From next year, the credit rating system will disappear and the credit score system will be fully introduced. The individual credit rating system, grouped by section with 1-10 grades, is subdivided into 1-1000 points. The card issuance standard will also change from a credit rating of 6 or higher to a credit score of 680 or higher (Nice credit rating standard).
From next year, the standard for issuing credit cards will change from credit rating to credit score. If you have a credit score of 680 or higher based on the Nice Credit Rating, you can get a credit card. Previously, credit rating 6 or higher was required to issue a card. Shutterstock
The Financial Services Commission announced on the 27th that starting January 1 of next year, individual credit rating companies will not calculate credit ratings, but only calculate personal credit scores and provide them to financial consumers and financial companies.
priority The personal credit rating disappears, and the credit score subdivided into units of 1 point from the 1000 point standard is used. Individual credit rating companies (CBs) do not calculate credit ratings, but only calculate individual credit scores and provide them to financial consumers and financial companies. The credit score system is applied to the entire financial sector, including banks, insurance companies, financial investment companies, and credit card companies. However, corporate (individual business) credit ratings and financial company internal credit ratings are used the same as before.
The threshold effect decreases with the conversion of the credit score system. In the past, loans were divided according to the grade, but in the future, loans are decided based on the number of credit points per point. Financial Committee
Loans divided by grade, broken down by score
The so-called’threshold effect’ is alleviated when the individual credit rating is changed to a point system. Currently, most financial companies use their credit ratings to screen loans to provide loans. Because of this, even a slight difference in creditworthiness has created a threshold effect on whether or not to lend. For example, there is no significant difference in credit ratings for those with higher grade 7 ratings and those with lower grade 6 ratings, but suffered disadvantages from issuing credit cards and loans. However, if the credit rating is subdivided into 1000 points, these penalties will decrease. The financial authorities said “As financial companies introduce detailed loan screening criteria, loans are not rejected uniformly according to credit ratings, and financial accessibility for low-credit financial consumers is improved.It has the effect of becoming,” he said.
Changes in credit card issuance standards, etc. following the conversion of the credit score system. Financial Committee
Card issue level 6 or higher. With a credit score of 680 or higher
Credit card issuance standards have also been reorganized as the system has changed. Credit card issuance criteria are changed from current grade 6 or higher to 680 points or higher based on Nice Evaluation Information (Nice) credit score or 576 points or higher based on Korea Credit Bureau (KCB).. The target of support for low-income financial products such as Sunshine Loan will be changed from grade 6 or lower to 744 points or lower for Nice or 700 points or lower for KBC. The criterion for preferential treatment of the credit limit for medium-interest loans is NICE 859 points or less or KCB 820 points or less for grade 4 or less.
This standard score is recalculated on April 1 every year by reflecting the distribution of the previous year’s credit score. For example, in the case of card issuance points, it is the result of calculating the section with the top 93% of the personal credit score or 0.65% of the possibility of long-term overdue.
The financial authorities decided to support financial companies and financial consumers following the switch to the score system, such as operating a quick response team in cooperation with the Financial Supervisory Service, CB companies, and associations.
Reporter Ahn Hyo-seong [email protected]