‘Credit score is the new festive currency’, India’s shopping season just got smarter

In India, the festival season has just begun, and its does not only brings joy and celebrations but also brings in renewed vigour in the economy by increased demand for consumption. These festival times are when all big and small brands have discounts, offers for consumers. It’s the period when consumers invest in pig purchases like consumer durables, automobiles, jewellery, and even holidays, encouraged by both auspicious timing and pleasant weather.

This period begins with Dussehra and Diwali and continues beyond Christmas and the New Year, marking the period for high consumer spending. It is also the time when we see a rise in credit uptake, as consumers and businesses both seek credit for their festive aspirations.

Credit as the enabler of festive aspirations

While credit today is not just a financial tool, but a means to enjoy experiences and fulfil aspirations - whether it’s upgrading to a new car, buying the latest smartphone, or planning the long-awaited luxury vacation. Credit allows consumers to spend today and pay later, basically concept of “Buy Now, Pay Later” perfectly defines this.

Many financial institutions - from traditional bank loans to credit card facilities and instant consumer finance options- credit empowers individuals to make timely festive purchases without waiting for cash inflows. This accessibility to funds helps sustain festive enthusiasm while balancing short-term liquidity.

Credit powering small businesses, too

This is not only true for individual consumers but is applicable to Small and Medium enterprises (SMEs), where it plays a crucial role in meeting the surge in demand during this period. Local manufacturers, shop owners, and service providers often need to increase short-term production or inventory just before the festive season, but this is even before sales revenues begin to flow in.

To meet these temporary financing needs, SMEs increasingly rely on working capital loans, business credit lines or invoice financing. Credit allows them to purchase raw materials, pay suppliers, compensate workers, and transport goods to marketplaces on time. Without this financial support, many small businesses would miss out on the seasonal opportunity to grow and capitalise on festive consumer spending.

Why your credit score matters more than ever

In this credit-driven ecosystem, both for individual consumers and business owners, credit score has become the new festive currency. It serves as your financial power to achieve long-term growth aspirations. A healthy credit score indicates a responsible financial behaviour and helps lenders assess creditworthiness.

Most banks, NBFCs, and digital lenders today use advanced data analytics and AI-based credit models to personalise credit offers based on credit score, payment history, and usage patterns.

Borrowers with high credit scores can take advantage of better credit terms, including lower interest rates, higher credit limits on cards or personal loans, longer terms, and a faster approval process. Therefore, especially during these costly holiday months, having a high credit score can make borrowing simpler and more efficient.

Building and maintaining a healthy credit profile

In order to unlock these advantages, individuals and businesses must adopt credit discipline. Financial discipline does not mean avoiding credit but managing credit responsibly to maintain a strong credit score. Here are a few key practices to follow:

• Repaying all EMIs and credit card dues.
• Keeping credit utilisation to a minimum
• Avoiding multiple credit inquiries.
• Monitoring joint obligations or credit facilities where you are a guarantor
• Reviewing the credit report regularly.

The future of credit: Personalised and predictive

With the increasing use of data and analytics, credit is becoming increasingly personalised. Lenders no longer offer one-size-fits-all products to borrowers. The credit terms, such as interest rates, tenure, and credit line, are offered based on each borrower’s credit profile and repayment patterns. A consumer with a consistently high credit score may receive a lower-interest rate offer or a higher term on EMI on credit cards.

Similarly, small businesses with strong repayment histories may receive pre-approved working capital loans at lower rates. This evolution in credit underwriting benefits both lenders and borrowers; it minimises risk for financial institutions and rewards disciplined borrowers with better terms.

Conclusion: Your credit is your festive superpower

As India steps into another vibrant festive season, your credit score is your new festive currency. It can determine not just whether you get credit, but also how much the credit costs and how easily you can access it. Managing your credit responsibly will ensure how you celebrate, shop, plan holidays, or invest in new assets this festive season.

Disclaimer: The information provided in this article is for informational purposes only and does not constitute financial, legal, or professional advice. While every effort has been made to ensure accuracy, readers should verify details independently and consult relevant professionals before making financial decisions. The views expressed are based on current industry trends and regulatory frameworks, which may change over time. Neither the author nor the publisher is responsible for any decisions based on this content.

Sachin Seth, Chairman CRIF High Mark and Regional MD CRIF India & South Asia