Bengaluru-based fintech startup, GoodScore, has raised $13 million in Series A funding to expand its AI credit advisory and marketplace in tier II and tier III cities, aiming to scale its services and improve credit health by reaching more users. Alongside this move, fintech ventures now see new momentum in India’s growing credit health segment.

In many parts of India, especially in tier II & III cities, people have little understanding of their credit. They don’t always track credit scores, don’t know what affects them, or how to improve them.

This leads to overborrowing, missed payments, and defaults. Several sources point out that defaults and delinquency are rising in these smaller markets because many borrowers are first-time borrowers with limited credit history.

Additionally, traditional underwriting often relies on formal credit bureau data or income proof. But many potential borrowers (especially in smaller cities or informal sectors) lack such history or documentation. As a result, many lenders are unable or unwilling to extend credit, or do so at high risk.

However, GoodScore aggregates multiple data streams (bank transactions, spending behavior, bureau data) to build a fuller picture of creditworthiness. This helps both users (they see the bigger picture) and lenders (they get more confidence in borrowers with non-traditional profiles).

Sanchit Bansal, Founder, GoodScore, said, “We started with the belief that managing credit shouldn’t be as stressful or confusing as it is today. We wish to change how Indians interact with credit by bringing every user’s credit life into one view, helping them understand their loans, track payments and make informed, data-driven financial decisions. Our goal is to make responsible credit management a mainstream habit for millions of Indians.”

From Seed to Scale: GoodScore’s Leap Forward

After its establishment in 2023 by entrepreneur Sanchit Bansal, GoodScore built a reputation in fintech circles for its AI credit advisory platform. The Series A capital infusion, led by Peak XV Partners and backed by Stellaris Venture Partners and Saison Capital, now fuels its ambitions.

It will deepen AI-driven credit insights, grow its engineering and product teams, and strengthen its credit marketplace. The company also plans to extend its reach into tier II and tier III markets.

Mayank Jain, Principal, Stellaris Venture Partners, said, “GoodScore’s strong traction today reflects the rising importance of credit health in India, with COVID serving as a key catalyst in this shift. As a partner since 2023, Stellaris has been privileged to support GoodScore’s journey, and we look forward to the continued impact they will create.”

GoodScore’s core proposition lies in AI credit advisory, as it merges bureau data, bank transaction history, and spending analytics to offer users a unified credit health dashboard. In parallel, its credit marketplace connects borrowers and lenders, enabling users to access tailored credit offers. By leveraging both advisory and marketplace features, GoodScore creates a synergistic fintech model that differentiates it from pure credit score providers.

By FY 24, GoodScore began monetizing via a subscription model priced at INR 99 monthly. Its operating revenue jumped to INR 2.5 crore from near zero, though losses also ballooned to INR 7 crore (a 7.7× increase).

Still, the startup reports over five million active users, and partners with prominent institutions including HDFC Bank, Axis Bank, Kotak Mahindra Bank, IndusInd Bank, KreditBee, and Tata Capital. These alliances help widen its credit health solutions and facilitate credit access for users.

Targeting Smaller Cities, Bigger Impact

GoodScore targets tier II and tier III cities, believing fintech penetration outside metros holds huge promise. The startup will deploy new capital to localize product offerings and scale its credit marketplace in lesser-served regions. It expects that tier II and tier III user acquisition will drive the next wave of growth.

India’s credit ecosystem faces a knowledge gap: many consumers lack real-time insight into their credit health or access to favorable credit. GoodScore’s approach, integrating AI credit advisory with marketplace infrastructure, is novel and globally relevant. As credit health becomes central in emerging markets, GoodScore could serve as a template for fintechs working at the intersection of data, AI, and inclusive lending.

Ishaan Mittal, Managing Director, Peak XV, “India has an active borrower base of over 250 million consumers. GoodScore is on a mission to empower them by putting them in charge of their credit health. They can track scores, take actionable steps to resolve bureau disputes and manage repayments seamlessly. GoodScore is not just helping users improve scores; it is unlocking credit access and fueling true financial inclusion in India.”

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