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Clubs · Nov 20, 2024 · 10 min read
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Credit information plays a crucial role in assessing financial capability and managing credit risk. The State Bank of Vietnam is responsible for managing and supervising credit information activities, ensuring transparency and safety for the financial system. This article will help you understand more about credit information and the role of the State Bank in this field.
Credit information is information about borrowers and information related to borrowers at credit institutions and foreign bank branches. In which: Borrowers are legal entities or individuals that have credit relationships with credit institutions or foreign bank branches. Credit information plays an important role in preventing risks and ensuring the safety of credit granting activities of credit institutions.
In Vietnam, credit information activities of the State Bank of Vietnam (SBV) are organized and implemented by CIC. Accordingly, CIC performs the following functions: (i) Receive, process, store and manage the national credit information database; (ii) Providing credit information for the purpose of preventing and limiting credit risks; (iii) Scoring and credit rating of legal entities and natural persons in the territory of Vietnam to serve state management requirements of the State Bank of Vietnam; (iv) Providing credit information products and services according to regulations of the State Bank of Vietnam and the law.
Currently, the Vietnam National Credit Information database managed by CIC stores information on more than 55 million customer records, with the participation in reporting information of 100% of credit institutions operating in Vietnam, voluntary organizations. Credit information activities aim at the following purposes:
The first, Support the State Bank in performing its management, policy planning, inspection and supervision functions; contributing to ensuring the safety of Vietnam's banking system.
Monday, Support credit institutions to prevent and limit credit risks.
Tuesday, Support borrowers in accessing credit capital from credit granting organizations, contributing to promoting socio-economic development.
Credit score is an index that reflects a borrower's creditworthiness. That score indicates a borrower's ability to repay and pay off loans in full and on time. The higher the credit score corresponds to the lower the risk of not paying debts and the higher the ability to access credit.
Each agency or organization that conducts credit scoring will have scoring scales corresponding to different levels of risk. At CIC, credit score is the result of a calculation process combining the borrower's credit information including: Identification information, information about the customer's outstanding debt, loan payment history and some other related information.
According to CIC's natural person credit scoring model, borrowers' credit scores are applied according to the principle: Low grade, high score - Low risk level; High rank, low score - High risk level. Specifically, borrowers' credit scores (from 403 - 706) are divided into 5 levels: Bad (rank 9, rank 10); below average (rank 7, rank 8); average (rank 5, rank 6); good (rank 3, rank 4) and very good (rank 1, rank 2); corresponding to 10 ranks from the lowest is rank 10 and the highest is rank 01.
To To be able to improve your credit score and access credit more conveniently at credit institutions, customers need to consider doing:
One is, Only borrow money/open a credit card when really necessary and carefully calculate your ability to repay debt based on your actual income.
Second, have a plan to repay debt fully and on time; Always consider your financial capacity to plan a spending plan to repay debt in full and on time; Always be conscious of repaying debt, even if it is a small debt (you can use automatic debt reminder tools such as memory software on your phone).
Third, Regularly check your credit information to monitor your information and creditworthiness and avoid being taken advantage of by thieves. Have a solution if you discover that your information is inaccurate.
When having many debts at the same time, customers should try to pay off the current debt balance gradually, and should not incur new debts, especially unsecured debts and consumer loans.
According to regulations in Circular No. 11/2021/TT-NHNN dated July 30, 2021 of the Governor of the State Bank of Vietnam regulating asset classification, deduction levels, methods of setting up risk provisions and use of provisions To handle risks in the operations of credit institutions and foreign bank branches, debts at credit institutions are divided into 05 groups, of which debts that are overdue for 90 days or more are considered bad debts, including debts that are overdue for 90 days or more. Debt groups are as follows: Group 3 is below standard (overdue from 91 - 180 days), group 4 is doubtful (overdue from 181 - 360 days) and group 5 is likely to lose capital (overdue over 360 days). Bad debt is understood as debts that have not been paid on time and are overdue for payment as committed in the credit contract.
According to Circular No. 03/2013/TT-NHNN dated January 28, 2013 of the Governor of the State Bank of Vietnam regulating credit information activities of the State Bank, all negative information about borrowers is used by CIC to create financial assets. Credit information products for a maximum period of 05 years from the end date of that negative information.
Customers with bad debt history still have the opportunity to access credit, based on risk appetite and credit institutions' customer evaluation principles.
The risk assessment for customers is based on many factors according to the law and internal regulations of each credit institution; Information provided by CIC is one of many reference and support channels, not the only factor affecting the decision of credit institutions.
When discovering incorrect credit information, customers need to take the following steps:
Step 1: Register an account and check your credit information at CIC.
Step 2: If information is discovered to be incorrect, customers should report it to CIC via hotline 1800585891 or the "Complaints/feedback" section on the website: http://cic.gov.vn (enclose supporting documents).
