[Ki Ha-young's Life Card] Credit Card Issuance Criteria: "Within Credit Grade 6"

Monthly Disposable Income of 500,000 KRW or More
Personal Credit Rating Within Grade 6

[Asia Economy Reporter Ki Ha-young]Is there anyone these days without at least one credit card? In modern society, anyone can have a card if they want. Credit cards have brought unparalleled convenience to daily life. Now, wherever you go, you can easily see people paying with credit cards or smartphones. As demand has increased, various cards with diverse benefits are being released almost daily. Accordingly, Asia Economy delivers various stories related to cards, which are inseparable from our consumer life, through the weekly 'Cards in Daily Life' corner, from introducing new cards to industry behind-the-scenes and guides for card beginners.

What are the criteria for issuing credit cards? The financial authorities operate the 'Model Guidelines on Credit Card Issuance and Credit Limit Assignment,' and card companies autonomously decide issuance within the scope that does not violate these guidelines.

According to Article 4 of the Model Guidelines on Credit Card Issuance, applicants must be of legal adult age as defined by civil law at the time of credit card issuance review to receive a credit card. Civil law defines adults as those aged 19 or older; however, if the applicant can prove employment at the time of application, those aged 18 or older can also be issued credit cards.

In fact, more than age, people are curious about credit ratings. To be issued a credit card, the applicant must have a monthly disposable income of at least 500,000 KRW and a personal credit rating within grade 6 at the time of the credit card issuance review. Here, disposable income refers to the applicant's annual income minus the annual debt principal and interest repayments.

Credit ratings are determined based on whether consumers have repaid financial transactions such as loans and credit cards on time, focusing on the history and type of financial transactions. Credit information companies like NICE Information Service evaluate individual customers' creditworthiness and provide this information to financial institutions. Credit ratings range from grade 1 to 10, with grades 7 to 10 classified as low credit, making bank loans impossible.

Until a few years ago, credit ratings could only be checked for free three times a year on credit information company websites. However, recently, fintech companies such as Toss, BankSalad, and KakaoBank have provided functions to check credit ratings for free anytime, making it easy for anyone to check their credit rating. Checking your credit rating does not lower it, and the number of credit cards held is unrelated to the credit rating.

Also, to be issued a credit card, applicants must meet the card companies' credit card application scoring criteria (ASS). If the applicant is using cash services, card loans, revolving payments, or other card loans on three or more credit cards from different issuers, has overdue debts with financial institutions, or if payment ability is difficult to recognize based on information provided by the Korea Financial Telecommunications & Clearings Institute, they will not meet the ASS. Additionally, card companies comprehensively consider income, job stability, pension receipt, asset status and holdings, and multiple loan debts when reviewing card issuance.

The financial authorities have decided to fully switch from a credit rating system to a credit scoring system for all financial sectors starting January 1 next year. Personal credit, which was previously divided into grades 1 to 10, will be subdivided into scores from 1 to 1000. Attention is focused on whether consumers such as housewives and young adults, who previously received low credit ratings due to insufficient financial transaction history, will benefit. Above all, using credit cards that match one's repayment ability to build a sound credit transaction history is more important, isn't it?