It is possible to give a general answer to the question that we ask in the heading and that is that loans without UC on average are more expensive. However, this is not a rule fixed in stone. Every lender has complete freedom in pricing, within the framework of the law, that is.
What then is the reason why a loan without UC is normally a more expensive loan than one where the Information Center is connected as a supplier of credit information? There are, in simplified terms, three things:
1. Not using UC poses a slightly increased risk to the lender
2. The lender has the opportunity to hold slightly higher rates for the “benefit” that a loan without UC can mean.
3. The loans are often addressed to those with payment remarks.
Lower risk with UC
In Sweden, there are currently five credit reporting companies that are considered comprehensive. These five have all personal and credit information about all Swedes who are 16 years and older. Regarding personal information, there are no differences between them, but in the matter of credit information, Upplysningscentralen AB has more extensive information on, among other things, the number of active and dormant credits, credit limits and what the credits follow. The reason for this difference is that UC has the most customers, which over time allows the company to collect more information than the other four credit reporting companies in the quintet.
A lender who has complete information about potential borrowers’ credit can do a more accurate credit check and thus reduce the risk in their lending. Lower risk is synonymous with an opportunity to offer lower interest rates, and vice versa then applies to higher risk.
The advantage of avoiding the Information Center
Some borrowers can see the benefits of avoiding UC being included in the credit check. The reason is that anyone at UC has a slightly worse credit history with, for example, many credit issues regarding consumer credit, may want to avoid deteriorating creditworthiness. There is not a direct correlation between, for example, a further credit issue and a drastically degraded credit rating, but many consumer credit issues are never an advantage. If a credit report is made via, for example, Pisnode or Syrna, this will not be visible in information obtained from UC, and this is an advantage that some lenders can take advantage of to charge a slightly higher cost.
Borrow without uc with payment note
Lenders who use UC for credit information will in principle never accept payment remarks. They generally also place higher demands on both creditworthiness and ability to pay than other lenders do. However, lenders using credit reporting companies other than UC do not normally have the same requirements, either in terms of payment remarks or the current economy of the borrower in general. In short, a lender who turns to Borrowers Choice, for example, is more likely to lend to people with a slightly worse economy.
A poorer economy with or without payment notes gives higher risk to the lender, which means that the price of the loan will be higher.