Abridged English version of the SCHUFA Credit Compass 2008

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Debt Compass | A | Sub-Analysis A-1 | Introduction 20 Introduction Over-indebtedness research in Germany lacks national, representative data acquisition to cover private debt and over-indebtedness. Because regular and full collection is impossible, the findings that have so far been obtained in Germany result from a variety of diverse data sources and research approaches. In parts only based on data from debt counsellors or debt collection bureaus, they merely reflect a section of private situations of over-indebtedness. Moreover, statements on over-indebtedness of private households have so far only been possible based on projections. As a result, the figures on over-indebtedness partly vary and give rise to different interpretations. That is why SCHUFA, with a representative data portfolio of around 65 million adult individuals and 433 data sets of credit relevant information, makes a singular contribution to the current reporting on private over-indebtedness in Germany. Analyses based on individuals: important supplement to over-indebtedness research While the public discussion about private over-indebtedness primarily focuses on private households, SCHUFA’s analyses place the emphasis on trends in critical debt situations of adult individuals. The focus on private individuals is important as the percentage of single-person households is relatively high at around 38 percent and continually increases. In addition, any private individual with critical debt carries this financial burden into a multipleperson household. It is all the more important to be able to present a picture of the debt trends of private individuals. The data portfolio used to calculate the analyses is nearly a full collection. Statements on over-indebtedness of private households, however, have so far only been possible based on projections. Over-indebtedness situations are caused by a combination of numerous factors. Companies connected to SCHUFA report extra-judicial defaults of financial, commodity or service credits. These defaults can be interpreted and analysed as so called “soft” early warning indicators for the danger of over-indebtedness. Moreover, SCHUFA receives judicial information on such kinds of default as presented by an oath of disclosure or the initiation of personal insolvency proceedings. But these “hard“ indicators are just the ending of the process leading to over-indebtedness. So it is all the more important to develop instruments for showing reliably the first indicators of a critical financial situation of the population. Trends in private debt and the dynamics of over-indebtedness In the following chapters, SCHUFA introduces its current empirical results on the indicators for private debt and over-indebtedness. Divided according to age group, county and federal state, the SCHUFA data allows for statistical evaluations about the amount as well as the default of consumer credits. As it is primarily banks that are the creditors of over-indebted persons, and consumer credits have a higher default risk, monitoring consumer credits is an interesting issue for the over-indebtedness research.
Debt Compass | A | Sub-Analysis A-1 | Introduction The so-called risk model allows for the examination of the mobility of over-indebtedness based on SCHUFA’s data portfolio. It addresses the question whether critical situations of over-indebtedness become more strained over a period of five years or whether there are ways away from the risk of over-indebtedness or actual over-indebtedness. Forecast of the Private Debt Index (PDI) In view of the wealth of differing information on the nature of private debt and over-indebtedness in Germany, the PDI is an important barometer on the over-indebtedness situation or overindebtedness risk of private individuals in the German regions. A forecast of the PDI for the end of 2009 is singular in the monitoring of private debt and overindebtedness trends. Not only does the PDI show the extent to which critical indicators of private debts have increased or decreased in the various regions or counties in Germany in the current period until the first half of 2008. In addition, the PDI forecast provides information on the future development of critical indicators of private over-indebtedness. The sub-analyses A-1 (Trends in private debt) and A-2 (Private Debt Index) are based on SCHUFA’s full data portfolio as of the reporting dates December 31, 2007 and June 30, 2008. This data was rendered anonymous and exclusively evaluated for the 2008 Debt Compass. 21
Page 1 and 2: Debt Compass Empirical Indicators o
Page 3: Contents Debt Compass | Contents Fo
Page 7 and 8: Foreword Dear reader, Debt Compass
Page 9 and 10: Core Findings Debt Compass | Overvi
Page 11 and 12: Core Findings Debt Compass | Overvi
Page 13 and 14: 2003 Debt Compass Debt Compass | Re
Page 15 and 16: 2005 Debt Compass Schulden-Kompass
Page 17: 2007 Debt Compass Debt Compass | Re
Page 22 and 23: Debt Compass | A | Basic Analysis A
Page 30 and 31: Debt Compass | A | Sub-Analysis A-1
Page 36 and 37: Schulden-Kompass | A | Teil-Analyse
Page 51 and 52: 1. Private Debt Index Debt Compass
Page 53 and 54: 2. Regional Evaluations Debt Compas
Page 55 and 56: i Reader help: The PDI describes th
Page 61 and 62: 3. Forecast 2009 Debt Compass | A |
Page 63 and 64: i Reader help: The map shows the pr
Page 65 and 66: Ranking: Private Debt Index (PDI) i
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Ranking: Private Debt Index (PDI) i
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Imprint Herausgeber: SCHUFA Holding
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Abridged English version of the SCHUFA Credit Compass 2008

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