of ZET, a credit score-building platform. 'It's not just about borrowing, it can influence everything from your loan eligibility to the cost of financing, and in some cases, even your job or housing prospects.' What does a-1 score really mean? Contrary to what it may seem, a-1 doesn't indicate default, mismanagement, or any wrongdoing. It simply means that there isn't enough information in your credit report for the bureau to assign a score. 'You are what we call credit invisible,' says Shara. 'It's common among gig workers, small business owners, and fresh graduates, people who've never used formal credit products.' According to Shara, over 400 million Indian adults are in this category. 'They're denied credit not because of bad behaviour, but because the system doesn't know them at all.' How to go from -1 to a valid credit score Building a credit score from scratch doesn't require a high salary or extensive financial experience. Here are the tips by Shara on how to begin: Start with a secured credit card: These cards are backed by a fixed deposit, don't need prior credit history, and are ideal for new earners, freelancers or students. Use the card wisely: Make small, regular purchases, groceries, fuel, subscriptions and aim to keep utilisation below 30 per cent of your limit. Always repay on time: Timely full payments are the most powerful input in building your credit profile. Track your score: Monitor your progress every month on platforms like CIBIL, Experian, or Equifax. A visible score usually appears within 3 to 6 months of consistent usage. 'You're not fixing a problem, you're giving the system a reason to recognise you,' Shara says. Final word With financial discipline and a strategy, you can go from being credit invisible to eligible. As Shara puts it: 'Credit access shouldn't depend on where you come from. It should depend on whether you've been given the chance to participate. And building your score is that first step.'
Mint
16-06-2025
- Business
- Mint
What triggers the ‘credit hunger' flag on your credit report and how to avoid it
Credit bureaus are increasingly vigilant about identifying 'credit-hungry' consumers, signalling this behaviour through frequent loan applications or hard inquiries. This can influence your credit score and lender behaviour significantly. Credit bureaus monitor hard enquiries, applications for loans or credit cards. Multiple hard inquiries within a short duration of time may signal credit hungry or loan‑dependence behaviour to lenders. RBI‑mandated fortnightly reporting since January 2025 has fast‑tracked borrowers' activities into credit files. This heightened frequency means high-risk patterns are detected more rapidly. Not only this, as a responsible borrower you should try to ensure that your credit utilisation ratio is kept in check and you are never in a position to be overly dependent on just credit to meet day to day expenses. Sameer Mathur, MD and Founder of Roinet Solution, says 'Credit bureaus typically flag credit hunger based on the type and frequency of enquiries. A soft enquiry, such as checking loan eligibility, is harmless and doesn't impact your score—it simply shows that you're exploring your options. But a hard inquiry, which happens when you formally apply for credit, indicates a strong intent to borrow. When multiple hard enquiries occur in a short span, it signals to lenders that the borrower might be under financial stress.' It is therefore like walking into five different financial institutions and banks in a week requesting them for personal loans. Eventually they will take note of this and presume that you are in financial trouble. That is how credit bureaus see frequent hard inquiries. Echoing this, Manish Shara, Co-founder & CEO of ZET, says 'Applying for several credit cards or loans back-to-back sets off red flags at credit bureaus. This behaviour is commonly tagged as 'credit hungry', often pointing to financial instability or overdependence on borrowed funds. Each hard inquiry slightly erodes your credit score, so a smarter approach is to space out your credit applications, borrow only when truly needed, and maintain a solid repayment track record.' The RBI has mandated lenders to update credit data every 15 days, replacing the old and outdated monthly cycles. That is why, even the speed of loan applications now plays a role, not just the amount borrowed. This shift benefits focused and disciplined borrowers whose consistent on time repayments reflect quickly but also highlights those applying for multiple credit lines in quick succession. Frequent applications are a clear sign of financial stress, a point echoed across industry channels. RBI's goal is to curb over‑leveraging by detecting such behaviour early. So that defaults and bad practices in lending can be curtailed. Lenders may interpret rapid credit applications as default risk, potentially leading to higher interest rates or declined credit. Space out your loan applications to ensure that you minimise hard enquiries. Focus on only applying when necessary. Seek pre-approved offers, all such offers generally use soft checks and don't hurt your credit score or damage your credit profile in any way. Manage credit utilisation by purposefully capping card use below 30‑40 %. This strict practice helps avoid red flags. Monitor your report on a consistent basis, check for any unauthorised inquiries; quickly report any fraudulent applications promptly. In our nation, a healthy credit score (750+) facilitates better personal loan terms and access to premium credit card products from leading financial institutions. Conversely, being flagged for credit hunger can push one into risky interest categories, higher default probability or trigger denials. With faster credit bureau updates, even short sprees in credit seeking can have long lasting effects. Disclaimer: Mint has a tie-up with fintechs for providing credit; you will need to share your information if you apply. These tie-ups do not influence our editorial content. This article only intends to educate and spread awareness about credit needs like loans, credit cards and credit scores. Mint does not promote or encourage taking credit, as it comes with a set of risks such as high interest rates, hidden charges, etc. We advise investors to discuss with certified experts before taking any credit.
