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Loans and paying in installments

I don´t get it

MissKD
post 22.Jan.2013, 10:50 AM
Post #1
Joined: 4.May.2012

Hello!

I have been living in Sweden now for one year and 3 months. I have a permanent job in a global company and I own a house. I have no loan on me, or on the house but on Sunday I got refused the payment in installments for a couch (total price 10000 SEK). I was speechless.

One of the sellers at the furniture store made me speak on the phone with a woman that checked my credit and said that I cannot pay this way because my credit situation looks bad. I argued with her for 5 minutes asking why, since I did not take any loan (neither in Italy nor here in Sweden) and I do not have a mortgage. She explained that I have not been living here long enough (1 year and 3 months of work is not enough for 10,000 SEK????) and that I have credit requests on my profile. Then I remembered that a couple of months ago I wanted to get a loan (200,000 SEK), so I sent a request to Lendo and to my bank (Swedbank). Both answered positively, but in the end I decided not to take any loan, and to save the money instead. I thought that since I did not take any loan this request would not show anywhere, but instead she told me that all the requests are saved on a database and if you have many requests it will be hard for you to pay something in installments or get a loan. Too many requests = bad credit.

How totally stupid is that?

In addition to this, she explained that everytime I pay something based on a 30-day invoice I also get registered there. This is because every company issuing an invoice will check your credit profile in this database (I received a confirmation by post every time).
In 2012 I did major works to the house (drainage + Isodrän isolation, very good fence for the garden, replaced the heating system), and of course I received an invoice for each one of them, for a total of around 290,000 SEK. However, I had the cash for all this but the standard way to pay was at 30 days.

The suggestion of the woman I spoke to:
- do not pay anything with 30-day invoice for at least 6 months (no matter the amount. Even a book for 200 SEK is not ok)
- do not ask for any information/send any request on loans for at least 6 months
- do not ask to pay anything in installments for at least 6 months

I never had this kind of problem in Italy, but maybe in other countries is the same? Have you ever had a similar experience?
Do you think that after my tax declaration for the year 2012 (full year for the first time since I moved) the situation will change?
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John.Smith
post 22.Jan.2013, 10:58 AM
Post #2
Location: Sweden
Joined: 12.Sep.2011

30 day invoice is pretty standard here and hard to escape. For example your electricty bill, phone bill etc will all be 30 day be default.

I am not sure why this would affect your credit? Surely showing that you successfully pay your bills on time is a positive thing for your credit history. My guess is that you simply do not have enough credit history, i.e. no active loans that you are paying off and thus this is why your account (credit) looks 'funny'...

I would consider getting a short loan for 3 months and pay it back just to build up some history on your record.

No Loans does not mean you have a 'good' credit history. It just means you have NO credit history smile.gif
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MissKD
post 22.Jan.2013, 11:08 AM
Post #3
Joined: 4.May.2012

I have my electricity bill, water bill, garbage, house insurance, car insurance, dog insurance... isn´t that enough to show that I pay everything on time?
Also, I thought that the credit database was European, so if I am coming from a country inside the EU they should know if I had problems paying there or not. i took a small loan when I was studying (1500 euro) and I paid it back in 18 months, plus I had a credit card as well.

I thought about taking a small loan, but Swedbank does not give me a loan for less than 200,000 SEK (I would use the existing pantbrev on my house) and with Lendo the interest rate on small loans is really high. Also, they consider me as "risky" because I have not been in Sweden long enough. The last time I spoke to them for 40000 SEk they offered 17%!!!!!!!
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byke
post 22.Jan.2013, 11:29 AM
Post #4
Location: Europe
Joined: 28.Oct.2008

You have to remember that while everything looks pretty on the outside, Sweden is actually a fairly poor country. Offset by dangerously high personal loans in a way that often portrays it in a way that is very far from the truth.

