The financial sector needs a basis to judge whether it is okay to trust this person and lend money when lending to an individual. Because if you borrow money and can’t pay it back, you lose that much. In the financial sector, when this happens, how sincere this person has been in transactions and paying back money is considered, and the credit rating score is used at this time.
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How to improve your new credit score 좋은뉴스
The credit rating scorecard is, simply put, a table that indicates how trustworthy an individual is in social life. The biggest reason people want to increase their credit rating score is that whether or not they have issued a loan or credit card, and the applied interest rate are all deeply related to their credit rating score. A higher credit score not only makes it easier and easier to get more loans, but also lowers the interest you have to pay on borrowed money.
Credit Rating Scorecard
Many people often misunderstand that it is the country that scores credit ratings, but this is not true. Credit rating scores are basically evaluated by credit rating agencies such as Nice and All Credit. In addition, each financial company, such as banks, savings banks, insurance companies, credit card companies, and financial investment companies, often has its own credit rating system.
The credit rating scorecard, which is subject to the credit scoring system, is a perfect score of 1000 points. The higher your score, the more likely you are to pay off your loan. So, the higher your credit score, the more money you can borrow at a lower interest rate. Among credit rating agencies, NICE puts a lot of emphasis on current delinquency and past debt repayment history information, while All Credit focuses on the type of loan and card usage, such as how much money has been borrowed from several financial institutions, and the credit rating score. assign.
Credit Rating Conversion NICE
Credit Rating Scorecard All Credit (KCB)
Credit Rating Scorecard
Level 1 900 ~ 1000 points 942 ~ 1000 points
2nd grade 870 ~ 899 points 891 ~ 941 points
3rd grade 840 ~ 869 points 832 ~ 890 points
4th grade 805 to 839 points 768 to 831 points
5th grade 750 ~ 804 points 698 ~ 767 points
6th grade 665 to 749 points 630 to 697 points
7th grade 600 ~ 664 points 530 ~ 629 points
8th grade 515 to 599 points 454 to 529 points
9th grade 445 ~ 514 points 335 ~ 453 points
10th grade 0 ~ 444 points 0 ~ 334 points
It is not difficult for a person with a high credit score to issue a credit card, and he or she can get a loan at a low interest rate even if the same amount is borrowed from the same bank. Even if you take a loan from the same financial sector, the interest rate between a person with a high credit score corresponding to the past 1st grade and a person with a past 6th grade can be up to 4 times higher.
If you are rejected because your credit rating score is lower than the standard for loans in the first financial sector, you have no choice but to borrow money from the second financial sector, etc., but it is increasingly difficult to repay the principal because the interest rate increases as you go down, such as the first financial sector, the second financial sector, loan companies, and private bonds. You can fall into a vicious cycle of losing. If you score 570 points or more in the case of All Credit (KCB) or 670 points or more based on the Nice standard, you can get a credit card issued. can fly
How to improve your new credit score
▣ Submission of non-financial information
Did you know that some of the credit evaluation items have been reorganized as the standard for evaluating credit has changed to a score system? Among them, a point worth noting is that a non-financial item has been newly established. If you have paid various utility bills such as telecommunications bills, health insurance, national pension, and utility bills for more than six months, you can receive additional points on your credit score by submitting your payment results to a personal credit information company.
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Acquire additional credit points when submitting sincere payment results
These days, there are many means to comprehensively diagnose and manage personal credit information through applications, but companies such as Toss, Kakao Bank, Naver Pay, and Fink provide services that raise credit scores in real time. You can raise your credit score within a few days by submitting non-financial information such as communication bill payment history for more than 6 months, national pension, and health insurance through the app to the credit rating agency.
In addition to the application, payment results can also be submitted through the website of a credit information inquiry company, mail, visit, fax, etc. However, the credit score that can be raised after submitting the payment performance can show a big difference from 1 to 2 points up to dozens of points depending on each individual situation and the standard of the credit rating agency.
▣ Repayment in order of highest interest rate
If you have existing loans, it is better to pay off the ones with higher interest rates first. This is because credit rating agencies reflect negatively on credit ratings for high-risk loans, taking into account the type of loan, the level of interest rate, and the percentage of repayment. In particular, the minus passbook is judged to be burdened with debt as much as the limit, so canceling it if not used helps to increase your credit rating score.
▣ Card Usage
As not only credit cards but also debit cards are included in the credit rating score evaluation, the proportion of scores has increased significantly. Therefore, it is recommended that social beginners who do not have active transaction history to evaluate credit first make a main bank that receives a monthly salary and issue a check card. If you use the issued debit card for the first 6 months and spend more than 300,000 won per month and spend more than a certain amount for the next 6 months, you can raise your credit score from 4 to 40 points depending on the amount you use.
Credit card usage patterns are also important. Rather than using multiple credit cards, it is better to use only one or two credit cards for a lump sum payment, and use less than 50% of the limit amount. It is recommended not to use cash advances, card loans, or installment services frequently.
If you are in a situation where you need to receive a credit card loan or cash advance, receiving a lot at once is better for evaluating your credit score than receiving it in several installments. Occasionally receiving a card loan or cash advance once or twice does not greatly affect the rise or fall of your credit score, but if you use it frequently, it can have a negative effect of so-called blocking due to insufficient current financial circumstances. Therefore, it is recommended to use only 30-40% of the loan limit for the minus bankbook like a credit card, and if you have used more than that, paying it back within 3 months and maintaining the consumption rate at 30-40% is helpful when evaluating your credit rating score.
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Frequent use and delinquency of installments and card loans adversely affect credit rating scores
▣ If you don’t want your credit score to drop, overdue is absolutely prohibited
Even a small amount of overdue payments such as cell phone installments or credit card payments can be fatal to your credit score. The longer the number of days overdue, the greater the impact on your credit rating score. If the overdue amount is more than KRW 300,000 and the number of overdue days is less than 30 to 90 days, it is classified as short-term overdue and reflected in the credit score for only one year. This can adversely affect your credit score for up to 5 years.
In particular, in the case of long-term overdue, the credit information agency and credit information company are listed as default, which increases the degree of impact. In addition, since a person who has been in arrears once is considered to be more likely to be in arrears next time, paying back the arrears does not immediately restore the credit score. Even if the overdue amount is not large or the period is short, it is not directly reflected in the evaluation of the credit rating score, it is too early to be relieved. This is because even if the delinquency is less than 10 won and less than 5 business days, records remain at the overdue financial institution, which can result in disadvantages in the financial institution’s self-examination.
There’s always a rumor that frequent credit score checks can lower your credit score, but this isn’t true. This is because the standards have been changed since 2011 so that the fact of a credit inquiry does not affect the credit rating. The rumor that marriage increases your credit score is also not true. Marital status is not taken into account when evaluating your credit score, and your spouse’s credit score does not affect your credit score. Having a lot of income or property doesn’t mean you have a high credit score. Credit rating score is the most important thing when you do a financial transaction properly.
The basic principle of credit rating score evaluation is simple. Whether you have borrowed money excessively compared to your ability, whether you have not paid off the money properly and overdue after making a credit transaction, whether the number of debts is excessive, and whether you have borrowed money intensively in the past few months. is a basic consideration for