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[CEO Column] Credit Mirrors Oneself

Posted July. 06, 2001 10:57,   


We have become keenly aware of the huge influences of the credit rating by the international credit rating providers such as the Moody`s Investors Service to the Korean economy throughout the money crisis. Now people understand that the nation`s important economic activities such as the issue of the foreign bonds and the foreign investment are restricted by the credit rating which the unfamiliar foreign institutions grant.

Just as in the national economy, the credit plays the crucial role in the corporate`s operation. The credit is involved in the competitiveness in the market as well as the image and reputation of the brand name.

The scales of fund raising and the cost depend on to the large extent the credit rating. The customers and the investors also usually decide to invest on the basis of the credit rating of the company.

The importance of credit can be applied to each individual in the same way. The degree of credit not only involves the simple matters like whether to borrow the money or not from the banks. It became the core measure to decide the interest rate and the level of the service that the financial institutions offer. Now the credit has become the most valuable asset for the nation, the corporate and the individual.

Recently, as the consumer finance has expanded, the financial institutions actively began to differentiate the quality of the services. Introducing the `Credit Scoring System`, most banks evaluate synthetically the credit state, the period of transaction, and the results of transaction by each customer. According to the evaluation, they strictly differentiate the contents constituting the financial commodity.

In particular, they have strengthened the `Customer Relationship Management` to break down the classes of the customers. While the superior customer can receive the hospitality as a life-time customer, the low-credit customer may no longer continue to use the banks.

Now is the era when even the individual should manage his/her own credit systematically and prudently. But in actuality, many people do not realize that the credit grade can be changed due to the unintentionally delayed payment for the bills. Whenever I see the case that a personal credit drops because of the careless overdue of the small bills, I cannot help but feel pity.

We often see that people lose all their property instantaneously due to the failure of the investment or the business. The material property can be recovered according to their own efforts. But the spoiled credit is hard to recover. The blots in the credit can hardly be erased like the scars in the face.

The credit is his/her own face. People have the first impression when they see somebody, and can guess the effect of the years on him/her with the changing face as time passes.

The credit that is well-managed for a long time would be the most valuable property to anybody.

(Lee Hun-Chool, the president of the LG Capital)