COVID-19 'Credit Amnesty' Implemented... 2.06 Million Individual Vehicle Owners Receive Benefits Limiting Delinquency Records

Shinbokwi to Implement Credit Recovery Support Measures on 12th
Targeting Delinquents from 2020.01.01 to 2021.08.31
Restriction on Sharing Delinquency Records if Repaid by Year-End
Benefits for 2.06 Million Individuals and 160,000 Sole Proprietors

Example of Credit Recovery Support Inquiry Website Operation. Photo by Credit Recovery Committee

[Asia Economy Reporter Song Seung-seop] A ‘credit forgiveness’ policy targeting individuals and sole proprietors struggling due to COVID-19 will be implemented. This measure comes three months after President Moon Jae-in personally instructed the preparation of support plans for credit recovery.

On the 12th, the Credit Recovery Committee announced that it will implement credit recovery support measures for individuals and sole proprietors facing difficulties due to COVID-19 across all financial sectors. According to the plan, if overdue debts incurred during the COVID-19 period have been fully repaid faithfully, the borrower’s overdue history information cannot be shared or utilized.

The COVID-19 period is defined as from January last year to August 31 of this year. Overdue debts incurred during this period must be fully repaid by December 31 to be resolved. The amount must be small, corresponding to overdue and subrogation/payment guarantee information of 20 million KRW or less.

The overdue history information of eligible borrowers will be restricted from being shared by financial institutions. It will also not be reflected in the credit evaluations of individuals and sole proprietors by credit bureaus (CBs). Without a separate application from the support recipients, CBs and the Credit Information Agency will take action if the criteria are met.

According to the Credit Recovery Committee, about 2.06 million individual borrowers and 163,000 sole proprietors are expected to benefit from the credit forgiveness. Additionally, the average personal credit score is expected to rise from 672 to 704 points, and the average credit rating for sole proprietors is expected to improve from grade 7.9 to 7.3, an increase of 0.6 grades.

A Credit Recovery Committee official said, “We expect that the financial accessibility of eligible recipients, such as card issuance and new loans, will also improve,” and predicted, “Considering that the repayment period for eligible overdue debts is the end of 2021, the number of beneficiaries will increase.”

From today, financial consumers can check detailed eligibility requirements and support status for credit recovery support at each CB and the Credit Information Agency. However, the types and collection of overdue information, credit score calculations, and operations may vary by institution.

This content was produced with the assistance of AI translation services.