A credit report is a service that various companies use to obtain financial information about individuals or companies. There are credit reporting companies that work to gather information about our financial situations and offer this information to those who are interested.
Companies can take credit information in your name when they want to make sure your finances are good. The times when this can be important are for example when you borrow money, when you want a mobile subscription or other type of ongoing service, when you want to obtain a rental right, when you want to buy on installment and so on. There are quite a few different occasions when it can be good to look up someone’s financial strength.
What information is available in a credit report?
What you can see in a credit report is financial information such as what you have for income, your existing debts (eg if you have loans or credits), assets to some extent and if you have payment notes or cases with Kronofogden. Anything that is public and that can contribute to a better idea of what your financial situation looks like in other words.
All this is good for forming a general idea of your financial strength and also to see if you meet the requirements that, for example, some lenders set for you to take out a loan. You often have to have a certain minimum annual income to be able to borrow and many lenders also say no directly if there are payment remarks. They can see directly through a credit report / credit check if you meet the requirements that exist.
Payment notes are also visible, as I said. A payment note is not something you get from Kronofogden, but it is actually something that the credit reporting companies have found and register for. They collect public information from the Crown Prosecutor’s Office on cases registered there and if your debt is established with them, this is intercepted by the credit reporting companies and a payment note is created.
Many credit checks can be bad
For example, banks use many different criteria to determine if you should get a loan. They look at your finances – eg your income, liabilities, assets. They check for active payment notes. They may also look into if there have been many credit checks in your name lately. If so, this could be the evidence that either you have applied for many different loans / credits etc quite recently or it can show that many companies have been uncertain about your financial strength.
It is considered a negative thing to have many credit information taken in their name, which is why one should be careful to apply for many different loans at once. A lender can become suspicious and skeptical if many people have been interested in your finances for an overly short period.
The banks’ credit information companies
GF stands for Good Finance and is a company owned by the major banks the principal owners are jointly. It is a company that they use just to gather information about the financial strength of people. It is Sweden’s largest credit reporting company and they have many customers who want to collect financial information about individuals and companies.
Nowadays, it is not uncommon for many lenders to market that they “do not use GF”. The reason why they do so is precisely because, as we said above, it can be considered something negative to have many credit tests done over a shorter period of time. If you have applied for a loan or wanted credit etc with companies that use GF, everyone else who also uses GF can also see this.
This can in turn have a negative impact on your loan application or whatever it is that you are trying to do. The lenders who do not use GF instead turn to another credit reporting company. It’s not that they fail to check up on your finances – they just choose another provider of that service. The advantage to you is that all those who hire GF will not then see that someone has done a credit check in your name, and you do not have to risk that this affects their decision.