People with bad credit histories could find it tougher to rent an apartment, install a telephone or even get a job in the near future as the Shanghai government pushes for expanded use of its burgeoning credit system.

The campaign will also make it more difficult for companies with spotty financial records to list on the stock market, issue bonds or get a loan.

The city government said yesterday that Shanghai will set up mature individual and corporate credit information systems and draw up related regulations over the next three year.

To date, the city's state-run credit agency, Shanghai Credit, has collected information on 3.25 million local residents and 590,000 enterprises.

"A sound social credit system can standardize market economy rules and prompt consumer lending," government spokesman Jiang Lan told reporters yesterday.

The system will make it easier for local residents and enterprises with clean credit records to get credit lines and loans while helping banks and other businesses reduce their risks, Jiang said.

"In most developed countries, people are required to submit their credit worthiness reports not only when they are applying for loans, but also when they rent houses, install telephones or buy insurance policies," said Shen Qiang, of the Agricultural Bank of China.

The government promises to lead the way by making more use of credit reports in its day-to-day operations.

The government hopes that credit reports will play an important role in government sourcing, land leasing, bidding for infrastructure projects and hiring government personnel.

The People's Bank of China now re-quires commercial lenders in the city to ask all loan and credit card applicants for credit reports to reduce risks.

The city government expects demand for credit reports and ratings to increase dramatically by 2008 with the continuous growth of the local economy.

The local government believes when a region's per-capita gross domestic product exceeds US$5,000, demand for credit products will soar.

By then, individuals registering for credit cards, buying insurance policies, applying for consumer loans and jobs will be requested to submit credit reports and similar requirements will be imposed on companies hoping to get listed, issue bonds and apply for loans as well.

Shanghai is the first city on China's mainland to set up an individual credit service and is pushing to change the way people think about credit as the country's market economy expands.

(Shanghai Daily July 31, 2003)