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How personal finance can affect work and housing in Finland

Maintaining good credit is crucial for individuals residing in Finland. You must pay your bills on time, avoid excessive borrowing, and live within your means. Your credit behavior significantly impacts various areas such as loan procedures, credit authorization, phone and subscription plans, property purchases, and apartment renting. It also affects your employment prospects, mainly if your job involves handling finances, such as a cashier in a grocery store or an office worker, or if you're planning to start your own business. 

Good credit is an ongoing process. Budget your monthly earnings and expenses over a yearly period. Disclose monthly expenses such as rent, phone bills, car deposits, or public transport costs. Include insurance costs, tax payables, and unexpected expenses like medical bills in your budget to estimate how much you need to earn, spend, and save. 

It is essential to pay your bills on time in Finland. This means paying the bills by the due date at the latest. If you pay your bills after the due date, you will be charged interest and office fees. If you cannot pay the bills on time, it is recommended that you contact the creditor and negotiate. Learning to pay your bills on the due date will help you avoid unnecessary fees and also help you organize your finances and earnings.

Making wise financial decisions can help you avoid falling into debt. When making purchases, pay attention to the interest rate attached to the credit you use. Whenever possible, avoid using credit altogether. If you must use credit, avoid fast credit options with exorbitant interest rates.

To safeguard your name and security, knowing how to say "no" to friends and family who ask to borrow money or use your name as a guarantor is essential. However, if you decide to lend money, it's crucial to create a written contract outlining the loan terms, including its due date. This way, you'll have a clear record of the agreement and can hold the borrower responsible for repaying the loan.

Avoid getting a payment default entry (Maksuhäiriömerkintä). A payment default entry is recorded in an individual's credit information register, which details individuals' and businesses' financial stability and creditworthiness. Receiving a payment default notice can significantly impact a person's ability to obtain credit or rent accommodations. Typically, such notices are issued when agreements like loan repayments, rent payments, or other invoices have not been fulfilled. This often occurs when payments have been outstanding for an extended period, prompting creditors to take collection actions and add a default note to the individual's credit history.

Checking your credit entry is essential. Dun & Bradstreet and Suomen Asiakastieto Oy collect comprehensive credit information registers of Finnish companies and households. These companies offer a free personal credit check, which you can do once a year. 

Fix your outstanding debt by making a payment plan. In early 2022, Finland introduced new legislation concerning payment default notations, resulting in notable adjustments to credit information handling and access. The law is designed to ease the financial strain on individuals in challenging situations while also protecting creditors' rights. This recent law accelerates the removal of default records from credit information databases within one month of clearing the outstanding debt.

Having good credit has many benefits. Creditworthiness is an important factor that indicates whether a loan applicant can manage their financial obligations responsibly and efficiently. Financial institutions and other stakeholders use it to evaluate the risks associated with loan approval. By examining the credit details of an individual, it is possible to determine how responsibly they have managed their past financial responsibilities, such as loans and bills. Maintaining a good credit score has several benefits, including improving loan conditions, reducing interest rates, simplifying renting accommodations or securing loans, and acquiring subscriptions.


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