Ask the right questions before you borrow: CRIF's Sachin Seth

Sachin Seth, regional managing director, India and South Asia, at CRIFSummaryCRIF India's Sachin Seth discusses how India's credit ecosystem has matured through Jan Dhan, Aadhaar and digital lending infrastructure, and why risk-based pricing and secured credit products like gold loans are gaining traction. Gift this articleCheck your wealthThis is a Mint Premium article gifted to you.Subscribe to enjoy similar stories.

India's credit landscape has changed rapidly over the past decade, with digital lending tools reshaping how people borrow. As part of the Mint Money Guru series, Sachin Seth, regional managing director, India and South Asia, at CRIF, discusses emerging trends in the lending space and the questions people should ask before taking on debt.

If you look at developed markets, credit penetration has traditionally been much higher, whether through credit cards, mortgages, or other formal lending products. Those ecosystems have evolved over several decades and are supported by a mature financial infrastructure.

India's journey has been different, but the progress over the last 10–15 years has been remarkable. Initiatives such as Jan Dhan, widespread Aadhaar adoption, and increasing digitisation have helped build foundational layers for broader financial inclusion. Alongside this, regulatory frameworks, KYC processes, lending infrastructure, and access to capital have continued to evolve. Today, India is well-positioned to build on this foundation. While every market has its own characteristics, many developing economies face challenges similar to India's in assessing creditworthiness for first-time borrowers. What is encouraging is that India has adopted several global best practices while also developing solutions tailored to local realities. That combination has created a unique ecosystem that continues to expand access to credit responsibly.

Lenders today have access to significantly more data, better technology, and more sophisticated analytics than ever before. Machine learning models and advanced underwriting techniques are helping institutions make more informed lending decisions and manage risk more effectively. Like any credit market, India has gone through periods where certain segments required closer attention. For example, over the past 12–18 months, there has been considerable industry and regulatory focus on personal loans and credit cards. In response, lenders have generally adopted a more measured approach to portfolio growth and risk management.

One trend we often see is that lenders prefer to build a relationship with borrowers gradually, starting with smaller-ticket products and increasing exposure as repayment behaviour becomes better understood. Broadly speaking, responsible underwriting and prudent portfolio management continue to remain key priorities across the industry.

Risk-based pricing is a fairly established concept globally. Naturally, the most competitive pricing is generally offered to borrowers for whom lenders have greater confidence in both repayment intent and repayment capacity. Credit scores play an important role in that assessment, but they are typically one of several factors considered. A score provides a useful summary of an individual's credit history, but lenders increasingly supplement that information with additional data points and analytical models to develop a more holistic understanding of risk.

A credit score can be used as an initial cutoff because it is just a summation of everything, but a high credit score doesn’t guarantee good payment behaviour in future. It's also important to look beyond a single score at a point in time. Trends in credit behaviour, repayment patterns, existing relationships with financial institutions, and other indicators often help provide a more complete picture. Ultimately, responsible lending decisions are based on a combination of factors rather than any single metric in isolation.

The increasing availability of credit makes financial awareness more important than ever. I’d advise that borrowers should understand the different types of credit available and how lenders assess eligibility for secured and unsecured products. We've seen growing acceptance of secured credit solutions in recent years. For example, products such as gold loans or secured credit cards have become more mainstream because they offer consumers quicker access to credit while often reducing borrowing costs. Secured credit cards, in particular, are helping many individuals begin or strengthen their credit journeys. At the same time, borrowers should approach credit as part of a broader financial plan. Understanding repayment obligations, borrowing within one's means, and avoiding situations in which one debt is used solely to service another are all important aspects of healthy credit behaviour.

The good news is that consumers today have access to more information than ever before. There are numerous digital tools, educational resources, and financial platforms that can help individuals better understand credit products and compare available options. Credit bureaus also play an important role by enabling consumers to access their credit information and gain greater visibility into their credit profiles. At the same time, borrowers can seek guidance from financial professionals, trusted banking relationships, or independent advisors, depending on their preferences. It's also worth becoming familiar with newer frameworks such as the Account Aggregator ecosystem. Understanding how consent-based data sharing works, what information is shared, and the safeguards around data privacy can help consumers make more informed decisions and potentially access more tailored financial products. Consumers today are far more empowered than they were even a few years ago because information is more readily available and digital tools make product comparisons easier. The best approach is for borrowers to remain informed and ask the right questions. They should understand key elements such as interest rates, fees, repayment terms, foreclosure conditions, and any obligations attached to a loan before making a decision. Most importantly, borrowing should be aligned with one's repayment capacity and financial goals. Credit can be a powerful financial tool when used thoughtfully, but it works best as part of a broader financial planning approach rather than as a short-term solution to every need.

The most direct impact of a lower credit score is on access to credit. It may influence factors such as loan eligibility, pricing, credit limits, or the range of products available to a borrower. Beyond lending, some organisations—particularly in highly regulated sectors such as banking and financial services—may consider aspects of an individual's financial profile as part of broader background verification processes, subject to applicable policies and regulations. The weight given to such information can vary depending on the role and the institution.

More broadly, maintaining a healthy credit profile helps demonstrate responsible financial behaviour and can support smoother access to financial products when needed. Regularly reviewing one's credit information and addressing any issues proactively can therefore be a useful part of overall financial well-being.

Ananya is a journalist with over four years of experience, specialising in stock markets and personal finance. Currently working with the Mint Money team, she focuses on simplifying complex financial concepts to help readers make informed decisions about their money. Her work spans market trends, regulatory and policy developments, and in-depth analytical stories that decode shifts in India’s financial landscape. She has consistently covered key developments in the stock market, combining data-driven insights with on-ground reporting to provide clarity and context. <br><br>Before joining Mint, Ananya worked with Financial Express, NDTV Profit, and Informist, where she built a strong foundation in reporting, writing, and editing across fast-paced news environments. Her expertise lies in translating intricate financial and policy matters into accessible, reader-first narratives without compromising on depth or accuracy. Driven by a commitment to impactful and trustworthy journalism, Ananya believes credible financial information is essential for empowering individuals in an increasingly complex economic environment. A Delhiite now based in Mumbai, she brings a keen observational lens to both her reporting and everyday life. Outside of work, she enjoys reading, writing poetry, and people-watching.

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