If there is an error during data processing, CIC is responsible for correcting the error and notifying the customer of the results.
If the data at CIC is correct, CIC will request the credit institution to check and verify the information. After verifying the information, the credit institution sends a specific written response to CIC and proposes to adjust the data (if necessary). CIC will base on the feedback from the credit institution to process and notify the results to customers.
All customer information at CIC is updated/stored honestly and objectively according to the information reported by credit institutions. CIC or any organization/individual is not allowed to arbitrarily adjust this information. Any advertising about bad debt relief services is a scam.
Credit information can only be corrected if errors are recorded due to operational errors and must comply with a strict verification and testing process.
CIC provides the following product groups and reports to credit institutions:
Group of customer credit information products: Credit relationship information products (R10A, R11A, S10A, S11A); loan security information products (R20, R21); credit card holder information products (R14); Instant alert (S37).
Group of scoring and credit rating products: Borrower credit scoring products (S40); corporate credit rating products (XH50); credit rating products for groups and corporations (XH51); industry average index product (XH53).
Business information reporting product group: Foreign enterprise information report (S70).
Group of warning products and services by user: Warning for group of credit institution branches (S33 - for credit institution headquarters); warn customer groups of legal entities and natural persons (S34, S35); Warn customer groups of credit institution branches that have bad debts at other credit institution branches (S36); Customers who have debts that need attention during the period (S39); Exploit loan demand on the borrower connection portal.
Group of products provided by CIC upon request: Depending on the information needs of credit institutions, CIC provides products to serve different purposes of the unit such as customer search, customer evaluation portfolio management, risk management. risk, model building, scorecard...
Forms of exploiting credit information for credit institutions through two main channels:
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Form 1: CIC provides all products in the product catalog through two websites: cic.org.vn and cic.gov.vn.
Form 2: Through the direct connection channel H2H, only providing a part of products in CIC's existing product portfolio (ready-made products, some on-demand products...).
In some special cases (large data packages, units requesting to receive data via text...), CIC can provide via storage devices or documents.
Credit institution units including: Head office, branches, transaction offices (authorized by the branch) can directly sign credit information service contracts with CIC to exploit products. The contracting unit proactively manages staff and registers additional/changes according to actual needs.
For each service contract, credit institutions can only register 01 payment user, the unit uses this user to log in; Proactively compare exploitation data, print payment notices and value-added invoices for used services.
CIC only provides products and services to legal entities that have signed information exploitation contracts with CIC. Accordingly, units outside credit institutions that want to exploit information about partners need to provide a commitment from the information subject allowing the unit to exploit the subject's information in CIC's data warehouse.
For individual customers, CIC provides credit reports about the customers themselves (K11 - Credit information product for individual borrowers).
To look up their credit information, customers need to register for an account by downloading the iCIC/CIC Credit Connect (CICB) application on their smartphone or visiting CIC's website.
When granted an account (successfully registered), customers have the right to: Access their credit report for free once a year; Search for information about loan/credit card products of local credit institutions posted on CIC's borrower connection portal; Register your loan/card opening needs with credit institutions, be connected, consulted by credit institutions, choose loan packages suitable to your needs, save travel costs and time when using banking services. banks, thereby accessing bank loans more easily and quickly; Receive explanation/advice from CIC on how to improve your credit score and resolve electronic complaints related to your credit information; have access to an effective financial consulting channel, contributing to raising awareness in controlling and securing personal credit information.
Customers are obliged to provide accurate and complete information when registering an account. Each customer can only register one account with one phone number (for individuals) or one business code. In addition, CIC also provides reports in packages to serve borrowers who need to look up information multiple times a year, helping customers save costs and be more convenient in the exploitation process.
CIC has a discount policy for units that ask for information in large quantities/multiple times. Specifically, CIC is currently applying a tiered selling price policy for credit institutions that look up large quantities on a monthly basis or each time they use large quantities to inquire about products upon request. In addition, CIC applies discount factors to model building data packages.
The user does not have to pay any fees related to contract maintenance and account administration. CIC only collects fees on the response to the message containing credit information successfully provided by CIC to the unit.
CIC always publicly discloses price policies on products and services provided by CIC to reporting entities. User units can proactively access CIC's website to update the latest product and service price policies being applied.
On December 30, 2022, the General Director of CIC issued Decision No. 269/QD-TTTD regulating the prices of CIC's credit information service products. Accordingly, CIC continues to maintain preferential policies for people's credit funds, microfinance institutions and for the Social Policy Bank and Cooperative Bank by 20% and 50% respectively. compared to the corresponding product price provided to credit institutions. In particular, credit institutions honored as excellent units of the year will enjoy a 2% discount on the total amount exploited in the following year; Credit institutions honored as outstanding units of the year are entitled to a corresponding 1% discount.
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