4 ms·

All the sibling answers are pretty much spot on except for one thing: you're building your credit score; you're setting a track record for your ability to repay

All the sibling answers are pretty much spot on except for one thing: you're building your credit score; you're setting a track record for your ability to repay debt. Certainly, something similar exists in your neighborhood/region/country. Otherwise, how would anyone know that they'll ever get their money back from you? The major thing to note here in the US is there are three 'big' companies that track this information about individuals. And (now) there's a fairly standardized method for calculating your score, and that score affects A) whether you can borrow and B) the interest rate on the borrowed money.

Jolter 7y ago
There is no such system that I'm aware of here in Sweden, at least. If you defaulted on a loan payment before, and it was sent to a collection agency, that's tracked. But that's it.
- delinka 7y ago
  Tracked by whom? Sounds to me what you have is a system that assumes you'll be reliable and reports negatively when you're not. That's fine. But it's still a system that tracks that your ability to handle debt.
  - Jolter 7y ago
    Defaults are reported on request by the national debt collection authority.
    - kazen44 7y ago
      this system is nearly the same in the Netherlands.
- astura 7y ago
  That's still a credit tracking system, it just tracks negative activities instead of both negative and positive activities.
- fjsolwmv 7y ago
  And that's why credit is much harder to obtain in Sweden than in USA's more efficient system. https://en.m.wikipedia.org/wiki/Credit_score#Sweden https://en.m.wikipedia.org/wiki/Credit_score#Sweden
  - kazen44 7y ago
    mind you that, from my experience, Americans think a lot more casually about debt then most Europeans. They seem to want to avoid debt at all costs.
- kalleboo 7y ago
  Sweden also has something that the US doesn't have - open tax records. A creditor can look up exactly how much money a potential debtor made last year (according to their filed taxes) edit: also, at one point my credit report in Sweden actually DID show my credit card utilization. Never seen it since so maybe the regulations around it got tighter? Example: https://i.imgur.com/NGi86DJ.png https://i.imgur.com/NGi86DJ.png

Jolter 7y ago

There is no such system that I'm aware of here in Sweden, at least. If you defaulted on a loan payment before, and it was sent to a collection agency, that's tracked. But that's it.

delinka 7y ago
Tracked by whom? Sounds to me what you have is a system that assumes you'll be reliable and reports negatively when you're not. That's fine. But it's still a system that tracks that your ability to handle debt.
- Jolter 7y ago
  Defaults are reported on request by the national debt collection authority.
  - kazen44 7y ago
    this system is nearly the same in the Netherlands.
astura 7y ago
That's still a credit tracking system, it just tracks negative activities instead of both negative and positive activities.
fjsolwmv 7y ago
And that's why credit is much harder to obtain in Sweden than in USA's more efficient system. https://en.m.wikipedia.org/wiki/Credit_score#Sweden https://en.m.wikipedia.org/wiki/Credit_score#Sweden
- kazen44 7y ago
  mind you that, from my experience, Americans think a lot more casually about debt then most Europeans. They seem to want to avoid debt at all costs.
kalleboo 7y ago
Sweden also has something that the US doesn't have - open tax records. A creditor can look up exactly how much money a potential debtor made last year (according to their filed taxes) edit: also, at one point my credit report in Sweden actually DID show my credit card utilization. Never seen it since so maybe the regulations around it got tighter? Example: https://i.imgur.com/NGi86DJ.png https://i.imgur.com/NGi86DJ.png