"Delinquent borrowers with debts of 50 million won or less can have their delinquency history deleted if repaid in full by year-end"
Boosting credit scores for diligent repayers to support rapid recovery
The Lee Jaemyung administration will delete delinquency history records for individuals who have diligently repaid their overdue debts in full after the COVID-19 crisis, in order to help them quickly recover financially.
"Delinquent borrowers with debts of 50 million won or less will have their delinquency history deleted if repaid in full by year-end"
The Financial Services Commission announced on August 11 that it will delete delinquency history records for individuals and sole proprietors who incurred delinquencies of 50 million won or less (on personal or business loans) between January 2020 and August 2025, provided they repay the full amount by the end of this year.
This measure is intended to support credit recovery for ordinary citizens and small business owners who, due to unavoidable circumstances such as the COVID-19 pandemic and high interest rates leading to economic downturn, fell behind on debt repayments but have since repaid in full, enabling them to swiftly return to normal economic activity.
The Financial Services Commission explained that, of the approximately 3.24 million individuals and sole proprietors who incurred small-scale delinquencies between January 1, 2020, and the end of June 2025, about 2.72 million have already repaid in full and are thus eligible for credit recovery support. The remaining approximately 520,000 will also be eligible if they repay the full delinquent amount by year-end. The Commission noted that this is the largest scale of credit recovery support for small-scale delinquent borrowers ever provided by the government.
For those eligible for credit recovery support, their delinquency history will be restricted from being shared among financial institutions and will not be reflected in credit evaluations by credit bureaus (CB).
Previously, even after full repayment of overdue debts, delinquency history remained on record with the Korea Credit Information Services for up to one year, and credit bureaus could retain the delinquency record for up to five years.
Boosting credit scores for diligent repayers to support rapid recovery
The government previously implemented two rounds of credit amnesty in 2021 and 2024, deleting delinquency history for those who fully repaid small-scale overdue debts incurred due to the COVID-19 crisis.
At that time, the support was limited to borrowers with delinquencies of 20 million won or less, but the threshold has now been raised to 50 million won. A Financial Services Commission official explained, "We raised the amount in consideration of the current emergency situation, which is compounded by the prolonged impact of COVID-19 and persistent high interest rates causing continued economic downturn, compared to the circumstances during previous credit recovery support measures."
The Commission expects that this measure will significantly improve the credit scores of those eligible for credit recovery. Last year, individuals who benefited from the credit recovery policy saw their average credit score rise by 31 points, while sole proprietors saw an average increase of 101 points.
The 50 million won delinquency threshold is based on the amount registered as delinquent by the Korea Credit Information Services or credit bureaus. After determining eligibility, a system will be established to allow individuals to check their eligibility through credit bureaus, with access available from September 30.
Eligible individuals will have their delinquency history automatically deleted without any separate application process. For those who have already repaid in full, the deletion will occur collectively on September 30, while for those who repay after that date, the record will be deleted the day after repayment.
A Financial Services Commission official emphasized, "With this measure, those who have diligently completed debt repayment are expected to avoid disadvantages in interest rates, credit limits, and new loans due to improved credit scores."
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