Managing Your Korean Credit Rating

If you plan to live in Korea for a long period, you may want to understand your Korean credit rating (Credit Score). Here are a few things you may need to know to put yourself in a good position to access credit like credit cards, car loans, or a house loan.

About Credit Rating Systems

Globally, credit rating systems vary significantly. You can’t expect any country’s credit system to work the same as yours. The systems might be based on different information, used for different types of transactions, and managed in different ways. For example:

• The United States credit rating system is dominated by three major credit bureaus. Equifax, Experian, and TransUnion compile and provide credit reports based on individuals’ borrowing and payment histories, including loans, credit cards, and other financial data. A person’s credit rating can impact their ability to get a job, find a place to live, the price of their auto insurance, and so much more.
• Countries like India utilize a centralized approach with the Credit Information Bureau (India) Limited (CIBIL) as a primary bureau, providing credit scores and reports based on similar data.
• The European model often involves country-specific agencies, such as Schufa in Germany, which operates under strict privacy laws, providing credit information to subscribers within the country.
• In China, the government-managed credit reporting system is called the Credit Reference Center by the People’s Bank of China. It collects information on individuals and companies. However, Chinese companies have recently also developed private credit scoring models such as Sesame Credit by Ant Financial Services Group.

These variations reflect differing regulatory, cultural, and economic factors influencing how creditworthiness is assessed and reported around the globe.

Privacy and Protections

Each country’s credit rating system has its own set of rules regarding data collection, privacy, and consumer rights. Also, these systems don’t communicate so you might have perfect credit in your home country and no credit in South Korea. You truly are starting over from scratch.

All this to say, if you live in South Korea, you should learn about Korea’s credit rating system. Of course, finding information in English might seem frustrating. To get you started on your journey, here is what I have learned while living in Korea and managing my credit. Keep in mind, I’m not a financial advisor or expert and things change year by year. The following information is not advice, it’s threads to pull at to learn more.

Korean Credit Rating Bureaus

Korean society has different credit bureaus that track different types of creditworthiness. According to our research, the credit system in Korea started in 1985, and by 2011 there were 6 credit inquiry services in Korea:

• NICE Information Service
• Korea Credit Bureau
• Seoul Credit Rating & Information, Inc.
• e-Credible
• NICE D&B and
• Korea Enterprise Data. 

In 2016 a new heavy hitter launched called the Korea Credit Infomation Services (KCIS). This quickly became one of the primary credit reporting agencies for personal credit. You can read more about how it works in the brochure below.

As of 2024, the two primary personal credit bureaus include:

• KCIS
• NICE

Depending on an international resident’s banking choices and access to credit, they may or may not have one or both of these credit ratings. As of 2024, some international residents banking with NH bank had issues with their credit ratings not showing. Historically, international residents have issues with NH Bank in a variety of ways. Consider banking with KB or KEB Hana to potentially avoid similar struggles.

Now that we understand which credit bureaus international residents should be aware of, we can look at how such bureaus assess credit.

Credit Points and Credit Scoring

Korean Credit Scores are based on a point system that relates to an older rating system. This means you may hear or read about two different consumer credit rating systems in South Korea. First, there is the Credit Score (신용점수제) existing of points ranging from 200 points (worst) – 1,000 points (best). This is the most used crediting rating system. Second, there was a Credit Rating (신용등급) between 10 등급(worst) – 1 등급(best) that is being phased out. Korea started primarily using the Credit Score system (200-1000) instead of the Credit Rating (10-1) in 2021.

Example of Credit Grade v. Score

However, understanding how the Credit Score relates to the Credit Grade may help you better understand the credit rating system in Korea. Therefore, we will share the Lingua Asia chart. Below, it shows how your current Credit Score may compare to the old grading system.

Credit Grade	NICE (Score)	KCB (Score)
1	900 – 1000	942 – 1000
2	870 – 899	891 – 941
3	840 – 869	832 – 890
4	805 – 839	768 – 831
5	750 – 804	698 – 767
6	665 – 749	630 – 697
7	600 – 664	530 – 629
8	515 – 599	454 – 529
9	445 – 514	335 – 453
10	0 – 444	0 – 334

Credit Score Considerations

Below are two examples of how different Korean credit bureaus evaluate Credit Scores (200-1000) differently.

