[True or False #2] What you need to know about ‘Individual Credit Rating’



As a follow-up post, I will introduce you some more misperceived information about individual credit rating.




Once you clear overdue credit card payment, your credit rating is automatically upgraded?

[False] Credit rating is evaluated by not only overdue payment record but also by other factors such as credit card usage, repayment of loan record and other related personal information. It is a comprehensive set of evaluation, which is not based on the sole criterion.


Overdue payment record is deleted as soon as being paid back?

[False] It is true for most of the cases, but not all the time. For some particular cases, overdue payment record is reserved for a certain period. This is called ‘record keeping period’, which is up to five years. Some detailed information is to be kept including the purpose of record keeping, the amount of overdue payment and the period having been overdue.


Tax arrearage does not influence credit rating?

[False] If tax arrearage is more than KRW five million, it deteriorates an individual credit rating. In this case, personal information acquired by public entities is to be used for credit rating evaluation purpose.


Petty amount of overdue payments are okay?

[False] Despite the amount of overdue payment being petty, it can harm an individual credit rating as accumulated. Bank loan, credit card payment and bills for mobile phone, internet, gas, water and electricity are all subject to overdue payment influencing credit rating.


The more loans you have, the lower your credit rating?

[False] What matters for credit rating is not the fact that you were granted loans, but the fact whether you make payment for them or not. You would rather expect your credit rating being upgraded, if you make payment for your loan and show your financial capability.






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