Today, we are going to learn about credit rating scores and how to raise them. Although the credit rating system has been abolished and changed to a credit score system, there are still people who talk about ratings. Also, it is said that financial institutions also refer to credit ratings when checking credit scores.
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After the abolition of the credit rating system, the importance of credit scores has increased more than before. This is because financial institutions first check their credit score when an individual who wants to sign up for a financial product or receive a loan visits a branch.
It is safe to say that the loan interest rate and the negative bankbook interest rate are determined according to the credit score. There are two main types of credit scores. KCB Credit Score (All Credit Credit Score) and NICE Credit Score (Nice Credit Score)
Although the credit rating system has now disappeared, some financial institutions still refer to credit ratings along with credit scores. Let’s look at the credit score table and find out about the credit score for each section
KCB credit score sheet
NICE Credit Score Sheet
Let’s compare the KCB credit score sheet and the NICE credit score sheet together. Credit scores by credit rating are as follows:
KCB Credit Score (All Credit Credit Score)
Grade 1: 942 ~ 1000 points
Grade 2: 891 ~ 941 points
Grade 3: 832 ~ 890 points
Grade 4: 768 to 831 points
Grade 5: 698 to 767 points
6th grade: 630 ~ 697 points
7th grade: 530 ~ 629 points
Grade 8: 454 to 529 points
9th grade: 335 ~ 453 points
Grade 10: 0 to 334 points
NICE Credit Score (MyCredit Credit Score)
Grade 1: 900 ~ 1000 points
Grade 2: 870 ~ 899 points
Grade 3: 840 ~ 869 points
Grade 4: 805 to 839 points
5th grade: 750 ~ 804 points
Grade 6: 665 to 749 points
7th grade: 600 to 664 points
Grade 8: 515 to 599 points
Grade 9: 445 to 514 points
Grade 10: 0 to 444 points
credit score sheet
credit score sheet
Characteristics of each credit rating
The credit rating system has disappeared, but you can find out how good your credit score is by using the table below.
A credit score of 1 to 4 is considered good. Up to a grade 6 credit score is good, and if the credit score goes below 600, caution is needed and credit score management is necessary.
If you don’t manage your credit score, you have no choice but to get a high-interest loan or a loan from the 2nd and 3rd financial institutions. However, I received a loan because my credit score was low.
* 1Financial bank types and loans
* 2Financial bank types and loans
* 3 types of financial banks and loans
Because of this, the vicious cycle is repeated, so you need to properly manage your credit score from the beginning.
By Credit Rating – Characteristics
Characteristics of each credit rating
Loan interest rate by credit score
You can get a sense of how much the loan interest rate differs by credit score and credit rating by looking at the table below. Of course, there is no need to look at the absolute interest rate because the base interest rate can be low or high depending on the time period.
In the table below, we only need to look at the difference (gap) in loan interest rates by credit score for high credit, medium credit, and low credit. In severe cases, loan interest rates by credit score may vary by nearly 7% from bank to bank.
If the loan interest rate is 7%, there is a difference of 7 million won per year when borrowing 100 million won, and a difference of 35 million won per year when borrowing 500 million won. can be seen as a huge difference
In particular, in the case of low credit people, it can be seen that the interest rate and interest cost of loans are much reduced even if the credit score that belongs to the middle grade of 5-6 through credit score management is raised. Therefore, it is necessary to strive for a credit score of 700 or higher.
Credit Rating – Loan Rate
Loan interest rate by credit score
raise your credit score
The most important thing to improve your credit score is not making arrears and not using credit card loans. When using credit card loans such as card loans and cash advances, they are counted as second-tier financial loans.
As a result, a person with poor cash flow or a person who is not able to repay is recorded, and their credit score goes down.
* Comparison of difference between cash advance and card loan
* Credit score recovery period when using card loan
And it is better to use a credit card payment than to make a cash payment that does not leave a financial transaction history. Of course, you should only pay for the necessary items by credit card.
Paying only about 30% to 50% of your credit card limit helps improve your credit score. In addition, there are various methods such as creating a main bank, leaving transaction records, and making a lump sum payment when paying by credit card.
There is a very detailed article on how to improve your credit score, so be sure to read the following article. In addition, there are cases where false facts about raising credit scores are spread as if they were true.