Let’s take a look at the credit rating scorecard and how to raise your credit score.
You’ve probably heard a lot of stories about credit ratings disappearing. From January 1, 2021, the credit rating system disappeared and changed to the credit score system. So let’s take a look at this credit score system again, the credit rating scorecard. 신용등급 점수
Recently, I checked my credit score on apps such as Kakao Bank, Toss, and Bank Salad. As the credit rating system changed to the credit score system, the method of calculating the score changed, so there are some people whose scores suddenly and temporarily dropped. 좋은뉴스
Knowing how the credit score system is calculated is a great help in our financial life, so let’s take a look at this credit score system, that is, the credit rating scorecard.
30 government-supported low-interest loan methods
We will introduce how to get government-supported low-interest loans and 30 types of government-supported loan products. For a while, the Bank of Korea’s benchmark interest rate was kept at an all-time low, and then interest rates began to rise a while ago. interest rate hike
escapepoor.tistory.com
index
Credit Rating Scorecard
Characteristics of each credit rating
Credit scoring system scoring method
top cumulative composition
Possibility of long-term delinquency
Other credit score system additional information reflected
Financial life using the credit score system
Credit card issuance
mortgage loan
9 ways to improve your credit score
Using credit and debit cards
Thorough management of non-financial information
Credit Information Status Check
Refrain from borrowing through the Internet, phone, text message, etc.
Sound credit transaction history management
Setting the Right Debt Sizing
Primary bank settings
Prohibition of Third Party Loan Guarantee
Helpful articles for financial life
Credit Rating Scorecard
Credit Rating Scorecard
Credit Rating Scorecard
The credit rating scorecard is a table that ranks credit by grade based on your credit score. The credit score is set on a scale of 1 to 1000 and is evaluated based on a variety of personal credit information.
The reason why the credit rating score table was created is to compare how many grades my score was before as it was changed from the existing credit rating system to the credit score system.
This change was applied to prevent deviation from the 1st financial sector or lowering to the 2nd financial sector with a difference of 1 or 2 points. However, although financial companies set accurate standards, it is not easy for existing customers to check their position on the credit rating scorecard. A similar comparison was made.
The most famous places in Korea are All Credit and Nice. In fact, if you look at the score calculated by the financial company, you can still see the same as all credit information.
The credit rating scorecard will look at the information about these two companies.
Credit Rating Scorecard All Credit (Credit Rating Scorecard) Nice (Credit Rating Scorecard)
Level 1 900 ~ 1000 points 942 ~ 1000 points
2nd grade 870 ~ 899 points 891 ~ 941 points
Grade 3 832 – 890 points 840 – 869 points
4th grade 768 ~ 831 points 805 ~ 839 points
5th grade 698 to 767 points 750 to 804 points
6th grade 630 ~ 697 points 665 ~ 749 points
7th grade 530 ~ 629 points 600 ~ 664 points
8th grade 445 ~ 529 points 515 ~ 599 points
9th grade 335 ~ 453 points 445 ~ 599 points
10th grade 0 ~ 334 points 0 ~ 444 points
As you can see from the credit rating score table above, you can see that All Credit and Nice have a slight score difference. Therefore, it is better to check all credit scores rather than just one.
This is because it reflects a score that is more favorable to customers than in financial transactions.
Characteristics of each credit rating
Characteristics of each credit rating
Characteristics of each credit rating
If you look at the credit rating scorecard and check your rating, you won’t be able to tell whether this rating is a good rating or a bad rating.
Grades 1 and 2 are the best grades. It has a long history of credit transactions and various and excellent credit transaction records, so it belongs to a rating with very low possibility of delinquency or financial insolvency.
Grades 3 and 4 are not the best grades, but belong to the decent grades. Although there is no active credit transaction performance as a good grade, it is possible to enter the good grade if consistently good transactions are continued, and it belongs to a grade with a very low possibility of insolvency.
Grades 5-6 are typical grades. Those who have transactions with relatively high interest rates, have a short history of delinquency, and non-performing seats are at a normal level.
