Thailand needs credit-score system as millions blacklisted for loans: Korn

Korn instead proposed a “credit score” system that takes into account loan applicants’ incomes and daily spending.

The former finance minister said new loan criteria are needed because millions of Thais had been blacklisted by the bureau for being unable to make debt repayments amid the pandemic and cost-of-living crisis.

Although financial institutions claimed the blacklist was not a major factor in their loan decisions, in reality almost all blacklisted debtors were unable to borrow from legal lenders, he added.

Korn said the credit bureau has begun collecting credit-score data but financial institutions still prefer the blacklist when considering loan requests.

Korn explained that the credit score measures repayment ability and is partly derived from debt-payment records. It also includes data on paying other bills, such as mobile phone, Internet, water and power bills.

The credit score system should also include data on debtors’ incomes and expenses, Korn added. For example, a Grab Food rider who works 10 hours per day every day should receive a higher credit score to reflect his/her diligence in seeking income.

He said the major obstacle to creating a comprehensive credit score system is that most relevant data are in the hands of state enterprises and private companies.

As such, the next government should grant access to these data sets to allow the credit bureau to create a more effective credit score system.

Korn said his credit score idea has captured the attention of financial companies as a fairer system for customers to access loans.

He said his Chart Pattanakla Party would propose the credit score system as a core policy in its election campaign.