1~10 grades from January → 1~1,000 points
Expectations to resolve financial disadvantages such as loans
[Corporate Daily Reporter Ahn Seong-su]Mr. Jang-gyu Jo (41, Sannam-dong, Seowon-gu, Cheongju-si), a self-employed businessman who was hit by sales due to Corona 19, visited a bank to get a loan, but was rejected due to his credit score. Mr. Cho was the top 6 rank and there wasn’t much difference in his scores from the 5th rank, but he suffered disadvantages according to the loan conditions divided by the rank system. Mr. Cho said, “If I had raised the credit rating a little, there would have been no such disadvantages, but it is very regrettable. Now I have no choice but to recognize the three financial sectors.”
From January next year, the personal credit rating standard will be changed from the rating system to the score system, and credit ratings are expected to be more subdivided, thereby eliminating the disadvantages in the loan review.
According to the Financial Services Commission on the 28th, from January 1 of next year, the credit rating system was completely converted to a credit score system, and the credit rating, which was applied as a 1-10 rating, will be subdivided into 1 to 1,000 points.
The change in credit rating standards is expected to increase access to finance for financial consumers with low credit ratings.
For example, in the case of the existing credit rating system, despite the fact that the difference in scores between the top 6 ranks and the bottom 5 ranks is not large, it has been hit by the rating threshold and suffered a disadvantage in the loan review.
In addition, in the case of a personal credit rating company (CB), it is only necessary to provide individual credit rating scores to financial consumers and financial companies without calculating a separate credit rating. Financial consumers can easily manage their creditworthiness by using the credit score, cumulative ranking, and customized credit management tips provided by CB.
Credit rating standards under laws and regulations, such as credit card issuance and support for low-income financial products such as Sunshine Loan, and preferential credit limit for mid-interest loans, will also be changed to the personal credit score.
In the case of card issuance criteria, it will change from the existing 6th grade or higher to 680 or higher for Nice Rating Information or 576 or higher for the Korea Credit Bureau (KCB) next year.
The Financial Services Commission has been promoting the conversion of the credit score system in stages.
From January last year, it was applied to the five major commercial banks with high credit risk assessment capabilities, and from next year, it will be applied to all financial sectors such as other banks, insurance, and credit companies.
An official from the Financial Services Commission said, “We plan to closely monitor the status of the credit scoring system and support the system to settle in a stable manner.” Said.
Reporter Seongsoo Ahn [email protected]
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