The fear of losing control of your finances is one of the biggest concerns of anyone who takes care of their finances or who is aware of the need to manage their resources well.
This concern was one of the reasons indicated by 34% of consumers with little credit activity worldwide when thinking about credit and not asking for it. The data is contained in a study published by the global information company TransUnion, which highlights the desire of consumers to avoid indebtedness.
The recently published research indicates that 29% of consumers with little credit activity would be willing to expand the use of their credit if they received information about the availability and advantages, while 26% if they could make lower payments and 21% if they were more clear about the total cost of the credit, including commissions and interest.
The study reveals that just over half of consumers without credit products (53%) and 47% of consumers with little credit activity declared that the reason they did not take more credit, or no credit in the case of consumers without credit productswas not wanting to get into debt.
This means that the majority of consumers, particularly within the group of consumers with little credit activity, are looking to obtain greater access to credit and take advantage of credit for their financial needs.
The comprehensive study "Expanding Access to Credit: A Deeper Perspective on Consumers Without Credit Products and With Low Credit Activity”, included an analysis of the credit behavior of consumers in Canada, Colombia, the United States, Hong Kong, India and South Africa, as well as a global online survey of more than 11,100 consumers in the Dominican Republic, Brazil, Canada, Colombia, the United States and the Philippines.
Looking for new credit products
The survey results indicate that, despite the lack of credit experience of consumers without credit products and with little credit activity, they understand the benefits and risks of credit and want to maintain control of their finances.
Around the world, respondents cited planning to apply for credits in 2022 to varying degrees.In the Dominican Republic, 52% of consumers without credit products plan to request a loan,and 58% of consumers with little credit activity.
This considerable percentage of both groups of consumers who intend to apply for credit indicates that there is a real need and an interest in credit. The study states that finding a way to meet the needs of this large population of consumers, while managing risk prudently, represents an important growth opportunity for entities.
Pluscredit education and better credit offers
The survey results also indicated that 45% of credit-poor consumers in the Dominican Republic would expand their use of credit if they had a significant life event in the future – such as getting married or having a child – which would create a greater need. of credit.
The most common reason, both for consumers without credit products and consumers with little credit activity in the Dominican Republic, for rejecting credit offers received was that they no longer needed the credit, which differs from other countries, in which a very high interest rate appears as the most common reason.
A very high interest rate was the second most common reason for rejecting a credit offer for consumers without credit products and those with little credit activity in the Dominican Republic, at 24% and 19% of respondents, respectively.
10% of consumers with little credit activity in the country cited a long approval process as the factor in rejecting the credit offer,and 11% indicated the fact that they were offered an insufficient amount as a factor in rejecting the credit offer.
Additionally, 10% said they turned down credit offers because they received a better offer elsewhere.The survey also showed that the majority of consumers with little credit activity (55%) in the Dominican Republic had acquired alternative sources of financing.outside of traditional credit products to meet their financial needs in the past year, with loans from family and friends being the most common source.