UPI transaction
Most people think that their credit score depends only on loans and credit cards. Whether the EMI is paid on time or not, whether the bill is paid or not. But in reality your everyday money habits also play an important role. Simply put, UPI transactions do not have any direct impact on your credit score, but somehow it affects your personal financial condition. We are telling you about this in detail.
Bank statement is your financial horoscope
When you apply for a loan, especially a personal or unsecured loan, banks don’t just look at your score. They also check your bank statements to understand how you handle money.
Impact of digital payment
Your daily UPI transactions like bill payment, subscription, sending money gradually form a pattern. If you have regular salary in your account, expenses are balanced and the balance does not go close to zero often, then it works in your favor. It seems that you are managing your money properly. But if there is a low balance in the account repeatedly, money keeps coming in and out and the expenditure is irregular, then the bank may suspect that you are under financial pressure.
What really matters is the flow of money
With digital payments it has now become easier to understand your financial habits. Banks also look at whether you pay bills on time, maintain some balance in the account, and how regular your expenses are. Nowadays some fintech companies and lenders are also using alternate data. That is, if you do not have any credit history, then they judge how trustworthy you are by looking at your transactions (like UPI).
an important thing
You cannot increase your score directly with UPI, but if you pay EMI or credit card bills on time, then your good credit history will definitely be created.
Where is the risk?
Spending has become very easy with UPI, due to which people forget to keep track of small payments. If this habit spoils your budget, then in future it may affect your ability to repay the loan. UPI itself does not change your credit score, but it can definitely change your money habits and nowadays banks take decisions keeping these habits in mind.
