A credit-recovery support measure that deletes arrears history if low-income people and small business owners who have failed to repay arrears debts of 50 million won or less fully repay the arrears amount by Dec. 31 this year will take effect on the 30th.
Financial authorities said on the 29th that this is an extraordinary, one-time measure to help those who faithfully repaid arrears debt in full return quickly to normal economic activity amid difficult conditions such as an economic downturn and martial law as an emergency situation.
Those eligible for credit-recovery support are borrowers for whom arrears of 50 million won or less arose between Jan. 2020 and Aug. this year, but who fully repay the arrears amount by Dec. 31 this year. During this period, 2,955,000 individuals and 748,000 sole proprietors incurred arrears. As of last month, the credit of 2,449,000 individuals and 128,000 sole proprietors who have already fully repaid the arrears amount will be restored automatically. The support target this time also includes 1,172,000 borrowers (773,000 individuals and 399,000 sole proprietors) who did not receive benefits from the credit-recovery support measures in 2021 and last year.
Eligible recipients will see their credit scores automatically rise without a separate application. The 1,126,000 people who have not yet fully repaid the arrears amount can also receive credit recovery without a separate application if they fully repay the arrears amount by the end of this year. Eligibility can be checked directly on the credit rating agencies' websites.
Financial authorities expect that, due to the credit-recovery support measure, individuals' credit scores will rise by 40 points on average, from 616 to 656. For those in their 20s, scores will rise by 50 points, and for those in their 30s, by 42 points, which is analyzed to have a strong effect in supporting a rebound among young people. Accordingly, 290,000 people are expected to be able to newly receive credit cards, and 230,000 to exceed the average score for new bank loans.
Financial authorities noted, while operating existing debt adjustment programs such as the Sae Chulbal Fund in a substantive manner, we will also implement support measures such as long-term arrears bond debt adjustment for inclusive finance without a hitch, adding, for the sustainable growth of the economy, we will continue to listen to voices on the ground from low-income people and small business owners and pursue consumer-centered financial policies with a high sense of impact.