Full Transition to Credit Rating and Scoring System... "Refinement of Credit Screening"

[Asia Economy Reporter Kim Hyo-jin] Starting next year, the personal credit evaluation system in the financial sector will change from the existing credit rating system composed of grades 1 to 10 to a credit scoring system displayed as scores from 1 to 1000.

On the 19th, the Financial Services Commission and the Financial Supervisory Service announced that they will issue a legislative notice to change the term 'credit rating' contained in 11 financial-related laws, including the Enforcement Decree of the Banking Act, Insurance Act, Specialized Credit Finance Act, and Savings Bank Act, to 'personal credit score.'

The credit scoring system will be implemented from January 1 of next year. For example, the classification of 'credit grade 6 or below' will change to 'bottom 20% of personal credit scores.'

The financial authorities expect that by utilizing more detailed personal credit scores in credit screening, diversified and sophisticated credit assessments will become possible for each financial company.

Additionally, it is anticipated that a foundation will be established for the smooth settlement of specialized personal CBs introduced following the amendment of the Three Data Laws.

Once the credit scoring system is implemented, credit rating agencies (CBs) will provide personal credit scores to financial companies and financial consumers instead of personal credit ratings.

Provided by the Financial Services Commission

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