"Expedited Credit Recovery Support for 3.7 Million Low-Income Individuals and Small Business Owners Begins Today"

Credit Recovery for Delinquencies Under 50 Million Won
Full Repayment by Year-End Restores Credit Status

The government announced that, starting from September 29, expedited credit recovery support will be implemented for up to 3.7 million low-income individuals and small business owners.

According to the Financial Services Commission, this credit recovery support measure targets those who experienced delinquencies of 50 million won or less between January 2020 and August of this year, provided that the entire overdue amount is repaid by the end of this year.

During the eligible period, the number of individuals with minor delinquencies was approximately 2,955,000 (based on NICE data), and the number of individual business owners was about 748,000 (based on Korea Credit Data). As of the end of last month, about 2,449,000 individuals (83%) and 128,000 individual business owners (17%) had fully repaid their overdue amounts. Notably, this round of credit recovery support also includes borrowers who were not eligible for previous measures in 2021 and 2024-773,000 individuals and 399,000 individual business owners.

Low-income individuals and small business owners can check their eligibility for credit recovery support directly on the websites of credit rating agencies. If eligible, their credit scores will be automatically increased without the need for a separate application. Therefore, the 2,577,000 people who have already fully repaid their overdue amounts will receive credit recovery support immediately from this day. For the remaining 1,126,000 individuals who have not yet fully repaid their overdue amounts, they can also receive credit recovery support without a separate application if they complete repayment by the end of this year.

An analysis of the credit recovery support effects for individuals and individual business owners who completed full repayment by the end of August showed that individuals’ credit scores increased by an average of 40 points (from 616 to 656). In particular, the support effect was significant among young people, with those in their 20s seeing an average increase of 50 points and those in their 30s seeing an average increase of 42 points. As a result of this measure, about 290,000 people are expected to become newly eligible for credit cards, and approximately 230,000 are projected to exceed the average credit score required for new bank loans.

The credit scores of individual business owners increased by an average of 31 points (from 696 to 727), making it possible for about 20,000 individual business owners to qualify for loans from primary financial institutions. Additionally, the Financial Services Commission explained that the benefits of this measure were particularly pronounced in sectors vital to everyday life, such as accommodation, food and beverage, and wholesale and retail businesses.