Credit Rating Scorecard / How to Raise Your Credit Score
Credit score is important for convenient financial transactions.
The higher the credit score, the lower the interest rate and the higher the loan amount. 신용등급 점수
A high credit rating is considered to have a low default rate, so it plays a very important role in financial transactions.
Until a while ago, credit rating was operated, but now it has changed to credit scoring system. 좋은뉴스
What is a credit score system, what is it good for us, and tips to improve your credit score.
▣ What is the credit score system?
From January 2021, it is a system that allows you to use financial products according to the credit rating by modifying the credit rating for the existing personal credit.
Personal credit rating agencies only calculate scores for personal credit evaluation and provide them to consumers or financial institutions.
The principle is that before the conversion of the score system, loans that were collectively rejected for low credit ratings have been able to receive loans more advantageously with the credit score system.
▶Examples of changes before and after switching to the point system
Before and after the conversion of the credit score system (Source: Financial Services Commission)
The credit rating before switching to the point system is 7th grade, but when the score is 662, the bank will refuse resubmission because it is possible to be 6th grade or higher.
However, if the score system is changed, only the score is seen, so a bank with a score of 660 or more can be approved for a loan.
This is a change from the past, when only ratings were used.
This is an advantageous system for financial consumers in that they can easily identify and manage their credit score while checking their credit score.
You can easily check your credit score information in apps like Toss or Kakao Bank, so it would be better to manage it steadily to increase your score.
▣ Credit score score table
If so, please refer to the table below to see how your score has changed depending on your previous rank.
Credit Rating Credit Rating Section NICE (Nice.My Credit) KCB (All Credit)
Grade 1 Best 900~1000 942~1000
Grade 2 870~899 891~941
Grade 3 Excellent 832~890 840~869
Grade 4 768~831 805~839
Grade 5 General 698~767 750~804
Grade 6 630~697 665~749
Level 7 Caution 530~629 600~664
Grade 8 445~529 515~599
Grade 9 Hazard 335-453 445-514
10th grade 0~334 0~444
▣ Credit score level conversion
classification grade score
Credit card issuance standard 6 or higher
(NICE) score of 680 or higher or
(KCB) 576 points or more
※ Top 93% of personal credit score
Or, the possibility of long-term delinquency is 0.65% or less
Low-income financial products
(Sunshine theory, etc.) 6th grade or lower subject to support
(NICE) score of 744 or less; or
(KCB) 700 points or less
※ Bottom 20% of personal credit score
For medium interest rate loans
Grade 4 or lower based on preferential credit limit
(NICE) score of 859 or less; or
(KCB) 820 points or less
※ Bottom 50% of personal credit score
an act of restraint
Level 7 or lower
(NICE) score of 724 or less; or
(KCB) 655 points or less
※ Bottom 10% of personal credit score
▶When the score is changed from the past grade level, only grades 6 or higher were possible in the past for credit card issuance, but from 2021, NICE 680 points or higher KCB points 576 points or higher will be issued.
▣ How to raise your credit score
If you manage your credit score well, you can improve your score as well as maintain it.
I’ll tell you a few things, so let’s use them in real life to raise our scores one by one.
1. Create a main bank
Create a main bank to build transaction performance.
Since trust is the most important thing in financial transactions, we build creditworthiness through steady transactions with the main bank.
2. Overdue is absolutely prohibited!
If you are late even for just one day, your credit rating will drop dramatically.
This is a major cause of low credit ratings.
In these busy times, make sure not to forget and make sure to pay within the due date.
All overdue is automatically recorded and the record is evaluated higher than the repayment history, so overdue is absolutely not allowed.
3. Use direct debit.
In order to prevent the above-mentioned overdue and to build transaction performance, it is recommended to use automatic debit for the amount to be paid anyway.
In the case of utility bills, it is now possible to raise the score by submitting ‘non-financial information’, and please note that if you submit non-financial information such as telecommunication fee payment details, national pension and health insurance, it will be reflected in real-time credit score.
4. Card limits
It is said that using only 30-35% of the credit card limit gives the best credit rating.
If you do not have a credit card, using a debit card for more than 300,000 won per month will have a positive effect on your score.
I learned about the new credit score system so far.
I need to work on improving my credit score.
I hope you will see a lot of benefits with the newly changed credit score system.