Simply put, loans for 10k for hire purchase of a sofa which would equate to something in equivalent to a DFS sofa in the UK - is just too much money for many firms to risk in Sweden.
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Essingen
post 22.Jan.2013, 12:05 PM
Post #5
Joined: 2.Nov.2008

Everyone in Sweden uses UC...why not go in a see your own credit rating....

https://www.minuc.se/minUC/tjanster/min-upplysning.html
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Bender B Rodriquez
post 22.Jan.2013, 12:21 PM
Post #6
Joined: 25.Mar.2006

A credit report in Sweden only shows your salary income, your capital gains/losses, if you have a history of defaulting on payments, and how many credit reports have been sent out this year. The two first items comes from the publicly available part of the tax declaration, so you have to have paid tax in Sweden for it to show. Any loans/assets or paid bills will not show up in the report since this is not publicly available information. There is no EU-wide credit database.
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Solith
post 22.Jan.2013, 12:37 PM
Post #7
Location: Uppsala
Joined: 9.Jul.2006

Same for me. I was told I had to prove I'd been resident here for 3 years to buy a sofa and pay the next month. Another place demanded my passport so they could check my credit rating, despite me holding a mortgage with the same bank through which the sofa company arranged their financing.

Needless to say, I waited until I'd saved the money and paid cash with a different company. Absolutely stupid rules.

I applied for a loan with my old bank (I had at the time been with them for 18 months, with 18 salary payments and numerous bills paid on time) which was for less than my monthly salary and they turned me down because I had not been here for 3 years.
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John.Smith
post 22.Jan.2013, 12:43 PM
Post #8
Location: Sweden
Joined: 12.Sep.2011

Wow! I had no such issues when I moved here. I was asked for a letter from my employer stating I was in full time employment and that was it.

Maybe things have changed in the past 5-6 years?? Also, No there is no EU-wide credit database.
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Yorkshireman
post 22.Jan.2013, 01:27 PM
Post #9
Joined: 22.Nov.2011

It seems to go back and forth ...in the early 90's I was told that You had to be 3 years here employed before you could get a mortgage, then from what posters have been saying earlier, during the last few years the rules seemed to have laxed a bit ...but maybe now with the building debt and slipping economies, maybe they bring back the rule?

Invoices that are 30 days should have no impact on Your credit rating, they are not credit!... only if they are late and go for collection should it be visible on your rating. However, if the company did a credit check beforehand, that check will be listed on the credit report... What they are looking at is your income, and ability to pay back (ie. do you have other credit facilities that you have used).

Asking multiple different places for credit, whether used or not, can have a negative impact on your rating as it tends to imply that You were rejected for some reason and needed to try again and again, or that since you need to ask for credit often within reasonably short time, that you have limited cashflow surplus which could impact your ability to repay.

You could always ask the bank for an overdraft facility on your salary account, say 10.000 wink.gif then just utilise that if they say OK.
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Pursuivant
post 22.Jan.2013, 03:52 PM
Post #10
Joined: 12.Aug.2008

Take the loan from the Swedbank, pay it back nicely, when you have a loan you're a much better credit rating than if you have none. At least they are willing to give you one.

If that sounds stupid in Sweden try the UK...
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Bender B Rodriquez
post 22.Jan.2013, 06:01 PM
Post #11
Joined: 25.Mar.2006

Swedish credit rating does not show any loans you have taken.
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Willy
post 22.Jan.2013, 07:16 PM
Post #12
Joined: 10.Jul.2005

QUOTE (Pursuivant @ 22.Jan.2013, 03:52 PM) *
Take the loan from the Swedbank, pay it back nicely, when you have a loan you're a much better credit rating than if you have none. At least they are willing to give you one.

QUOTE (Bender B Rodriquez @ 22.Jan.2013, 06:01 PM) *
Swedish credit rating does not show any loans you have taken.

I believe it does show "beviljade krediter". However, taking a loan and paying it back just for show won't help you the slightest, to the contrary in fact. There are no credit scores in Sweden. But they do keep track of the number of credit reports taken. This can be held against you, which seems to be what happened to the OP.

OP, if you're short on cash, but your house is paid off, why don't you take out a small mortage on it instead of unsecured loans and installment payments that are likely to be more expensive?
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axiom
post 22.Jan.2013, 09:47 PM
Post #13
Location: Stockholm
Joined: 24.May.2011

I never had such problem, ever though I waited around six months after I moved here to get a debit card, etc had since had credit cards loans and mortgage approvals. Seems odd to me 10 000 is in reality not so much money compared to single month's salary.

Why not ask your bank for a credit card and use this for such purchases, makes much more sense than to keep getting your credit report scanned and recorded each time you want to buy something under say 20 000 on instalment.
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