3.3 Million Ordinary Citizens and Small Business Owners Receive 'Credit Amnesty'... Improving Financial Accessibility

Financial Authorities Hold Event to Implement Rapid Credit Recovery Support for Ordinary Citizens and Small Business Owners

Starting today (the 12th), a 'credit pardon' will be implemented for approximately 3.3 million low-income and small business owners who have diligently repaid small overdue debts (2.98 million individuals and 310,000 sole proprietors). About 2.64 million individuals who have already fully repaid their overdue amounts are expected to see an average credit score increase of 37 points, while approximately 175,000 sole proprietors will see an average increase of about 102 points, significantly improving their access to financial services.

Kim Ju-hyun, Chairman of the Financial Services Commission, attended the 'Rapid Credit Recovery Support for Low-Income and Small Business Owners' event held this morning at the Bankers' Hall in Jung-gu, Seoul, and stated, "With this measure, credit scores will automatically rise, enabling many low-income and small business owners to obtain new loans or credit cards, allowing them to return to normal economic activities."

Financial Services Commission Chairman Kim Joo-hyun is attending the Emergency Economic Ministers' Meeting held at the Government Seoul Office in Jongno-gu, Seoul on the 26th. Photo by Jo Yong-jun jun21@

The credit pardon applies to borrowers who incurred small overdue debts of 20 million KRW or less between September 1, 2021, and January 31 of this year, and who have fully repaid the overdue amounts by May 31. During the target period, about 2.98 million individuals (based on NICE Information Service data) and up to 310,000 sole proprietors (based on Korea Credit Data) incurred small overdue debts. As of the end of February, approximately 2.64 million individuals and about 175,000 sole proprietors have fully repaid their debts.

Low-income and small business owners who have fully repaid their overdue amounts can directly check their eligibility for the credit pardon on the websites of individual personal credit evaluation companies and sole proprietor credit evaluation companies. If eligible, credit scores will automatically increase without any separate application process.

Accordingly, as of the end of February, about 2.64 million individuals and 175,000 sole proprietors who have fully repaid their overdue amounts will receive immediate credit recovery support starting today. The remaining approximately 340,000 individuals and 135,000 sole proprietors will also receive credit recovery support without a separate application if they fully repay their overdue amounts by May 31.

Additionally, starting today, the registration period for the information indicating that a borrower has undergone debt adjustment?which previously caused disadvantages?will be shortened from two years to one year. Since using debt adjustment services from the Credit Recovery Committee or the New Start Fund had been registered with the Credit Information Agency and acted as a constraint in financial transactions, this reduction aims to minimize inconvenience.

At the event, each credit evaluation company introduced cases of credit score increases resulting from the credit pardon. NICE Information Service explained that as of the end of February, the credit scores of 2.64 million individuals who fully repaid their overdue debts increased by an average of 37 points to 696 points. The increase was higher than average for those under their 20s, with a 47-point rise, and for those in their 30s, with a 39-point rise. Notably, about 150,000 people are expected to be issued credit cards, and about 260,000 will exceed the average credit score for new bank loans due to this credit pardon.

Korea Credit Data announced that the credit scores of approximately 175,000 sole proprietors are expected to increase by an average of 102 points to 725 points. Consequently, about 79,000 sole proprietors will become eligible for loans from first-tier financial institutions (banks). Additionally, the Credit Information Center analyzed that the shortening of the debt adjustment information registration period will lead to the early removal of debt adjustment information for about 50,000 people, resolving their disadvantages.

Chairman Kim said, "Despite the difficult economic situation caused by high interest rates and inflation, I am deeply impressed by the strong will to recover shown by many low-income and small business owners who have fully repaid their overdue amounts." He emphasized, "We will promptly implement additional credit recovery support measures, such as restricting the sharing of disadvantageous information (such as rehabilitation and bankruptcy information) for diligent management re-entrepreneurs, and awarding credit score bonuses to young people who maintain Youth Leap Accounts for a long term."

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