Everyone feels the need to manage credit ratings, but they don’t know in detail how to maintain the current level and how to increase credit ratings. Conversely, it also raises the question of why your credit rating is lower than others.
The credit rating is determined by the Korea Credit Information Service, and the criteria for determining the credit rating are based on the credit score table based on a comprehensive judgment such as financial transactions, overdue, and credit card usage history. 신용등급 점수
The higher the credit rating, the easier it is to obtain approval compared to those with a low credit rating when obtaining a loan from a bank, the first financial institution, and also affects the loan interest rate. 좋은뉴스
Conversely, if your credit rating drops to 7, 8, 9, or 10, you have no choice but to use the second and third financial institutions, such as capital, private finance, and P2P loans, rather than the first financial sector, the bank. As a result, it becomes difficult to break out of the vicious cycle of repeating patterns in which credit scores go down rather than go up.
First, I need to check what my credit rating is. Representative credit rating companies in Korea include NICE Jikimi of NICE Rating Information and All Credit, a free nationwide credit rating inquiry.
The question is, why is there a difference between the score checked on All Credit and the credit score checked on NICE Keeper? no see.
In Nice Jikimi, it comes out as 1st grade, but in All Credit, it sometimes comes out as 2nd grade.
1. All Credit Credit Score VS NICE Jikimi Credit Score
Rating
nice
all credits
One
900-1000 points
942 points – 1000 points
2
870-899 points
891-941 points
3
840-869 points
832-890 points
4
805-839 points
768-831 points
5
750-804 points
698-767 points
6
665-749 points
630-697 points
7
600-664 points
530-629 points
8
515-599 points
454-529 points
9
445-514 points
335-453 points
10
0-444 points
0-334 points
If you check the company credit rating by rating above, you can see that the rating standards for each score are different.
In Nice Jikimi, my credit rating is 900 or higher, but all credits must be 942 points or higher to be evaluated as 1st grade, so even if the same 900 points, Nice is 1st grade and Allcredit is 2nd grade.
Credit rating free inquiry site
NICE Evaluation Information Nice Jikimi (https://www.credit.co.kr)
Free National Credit Rating Inquiry All Credit (https://www.allcredit.co.kr)
Credit4u personal credit rating inquiry (www.credit4u.or.kr)
2. Credit Rating
The Financial Services Commission announced plans to improve the credit evaluation system. Starting from the second half of 2018, it was announced that it would be converted from a credit rating system to a credit score system on a trial basis, starting with large financial institutions, and from 2019, it was announced that it would be expanded to full-time businesses. Accordingly, in the future, you will have to pay more attention to managing your credit rating scorecard rather than your credit rating.
Classification of Credit Ratings and Interpretation of Meaning
Rating
division
meaning
1~2
best
This means that the possibility of insolvency is very low as the credit transaction has a long history and several excellent credit transaction records.
3-4
rainfall
Although there is no active performance in margin trading, if good transactions are consistently maintained, it is possible to enter a higher grade and the possibility of insolvency is judged to be low.
5-6
Normal
Customers who transact with the financial sector with relatively high interest rates, have experience in short-term delinquency, and the possibility of insolvency is judged to be normal.
7-8
caution
Customers with a long history of transactions with the financial sector with relatively high interest rates are judged to be highly likely to become insolvent as they have a relatively large amount of experience in short-term delinquencies.
9-10
danger
It is judged that the possibility of insolvency is very high because it already has a history of overdue or has a very serious overdue experience.
3. Credit score and how to raise it
You need to raise your credit score to raise your credit score. Find out how to increase your score.
1. Sometimes there are people who think, “I don’t have a loan, so my credit rating must be high.” However, in the financial sector, if there is no transaction history, there is no basis for judgment on credit transactions, which creates a situation in which the credit rating cannot be improved. Therefore, it is necessary to have a financial transaction history within an appropriate range to check the details and increase the credit rating.
2. Create a main bank – There must be a main bank that can be used steadily for credit management purposes. Those who generate income can build a transaction history through salary transfer, etc., and if they continue to accumulate details such as utility bills, card payments, and communication expenses, they are doing the basics of credit management.
3. Periodically check my credit score – I need to check what level of credit I currently have. It is also a good habit to check your credit rating 3-4 times a year for free, as there is no disadvantage to your credit rating even if you inquire your credit rating at a credit inquiry company.
4. Beware of overdue occurrences – There are various utility bills, communication charges, and national health insurance charges that are easy to miss. It is necessary to set automatic transfer for the contents that need to be paid every month and prevent overdue. You may receive 5 to 17 additional points if you submit data issued by organizations such as telecommunication bills and health insurance corporations to All Credit.
5. Indiscriminate credit card loans without repayment capacity, overdue credit card payments, etc. are also bad financial transactions and cause a decrease in credit score, so caution is required.
6. In case of using products such as loan business with high interest rate, it is necessary to change the loan to the government-supported low-income loan product (Sunshine Loan, Smile Microcredit, New Hope Spore Exchange Loan), etc., and if you are using the low-income loan, you must be sincere for at least 1 year. In case of repayment or more than 50% repayment, additional points of 5 to 13 are given, so please refer to it.
Credit score needs steady management because it does not go up in a short time even if the situation has been improved. In addition, please note that you can maintain a high credit score by periodically checking your credit score and making efforts to fill in the gaps.
So far, we have learned about credit rating scorecards, free credit rating inquiry, and how to raise your credit rating.