Shinhan Card Develops Credit Rating Model for Foreign Residents

Shinhan Card Co. has developed a credit rating model for foreign residents in South Korea.

The new model will make it easier for foreign residents to get a credit card in Korea. Until now, foreign residents have had difficulties in having credit cards issued as domestic credit companies cannot analyze their credit ratings properly due to a lack of financial transaction history in the country. The new credit rating model is expected to allow card companies to expand their customer base and launch new businesses.

Shinhan Card announced on Jan. 24 that its in-house venture firm “High Credit” has developed a credit rating model for foreign residents. The company greatly improved its risk analysis capability by incorporating non-financial information gained through big data into its assessment model, which relies on a customer’s existing financial transaction history. It is the first Korean credit card company to develop such a model.

The model measures customers’ credit ratings by combining non-financial information gained through the utilization of their life information with financial information, including income estimation and days in arrears. Non-financial information includes a history of residence changes, which suggests customers’ residence stability, and a history of cellphone number changes, which allows card companies to guess the relationship stability with people around them.