CRED on day one: my first impressions

So, I happened to come across CRED this evening, the new venture by Kunal Shah. On first glance, it seems like something so trivial, but also something so long due!

I put down my first impressions as a thread on Twitter, as a software development and startup enthusiast. This is that thread, cleaned up a little for the blog.

The launch note

If you missed it, CRED launched with a note from the founder on why he started it. He exited FreeCharge in 2015 and spent a lot of time travelling in developed countries, where he noticed how much the system trusts its people. Back home, he felt trustworthy people keep paying for other people’s mistakes, so he wants something in India that rewards the creditworthy ones. He also calls out the 30+ hidden charges and interest on credit cards that hit you if you pay even a rupee less than your full bill.

Why do I even care about credit scores?

Ever since I was a kid, my dad, who is a businessman, has stressed (endlessly!) how important your credit score is if you ever want a housing loan, a VISA, to study abroad and so on.

But growing up, I never really saw it matter around me. Our Indian society still feels very cash heavy.

In the last few years though, probably since my adulthood, a few things made me a believer. I took a loan for my bike, and now I’m planning for a housing loan. So yeah, it matters.

Well, let’s talk about CRED here…

What CRED is going for

CRED feels like a simple yet visionary take on where our digital economy is heading. More and more people are signing up for credit cards and online banking, and making the shift to buying things online, be it e-commerce, food, housing or travel.

Onboarding

The onboarding is the smoothest I have ever experienced. Super clean, still descriptive about the details, and blazing fast. Good job with them APIs, Kunal!

You just punch in your first and last name along with your phone number and… VOILA! CRED pulls your credit score in a few seconds.

You need a score of 750+ to get in, and anyone below that goes on a waitlist. If tiers and offers based on credit score are the end game Kunal is looking at, that’s a smart way to set them up.

My score is way over 750 (thanks, Dad?), so I was immediately greeted with a screen listing all my credit cards. Again, super fast and impressive. Once you confirm a few cards, the app pulls your due amount and gives you the option to connect your Gmail for more info.

Cred coins

Your credit score gets converted into “cred coins”, which you can redeem for rewards. Yeah, the reward selection is limited, but pretty interesting. So the idea is that you pay your credit card bills on time and get the equivalent in cred coins to spend on rewards.

So, what’s the catch?

For starters, I can see how an app like this gets very granular access to your credit card data and spending. That’s enough to build a nice model of you: your age, income, spending, credit score, the categories you spend in, even the ratio of your spending across them.

cues Black Mirror music

That data could then be sold to banks, companies, or competitors of the merchants you already use, so they can target you back with personalised ads.

Sounds scary enough? Yeah, welcome to 2018.

Right now, neither Kunal nor CRED has said much about how they plan to use this data or what their privacy policy is. I expect that to get clearer in the coming days, once more people sign up and start asking questions.

My take?

I will give it a spin for a few days, because I like the idea of incentivising good paymasters who keep a check on their dues.

This is also something the Indian government has been thinking about for the last decade or so: some kind of model for income tax payers with a good credit score.

So, what’s your take on CRED? I would love to hear your views!