Retailers Beware

At a time when interest rate offered by banks on Fixed Deposits stands at 3.5% - 5.5%, Media states that there is an offer to Earn up to 9% by lending to peers in CRED.

This is a sure fire recipe for scam / theft in future. Now what CRED claims:

 CRED is a members-only club that rewards individuals for their timely credit card bill payments by providing them with exclusive offers and access to premium experiences. It is a platform that allows credit card users to manage multiple cards along with an analysis of their credit score. Members with a high Experian or CRIF score are eligible for exclusive rewards upon payment of their credit card bills through the app. Among many of the features in the app are CRED's credit card spend tracking and management feature which provided the user with analysis of spend tracking and efficiency of usage of the card.

Now what is a High Experian or CRIF Score?

CRED members have a credit score of 750 or higher, making them the most trustworthy audience to provide financial services. On CRED, a user has to have a credit score of 750 or higher to join the app.

So who are  rating above 750.

Very Good (ranging between 750-850)- this score indicates that the customer has a very good history of financial management and their financial history demonstrates sharp financial acumen regarding the utilization of credit. Extending credit to such a customer is very low risk to the lender as the customer has a proven record of creditworthiness.

Excellent (850)- this score is the highest allotted by Experian and indicates a customer with an almost perfect credit record. All lines of credit extended to a customer with such a score are very low risk due to their proven financial management.

The most important question is why a person with a very good history / a very low risk customers need credit from peers in CRED?

Initially the PE investors joined and now retailers are invited to the CRED Party. 

Hope Reserve Bank of India is observing what the FINTECH's are offering.

Retailers beware!