Levels 7 and 8 are caution levels. From this grade, it is a grade that requires active management of credit scores. It is a grade with a high probability of insolvency, with a lot of transactions with companies with relatively high interest rates, and a relatively high history of delinquency for a short period of time.
Grades 9 to 10 are currently overdue or have a very serious overdue experience, so the possibility of insolvency is very high.
Credit scoring system scoring method
Changes in the credit score inquiry screen
Changes in the credit score inquiry screen
The existing credit rating system was divided into ten levels from 1 to 10. Now, it has been converted into a score from 1 point to 1000 points, and it has changed to an individual credit score.
Some of you may think that there is nothing different about just scoring, but there are various ways to calculate scores and additional information.
The credit score system evaluates three indicators such as credit score, upper cumulative composition ratio, and long-term delinquency possibility, and you can see that financial institutions check the credit score required for a loan. Let’s look at the top cumulative composition ratio and the possibility of long-term delinquency, which were added as the credit score system changed.
top cumulative composition
First of all, the top cumulative composition ratio, in simple words, ranks from 1st to 100th when all the people who do financial transactions are calculated. It divides from 0% to 100% like this.
The closer to 0%, the better credit position and good credit quality, so 0% is considered perfect. 1%, 2%, and 100% are divided like this.
Top cumulative composition ratio: The rank (percentile) of all citizens is divided from 0 to 100%, and the higher the score, the better the credit quality (the lower the score, the better the credit status)
Possibility of long-term delinquency
And one more concept was added. This is called long-term delinquency.
If 1,000 people with the same score as me took out a loan, this person quantified the possibility that this person would be overdue for a long term of 90 days or more within a year.
So this is quantified like this from 0.01% to 2.00%. Again, 0.01% is a very low probability of delinquency, and 2.00% is a high probability of delinquency.
Possibility of long-term delinquency: Statistical data that quantifies the expected number of people who are likely to be in a long-term delinquency for more than 90 days within a year after receiving a loan from 1,000 people in the same score range as me. good credit
Other credit score system additional information reflected
How to improve your credit rating
How to improve your credit rating
The credit score system is calculated by reflecting additional information that was not reflected in the credit rating system.
First of all, if you received a loan from a lending company, overdue information is also reflected. It was not reflected in the credit rating system, but it is said that it is reflected in the credit score system.
And in the past, if you get a lot of loans from 1st and 2nd finance, if you take out a loan from 2nd finance, your score will drop further. But now, depending on where the financial company gets the loan, the percentage that lowers the score is reduced, and it is said that it reflects more what percentage the person is borrowing at what interest rate. If you have a good credit rating, you can use a loan with a low interest rate, so it is said that you first check what percentage interest rate this person is using.
You know you have to spend a lot on credit cards to improve your existing credit score. However, even if you use a debit card, it is reflected in your credit score, and non-financial information is also reflected in your credit score.
It is said that you will calculate your credit score by reflecting the 4 major insurance payments such as health insurance fee, public fee, communication fee, online shopping information, social media information, and smart store sales.
Financial life using the credit score system
In order to have a healthy and unobstructed financial life, you must thoroughly manage your credit score. From credit card issuance to loan, depending on your credit score, you may not be issued a credit card or you may not be able to get a loan.
Credit card issuance
In the past, when issuing a credit card, it was possible to issue a credit card because it was 6th grade, and it was impossible to issue a credit card because it was 7th grade. Now, there must be a lot of people wondering how to look at it when it changes to the credit score system.
In the credit rating system, credit card issuance must be grade 6 or higher. In the credit score system, it is said that card issuance is possible when the top cumulative score is 93% or less or the possibility of long-term delinquency is 0.65% or less.
And if several credit evaluation societies now score, it may be slightly different. In this case, it is said that the customer is issued with the most advantageous score.
Also, even if the standard is not met, you can issue a credit card if you have monthly disposable income. If you have disposable income (extra money), which is income that can be consumed or saved, not for living expenses, it is possible to issue a credit card based on the exception recognition standard.
