The number of Finns in default continues to fall gradually
There are now 3,000 fewer people with payment defaults than a year ago, 388,600 in total. The number of consumers in the worst payment difficulties began to decline in early 2021 and the trend has been downward since then. The peak was reached at the end of 2020, when 392,200 people were in default.
“There are still a lot of people in default, but luckily it seems the trend is moving in the right direction. The full use of positive credit information in credit decisions and the upcoming shortening of deadlines for recording delinquency entries should reinforce the downward trend,” said the communications manager. City Kauppi from Asiakastieto.
Find out more: STATISTICS
Debt is always worth paying
Parliament is currently considering an amendment to the Credit Information Act which would abolish registration for default of payment one month after the person has paid the debt on which the registration is based.
There are currently approximately 10,000 people in Asiakastieto’s registry whose debts at all default entries have been paid. Their entries will be deleted at the latest when the corresponding amendment to the Credit Information Act comes into force.
“It is always worth repaying a debt, even if it has already caused a default. Hopefully, the change in the law will encourage consumers who are having difficulty paying to take care of things even more and restore their own solvency with their own business,” says Ville Kauppi.
Positive credit information already actively used
Asiakastieto continuously models the factors affecting an individual’s and a company’s credit risk from large datasets. A statistical study shows that the credit risk of a consumer in default remains above average, even if the entry is several years old or the debt has been paid.
Checking for default entries is only part of the credit decision. A responsible creditor makes decisions about consumers based on as much information as possible. Important information about the consumer’s situation is provided by the so-called positive credit information.
“Positive Credit Information: Information about the loan applicant’s existing loans, their purpose, remaining principal, installments, and any late payments associated with the loans. With this information, a responsible lender can ensure that the applicant’s creditworthiness is sufficient to pay for a new loan,” says the development manager. Johanna Kurika.
Asiakastieto’s positive credit information service is currently used by approximately 40 banks and consumer finance companies, who use this information to make more than 500,000 sustainable credit decisions each month. The register of positive credit information maintained by the tax administration should be operational in 2024.
We are constantly exploring opportunities to further expand the informative content of our positive credit information service. The data from the new register of authorities is also an opportunity to develop our service. Our core competency is to collect data from several different sources and format it into services that make it easier for our customers to use,” says Johanna Kurikka.
Learn more about positive credit information