South Korea's internet banks see average credit score rise to 915, loan rates slip

In May 2024 the three major South Korean internet‑only banks—Kakao Bank, K‑Bank and Toss Bank—recorded a sharp increase in the average credit score of new borrowers, reaching 915 points, up 16 points from the previous month. Toss Bank posted the highest score at 930 points, while Kakao Bank's average jumped to 917 points, and K‑Bank fell slightly to 897 points.

The higher average creditworthiness coincided with a modest decline in the overall interest rate for new general‑credit loans, which fell 0.11 percentage points to 5.58% year‑on‑year. By contrast, borrowers with scores below 600 saw their average rate rise to 7.89%, up 0.29 percentage points, whereas the five major traditional banks lowered their rates for the same segment.

A Kakao Bank representative explained, "The rise in average credit score reflects increased loan demand from higher‑credit customers last month," and noted that the reported rates are averages of newly issued loans, not uniform rates for all borrowers.