Employers usually ask job applicants to send resumes, testimonials and identification documents. But one more item could soon be added to the list of required materials: credit evaluation reports from authoritative personal credit information firms.

This week, Shanghai Credit Information Services Co Ltd (SCIS) launched such a service, offering consumers the chance to receive their own credit information reports upon supply of identity cards and payment of fees.

Among those who might be able to take advantage of the service are people with personal loans from branches of the 15 commercial banks, people with credit cards, or subscribers to China Unicom Shanghai Branch and Shanghai Mobile.

Social impact

Such reports affect people's ability to get personal loans, rent houses or apartments, get jobs and apply for business licences for their private enterprises.

Local citizens have responded enthusiastically to the SCIS initiative.

"I was worried about how much my credit would be downgraded after I delayed paying my mobile phone bills several times," said one Shanghai Mobile subscriber, surnamed Gao, who was recently considering taking out a mortgage on an apartment.

It is said that people who delay paying their phone bills might face a decrease of the ceiling amount of personal loans that commercial banks can allow them.

SCIS also said the information that they use would later be enlarged from information SCIS got from local commercial banks and mobile companies to that in larger areas, including records of payment for insurance, schooling, leasing and credit consumption.

"Even records of economic legal disputes can be tracked and used in credit evaluation," Chen Zhiguo, general manager of SCIS, told the Shanghai Star, China Daily sister newspaper.

Economic motive

People's Bank of China (PBOC) Shanghai Branch officials commented in one meeting that to allow individuals to get their own credit information is the first step in allowing non-banking sectors of society to get credit information from SCIS. This is very important for institutions in all fields of industry to develop their businesses, economists said.

"Lacking transparent social credit information has hindered the development of social consumption and the economy," said Lin Junyue, a researcher in the panel on establishing the country's credit information management system under the Chinese Academy of Social Sciences.

These obstacles are reflected in the sluggish usage of credit cards and credit consumption in China.

The lack of such a social credit information system makes it difficult for individuals and small and medium-sized enterprises (SMEs) to get loans, because banks lack confidence in their payback abilities.

Companies' ignorance of their trading partners' credit worthiness also causes non-performing debts among enterprises to increase.

So far, non-performing debts among State-owned enterprises (SOEs) in China have accumulated to over 1,600 billion yuan (US$193.24 billion), according to Southern Weekend.

Statistics from China Mobile and China Unicom show that so far the amount of unpaid mobile phone services has reached over 15 billion yuan (US$1.81 billion), which means that 5 per cent of mobile phone bills are unpaid.

Under such conditions, there has been a growing clamour for the establishment of organizations like a credit bureau of the type many foreign countries have.

Trial operation

Initiated by the Shanghai Branch of PBOC, SCIS was established on a trial basis for the establishment of a nationwide credit information system. At the beginning, it mainly collected individual credit information from local branches of 15 commercial banks in Shanghai. It used to be limited to providing information on individuals' credit worthiness to commercial banks only.

With the participation of the Shanghai Branch of China Unicom and Shanghai Mobile in the credit information service system SCIS started, the company is effecting a transition from a banking-service-only organization to a social credit information service organization.

PBOC officials said that after three to five years of a trial run in Shanghai, credit information services will be introduced to other parts of the country, contributing to the establishment of a nationwide credit rating system.

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