"Personal Credit Evaluation, Now Focus on 'Scores' Instead of 'Grades'"

Bank Loan Counter Reference Image (Source=Yonhap News)

[Asia Economy Reporter Kim Hyo-jin] The credit scoring system, which evaluates individual credit based on 'scores' rather than 'grades,' has been implemented across all financial sectors since the beginning of the new year.

According to financial authorities on the 2nd, the credit grading system, which used a 1 to 10 grade scale until last year, was fully replaced by a credit scoring system displayed on a scale of 1 to 1000 points starting yesterday.

The financial authorities introduced this measure to alleviate the loan 'threshold effect' caused by the credit grading system.

The aim is to resolve situations where individuals close to a higher grade within a grade range suffer disadvantages in loan screening and other processes.

The credit card issuance criteria, which previously required a grade of 6 or higher, have also changed from the new year to a NICE (NICE Information Service) score of 680 or above or a Korea Credit Bureau (KCB) score of 576 or above.

The eligibility for support under low-income financial products such as 햇살론 (Haetsal Loan) has changed from grade 6 or below to 744 points or below (NICE) or 700 points or below (KCB).

The preferential credit limit criteria for mid-interest rate loans have changed from grade 4 or below to 859 points or below (NICE) or 820 points or below (KCB).

A financial authority official explained, "By introducing more detailed loan screening criteria, financial companies will no longer uniformly reject loans based on credit grades, improving financial accessibility for low-credit financial consumers."

The financial authorities also expect individuals to easily manage their credit by using credit scores, cumulative rankings, and customized credit management tips provided by personal credit evaluation companies (CB companies).

Going forward, the financial authorities plan to closely monitor the transition to the credit scoring system to ensure the system is stably established. They will support this by operating a rapid response team in cooperation with the Financial Supervisory Service, CB companies, and financial associations to promptly respond to and support any difficulties that arise.