Mr. Lee, 46, an office worker, was surprised when he looked up his credit score at Kakao Bank. This is because it has gone down 38 points to 932 points from 970 points a few days ago. The percentage also fell from the top 3% to the top 28%. After hearing the news that the credit rating will change from the rating system to the score system from next year, I have been inquiring it at Kakao Bank. I didn’t get a new loan, and I never had to pay my credit card or telecom fees. It was simply the result of a different evaluation system. Lee said, “I have been making every effort to manage my credit rating, but it is not convincing that my credit score will go down just by changing from the rating system to the score system.”
According to the financial industry on the 24th, the private credit rating agency Korea Credit Bureau (KCB, All Credit) will introduce a credit score system on the 29th of this month. Currently, it is limitedly provided to five commercial banks such as Kookmin, Shinhan, Woori, Hana, and Nonghyup, but the scope of the provision will be greatly expanded to the rest of the financial sector, including the financial investment industry, insurance industry, and the second financial sector.
The introduction of the scoring system is expected to lower the threshold between grades. Under the rating system, the rating was divided by a difference of 1 point in the credit score, so 630 points were classified as 6 grades, but 629 points were classified as 7 grades. Since financial institutions reflect ratings, not scores, loan interest and loan review results were inevitably changed by only one point difference.
An official from the financial authorities said, “With the introduction of the score system, more than 2.4 million financial consumers will be able to reduce interest rates by 1 percentage point per year.” I’m looking forward to it.”
Credit rating agencies have also advanced the rating system. We evaluated with credit information such as overdue amount, multiple debts, overdue period, and number of overdue payments, but decided to use non-financial items such as telecom fees and health insurance. The history of use of loan business rights, which was excluded from the evaluation factor in the past, was also decided to be reflected in the score calculation.
The same goes for a negative bankbook. Under the previous rating system, additional points were applied when the debt level was low compared to the negative bankbook contract amount, but the additional points themselves will disappear from now on. As a result, the credit score of many users who had opened a negative bankbook and did not actually use it was lowered. Previously, Mr. Lee belongs to this case. It is explained that the existing management method in which the credit score increases when the negative bankbook is newly opened is no longer valid under the score system.
An official in the financial industry said, “The effect of having a negative bank account on the score is insignificant.” Credit scores reflecting the score system can be checked on mobile apps such as Kakao Bank and Toss as of the 15th of this month.