2.45 Million Credit Defaulters

In spite of absolving 1.46 million credit defaulters from bad records last May, the number of individual credit defaulters increased 17.6 percent to 2.45 million at the end of the last year compared to a year earlier. Especially, there were 12,000 teenage defaulters, and 17.2 percent of total credit defaulters were young people under age thirty.

The Financial Supervisory Service declared on the 20th that 2.45 million defaulters, increased by 366,000 in 2001, were registered at the Korean Federation of Banks at the end of last year.

The rapid increase of credit defaulters resulted from the fact that the credit card

companies had issued cards to the unqualified, including teenagers and people who had no fixed income. Because the regulations of credit default registration were loosened since January of 2001, the credit companies could also blacklist the cardholders who had exceeded the payment due date by only three months regardless of the amount.

According to age, teenage defaulters increased by 400 percent from 3,000 at the end of January, 2000 to 12,000 at the end of last year, and defaulters in their twenties increased by 52.8 percent from 267,000 to 408,000.

72,000 (4.92 percent) credit holders out of 1,461,000, who were benefited by the measures for deleting the records on the credit default, were registered again as credit defaulters.

Byong-Ki Lee eye@donga.com