Blocking financial sectors from sharing information on bankruptcy and rehabilitation of re-established business owners who are faithful to management
(Seoul = Newsis) Reporter Park Min-seok = On the afternoon of the 23rd, Financial Services Commission employees are working at the Seoul Government Complex in Jongno-gu, Seoul. 2020.04.23. (email protected)
(Seoul = Newsis) Reporter Kim Hyung-seop = The grace period for registering delinquent information for young people who have failed to repay their student loans on time will be extended. For those who have currently closed their businesses and are re-establishing businesses, sharing of negative credit information with the financial sector will be restricted if they pass the honest management evaluation.
The Financial Services Commission announced on the 23rd that the revision to the enforcement ordinance of the Credit Information Use and Protection Act (Credit Information Act), which includes improvements to the system related to credit recovery support for honest business start-ups and young adults just entering society, was passed at the Cabinet meeting.
Previously, if a government student loan was overdue for more than 6 months, the delinquency information was registered in the credit information office, but the registration was postponed for up to 2 years after graduation from university. However, as the employment crisis has made it take a long time for college students to get their first job after graduation, there have been cases where they have to repay their student loans before getting a job, and the need for system improvement has been raised.
The amendment extended the period of delay in registering student loan delinquency information for young adults entering society from a maximum of two years to a maximum of three years after graduation. This measure was implemented on the 1st of this month after the Credit Information Service revised the General Credit Information Management Regulations.
The Financial Services Commission estimated that around 2,000 young people would benefit from this measure.
The amendment also provides a basis for credit information agencies to receive honest management evaluation information. This is a measure to block negative credit information on honest management re-establishment entrepreneurs from being shared with the financial sector.
Currently, those who have a history of business closures are having difficulty obtaining loans from financial institutions due to negative credit information such as rehabilitation or bankruptcy.
In relation to this, the Financial Services Commission has decided to limit the sharing of negative credit information with financial institutions if a new business owner passes the ‘In-depth Evaluation of Honest Management’ operated by the SMEs and Startups Agency (SME Agency), and to this end, the amendment provides grounds for credit information sources to receive honest management evaluation information from the SME Agency.
The In-depth Evaluation of Sincere Management is a system that evaluates the efforts of new entrepreneurs to prevent business closure and their readiness for revival, and provides preferential interest rates to those who pass.
Starting in September, when the computer development linking the Small and Medium Business Administration and Credit Information Service is completed, new business owners who pass the in-depth evaluation of sincere management after 2023 will automatically have their negative credit information blocked without a separate application, resulting in an increase in their credit score.
The Financial Services Commission said, “It is expected that the credit of those who have re-established their businesses through honest management will be restored and that they will be able to secure private funds such as new bank loans.”
Meanwhile, the revision bill also provides grounds for information providers such as financial institutions to stop providing information if MyData service providers do not pay the information provision fee. It also includes provisions to allow the Credit Information Association to autonomously conduct review work on business advertisements related to credit information, debt collection, and MyData for consumer protection.
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