In addition, in the case of services that allow you to borrow money in a hurry, such as cash advance, card loan, or revolving, or pay money for a long term, it is good to note that card issuance may be rejected if you use more than three credit card companies.
Good customers can receive good customer benefits from credit card companies or financial institutions if the top cumulative score is 70% or less and the possibility of long-term delinquency is 0.25% or less.
mortgage loan
credit score system mortgage loan
credit score system mortgage loan
Housing Finance Corporation applies loans based on 1000 to 445 points. It is recommended that you refer to the detailed instructions for each bank.
The standard for handling Bogeumjari Loan, which is a long-term fixed-rate, amortization-type mortgage loan, is also subject to credit evaluation, which was only available when the CB grade was 1 to 9. It is subject to change for handling only.
9 Ways to Raise Dragon Points
How to improve your credit score
how to improve your credit score
It has become more important than anything to manage this calculated credit score well. So let’s look at the do’s and don’ts to improve this credit score.
Using credit and debit cards
You must use your credit card without overdue. In addition, it is important to use the check card well without overdue and leave a record. This is because debit card usage history is also reflected in the credit score system.
Thorough management of non-financial information
Payment of utility bills such as health insurance premiums, communication costs, online shopping information, and SNS information are also reflected. Credit evaluation will be improved for students and full-time housewives who did not have a history of financial transactions. Therefore, it is also important not to overdue things like telecommunications and utility bills.
Credit Information Status Check
It’s a good idea to check your credit score carefully. Recently, you can check your credit score in real time with apps such as Kakao Bank, Toss, and Bank Salad. Credit cards, loans, overdue, etc. If there is a change like this, it would be nice to check if there is anything wrong with your credit information. You can manage your credit score because no matter how many inquiries you make, it does not affect your credit information.
In addition, any change in address or contact information must be reported to the financial institution. Recently, there are sites where you can change addresses or contact information in bulk, but there are also sites where mass changes are not possible, so you can request changes directly to your financial institution.
There are many fintech apps that can check my credit score for free these days. You can search on Kakao Bank, Toss, Bank Salad, etc.
Refrain from borrowing through the Internet, phone, text message, etc.
Usually, even if a new loan product or financial product comes out in the financial sector, there is no case of actively recommending it via phone or text message. If you received a call or text, it’s a reliable company or the highest interest rate of 20 % (from the second half of 21) It’s good to make a careful decision and use it.
Sound credit transaction history management
It is really important not to take out too many loans and not to be late. If overdue is more than 100,000 won and more than 5 business days, it will be recorded, so it is more important than anything to manage it well by referring to the benefits.
When you are in arrears or taking out a large amount of loans, or when you are late in paying cash advances, card loans, or interest payments, this is a factor that lowers your credit score, so you need to build up your credit without overdue.
And if you have a loan, the order in which you repay it is also important. The first is to repay the oldest overdue first, and the second is to repay the higher interest rates first. And the third is that repaying in the order of the largest amounts can prevent your credit score from lowering and quickly restore your credit score.
Setting the Right Debt Sizing
It is desirable to set up a debt that is appropriate for your financial situation. For example, if the annual salary is 30 million won and the loan is 50 million won, the loan amount exceeds the annual income, so the possibility of delinquency increases, life becomes difficult, and credit score is inevitably adversely affected.
Primary bank settings
If you choose one financial transaction bank and make steady transactions, it will work as a plus factor in your credit score and receive benefits, so it is recommended that you use your main transaction financial company steadily.
Prohibition of Third Party Loan Guarantee
Keep in mind that guaranteeing a loan for someone else can be a road to ruin. Although the joint guarantee system was abolished in 2019, there are places where joint guarantees are illegally requested, such as some private finances.
Once again, it is not necessary to make financial transactions to increase your credit score, but there are many ways to evaluate various credits such as communication expenses, utility bills, and smart store sales history. I hope you do.