The People's Bank of China (PBOC) just launched an updated version of its credit information system on Sunday. The central bank's new system contains detailed credit information of more than 1 billion individuals and around 28 million corporate entities. The PBOC rolled out the updated system to help lenders make better decisions when it comes to giving out loans.
Lenders to evaluate potential borrowers, giving them an indication of their creditworthiness, typically use data found in the credit information system. The state-run database, which was originally launched in 2006, contains accurate profiles of individuals and corporations, including their borrowing and payment histories.
According to the PBOC, the enhanced database will include a few upgrades to the way data has been gathered and how they are presented. This includes improvements in data gathering and processing functions as well as a user-friendlier technical framework. The PBOC also enhanced the databases' security, making it much more secure from outside attacks and hacking attempts.
The PBOC's credit database is part of China's wider national financial infrastructure project aimed at transforming the country into a comprehensive credit society.
The PBOC stated that reports generated by its enhanced system would now include deeper information on an individual or a company. This will include in-depth information such as the individual's spouse, current and previous employment status, existing financial guarantors, active installment plan, and full credit card records.
Apart from the new details, the PBOC revealed plans to add even more information into future versions of the credit information system. The bank stated that it would soon be adding credit information on collective debts and even utility payment records. This means that lenders will soon be able to know whether an individual was able to pay his or her gas, electric, and water bills in a timely manner over the past few years. The PBOC added that it would also soon be extended the coverage of the financial records from two years to five years.
The PBOC's credit information system is different from the credit record system run by the National Development and Reform Commission (NDRC). The PBOC's system is primarily used in assessing credit and loan applications along with determining proper pricing and charges.
Meanwhile, the NDRC's system has been the center of a lot of controversies given how it essentially blacklists individuals with bad credit histories. In 2018, millions of people were placed on the NDRC's online credit blacklist, effectively barring them from purchasing certain items and services such as plane tickets.
