Credit Delinquents to Start with Clean Slate

People with bad credit standings and who had received loans from Han-maum Finance, the new name of Bad Bank, may start enjoying normal financial transactions after repaying their debts for a year without any further delinquencies.

Up to now, credit delinquents had difficulty in receiving normal financial services even after going through the loan programs provided by Bad Bank and receiving absolution because their credit records were left in the database of the federation of banks.

Han-maum Finance announced on July 30 that it received approval from the government to bypass a procedure in which it had to report to the federation of banks with the credit information of delinquents who finished the program starting on August 2.

Instead, their credit histories will be sent to Korea Information Service (KIS), a private credit bureau, where a proper credit rating may be given for those former delinquents. KIS will give the lowest credit rating for Bad Bank users and add 50 additional points every month as their repayment ability improves and as they repay on time.

For those debtors who proved their will to clear off the debt and ability to payback after a year in the program, their credit rating will be adjusted to that of a regular credit user and will be able to receive loans or cards from banks.

Keuk-In Bae bae2150@donga.com