Q&A on Credit Recovery Support Measures Related to COVID-19
[Asia Economy Reporter Park Sun-mi] If individuals and sole proprietors who have overdue debts of 20 million KRW or less during the COVID-19 period from January last year to the end of August this year fully repay them by the end of this year, their overdue history information will not be shared with financial institutions nor reflected in credit evaluations, thus avoiding disadvantages. Below are the main Q&A contents related to the COVID-19 credit recovery support plan.
Q. Why was the overdue amount for credit recovery support set at 20 million KRW or less?
A. The overdue amount criterion was 10 million KRW during the 2000 credit recovery support, and it was set to 20 million KRW considering economic growth since then.
Q. Is the 20 million KRW criterion based on the loan principal or the overdue amount?
A. It is based on the amount that financial companies register as overdue with the Korea Credit Information Services (KCIS) or Credit Bureau (CB).
Q. Why was the overdue occurrence period for credit recovery support set from January 1, 2020, to August 31, 2021?
A. Considering the recent COVID-19 spread trends and the ongoing social distancing level upgrades causing difficulties in the low-income economy, the period was set until the end of August.
Q. Why was the overdue repayment period for credit recovery support set until December 31, 2021?
A. Considering the prolonged COVID-19 situation and to enhance support effectiveness, overdue repayments made within about four months from the announcement date are included.
Q. Even if this plan is implemented, can financial companies still use other companies' overdue history information previously checked through KCIS or CB?
A. Most financial sectors handling credit, such as banks, credit card companies, and savings banks, check and use the most recent credit information from KCIS or CB during existing credit management and new credit screening. However, overdue histories subject to this plan will not be checked or used after implementation.
Q. Can financial consumers verify if they are eligible?
A. After eligibility is confirmed, a procedure will be prepared to allow verification through CB companies.
Q. Are loans to sole proprietors also subject to this credit recovery support?
A. Both individual debtors and sole proprietors are eligible for credit recovery support.
Q. What remedies exist if full repayment was made but due to misregistration by financial companies, the individual is not recognized as eligible for credit recovery support?
A. Whether full repayment was made can be confirmed by the financial company that executed and managed the loan. If an individual has fully repaid but is not recognized as eligible, they can request correction through the financial company to confirm that the overdue amount was fully repaid.
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