Time of India
28-05-2025
- Business
- Time of India
ZET partners with SBM Bank for FD-backed credit card
ZET , a credit score builder platform, and SBM Bank (India) launched an FD-backed credit card designed to help Indians build and maintain a credit score over 750. According to a report by one of India's major credit bureaus, over 160 million consumers were considered credit underserved, and about 50% of the population was credit unserved at the end of 2021. Credit underserved are individuals with minimal credit activity, typically limited to a single type of credit product and no more than two open accounts, active in the credit market for at least two years. In contrast, the credit unserved are those with no credit history , making them credit invisible to lenders. 'A good credit score is essential for accessing better financial products, yet millions of Indians are either new to credit or held back by a low score. With the SBM ZET Credit Card, we are addressing this gap by offering a simple, secure way to start building one's credit history. Our aim is to empower more people to take charge of their financial journey with confidence," said Manish Shara, co-founder and CEO, ZET. Play Video Pause Skip Backward Skip Forward Unmute Current Time 0:00 / Duration 0:00 Loaded : 0% 0:00 Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 1x Playback Rate Chapters Chapters Descriptions descriptions off , selected Captions captions settings , opens captions settings dialog captions off , selected Audio Track Picture-in-Picture Fullscreen This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Opacity Opaque Semi-Transparent Text Background Color Black White Red Green Blue Yellow Magenta Cyan Opacity Opaque Semi-Transparent Transparent Caption Area Background Color Black White Red Green Blue Yellow Magenta Cyan Opacity Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Drop shadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like El patrimonio de Palito Ortega conmociona al mundo. 33 Bridges Undo The SBM ZET credit card, which does not require an existing credit history, helps bridge this gap by providing a safe and reliable way for Indians to build and improve their credit score. It can be linked to any UPI app, and users can earn up to 7% p.a. interest on their fixed deposit with SBM Bank, while utilising up to 90% of the deposit as their credit limit. "At SBM Bank India, we are committed to creating financial solutions that enhance accessibility and drive meaningful impact. The SBM ZET Credit Card embodies this mission by empowering individuals — especially those new to credit — to begin their financial journey with confidence and ease. We are delighted to partner with ZET to introduce a product that is simple, secure, and genuinely inclusive," Kumar Anshumali, EVP - Credit Card, Partnerships and Digital Initiatives, SBM Bank India said. Live Events Unlike unsecured credit cards that require a strong credit score and income proof, the credit card has no such prerequisites. Customers need to open a fixed deposit with SBM Bank, starting at just Rs5,000 and can top up their fixed deposit anytime up to Rs5,00,000 through the ZET app. The fixed deposit is insured by the Deposit Insurance and Credit Guarantee Corporation (DICGC), a wholly owned subsidiary of the Reserve Bank of India , which provides deposit insurance of up to Rs5 lakh. Discover the stories of your interest Blockchain 5 Stories Cyber-safety 7 Stories Fintech 9 Stories E-comm 9 Stories ML 8 Stories Edtech 6 Stories Founded by Manish Shara and Yash Desai, ZET is backed by marquee investors including Sequoia Capital , General Catalyst, WaterBridge Ventures, Nexus Ventures, and angel investors like Kunal Shah, Gaurav Munjal, and Harshil Mathur. Through its B2C credit-building platform and B2B2C agent-led marketplace, ZET offers secured credit products, AI-powered credit guidance, and embedded financial infrastructure for partners.
