Posted March. 06, 2009 05:36,
Timely payment of public utility charges will be reflected in an individuals credit ratings, the Financial Services Commission said yesterday.
Financial institutions and credit information agencies will reflect credit records collected by state-run organizations in personal credit ratings as early as September.
They include payment of national pension, health insurance and electrical charges.
If the new system is adopted as planned, those who pay utilities on time will be recognized as capable of repaying debts and given higher credit ratings.
As the revised bill on credit information was passed by the National Assembly Tuesday, well setting up relevant ordinances. Under the revised bill, credit data collected by state-run organizations such as the Korea Electric Power Corp. and the National Pension Service can be used by financial institutions and credit rating agencies, the commission said.
The enforcement ordinances will take effect from September.
According to the revised bill, financial institutions and credit rating agencies can ask state-run organizations to suggest personal credit information after getting an individuals approval.
Records on deferred payment of national and local taxes and tariff can be reflected in credit evaluation. The revised bill, however, allows other records including payment of national pension, social insurance and public utility charges to be factored into personal credit ratings.
A commission official said, To protect privacy, we will not provide records that could negatively impact a persons credit rating such as records on non-payments and late payment. Were negotiating with agencies to reflect records on national pension, health insurance and electrical charges into personal credit ratings.
Payment records on social insurance and public utility charges are considered objective criteria proving personal income and financial soundness. To this end, financial institutions have said they need such information to more accurately gauge personal credit ratings.
Critics, however, warn that credit ratings will fall sharply if late payments of utilities are also considered. According to the National Health Insurance Corp., the number of households whose health insurance was overdue for three months or more was 2.03 million in late January out of 8.05 million subscribers.
After negotiating with relevant agencies, the commission will confirm standards and procedures and announce the enactment of the revised enforcement ordinances next month at the earliest.