The previous image shows that credit companies generally consider at different rates:

1. length of time borrowing
2. debt level
3. credit data
4. overdue payments.

Since each agency applies weight to each category differently, a person’s credit score may differ between credit bureaus. You can see an example of this below.

Best Practices

Maintaining a healthy Korean credit rating (Credit Score) requires solid financial practices. Some of the following actions may be similar to managing your credit in your home country. However, some actions may be a little different. It may take time and a few mistakes to fully understand how everything works, but here are some tips to get you started.

Use a Korean Credit Card

Using your Korean credit card responsibly can help you build a positive credit history in South Korea. In fact, a credit card may exist as the easiest way for international residents to improve their Korean credit rating. Learn more about getting a credit card in Korea here.

Please remember, that using credit cards (Visa, Mastercard, American Express, Etc) issued in countries other than Korea does not impact your Korean Credit Score.

Avoid Long Installment Payments

In Korea, it’s assumed you will pay your credit card off each month, but you can set large payments over time. Avoid using this often. However, sometimes you need to leverage your credit over time. When this happens, try to keep installment payments below 6 months. Ideally, you want them below 3 months.

Use between 30%-50% of Credit

The Korean credit companies will recommend you use between 30%-50% of your total credit limit for best results. They want you to use it but not over-leverage yourself. Spending Wisely

Once you have a credit card, it’s crucial to manage it wisely. Ensure timely payments and avoid overspending to maintain a good credit score.

Avoid Applying Often for Credit

Avoid continually applying for different credit cards or trying to increase your credit limits. It’s ok to do it sometimes, but applying for different types of credit options will almost always lower your credit score.

Don’t Default

Defaulting on your credit can have severe consequences on your credit score, additionally, it can also lead to legal action. Such legal action may also impact your visa status or future visa applications, as it reflects poorly on your financial responsibility.

We have known some people who accidentally defaulted on their credit card payments because they didn’t understand how Korean credit cards worked. They didn’t know that if they wanted to pay their bill over time they needed to get installments approved before their bill arrived by requesting monthly payments on certain items. Needless to say, it was a complicated situation that impacted their credit.

Tracking and Checking Your Credit

Tracking your credit points and ratings in Korea is not hard. You can access your Credit through apps and websites that provide regular updates and other information. If you have a credit card or banking app in Korea you can often set them up so that you can access your credit. However, the apps may only be in Korean. It just depends on the bank. Some may even charge a small fee to provide daily access to your report and may only show you your report a few times a year.

However, the easiest option we have found is through Kakao Pay. They allow you to track your KCIS and NICE scores. That said, this option also requires some knowledge of Korean so you may need a friend to help you. The Kakao Pay credit tracking provides alerts to changes in your credit score and provides hints for actions to improve your credit score.

The following image shows how credit points are shown in Kakaa Pay:

Example of Tracking Credit

Recently, a volunteer opened a new credit card to get a cheaper phone bill. They agreed to share screenshots to help show how scores change over time. Readers can see how opening the new credit card impacted the two credit scores. The following timeline shows a decrease of 67 points for NICE.

And a decrease of 97 points for KCB:

The credit points will generally improve within a few months of opening the card as long as everything is paid on time and only 30-50% of the credit is used.

Good Credit Does Not Guarantee Access to Loans

As international residents, access to bank credit remains limited. It’s too easy for international residents to leave the country without paying debts. This means car loans and home loans may be hard to achieve. Additionally, credit cards may be harder to secure. This will vary by person.

Additional Reading

Information about Korean Credit Scores tends to be limited on Google. We found the following reading that may help you understand the system better or at least understand why so many international residents don’t know they have a Credit Score or how to manage it.

Understanding the Korean Credit Rating System: Scores, Bureaus, and How to Get Your Credit Report

KCB: About Consumer Credit Scoring

South Korea Credit to Households

Do You Have Something to Add?

At South of Seoul, we know we don’t have all the answers. Our posts document knowledge at a certain point in time and it can be limited by our lens on life. If you have additional information and insight, feel free to share it in the comments or email us. We update blogs regularly so that information is always improving.