The Positive credit register has now been in use for a year. It is, however, hardly worthy of any praise. The credit register places citizens in an unequal position, and it is high time that the problems related to its operation were remedied.
When the Positive credit register opened a year ago, there was anticipation that it would facilitate transactions and prevent over-indebtedness:
‘When a person applies for a new loan, lenders such as banks will check the register for that person’s loan status and will, thus, be able to more easily assess their ability to pay. The aim of the register is to prevent over-indebtedness and provide lenders with more up-to-date information to support their credit decision.’ (Media release on the opening of the Positive credit register – in Finnish 1 April 2024.)
That sounds great, except that the register was a dud already from the start. The only data transferred to the Positive credit register includes salaries and benefits. Thus, for example, earnings received as a grant or entrepreneurial income are not transferred to the Positive credit register. At least 7,000 individuals are working by virtue of grant funding each year and there are currently more than 250,000 entrepreneurs in Finland. Therefore, this is not a small or marginal group within our society.
It is very problematic when information systems of social importance are created and implemented in a way that is inadequate to this extent. As we said in the Yle article last autumn, different forms of work and the so-called transformation of work must be taken into account comprehensively in the structures of society and in the creation of key information systems. The Positive credit register does not do this, but, rather, puts citizens in an unequal position and makes them appear to not be creditworthy, even if they have regular income. For example, awarded grant funding must be reported to the tax authorities, so why can’t they be included as income in the Incomes Register and Positive credit register? It likely would require system development, but could certainly be done.
The attitude of both politicians and the authorities towards the problem has, to be honest, been demeaning. This is evident, for example, in the following statement:
‘It is unfortunate that access to credit, especially for self-employed persons working under a business name and grant recipients, has been made more difficult because not all income is visible in the credit register extract. We understand the inconvenience this has caused and we regret the situation. Only income that has been reported to the Incomes Register can be shown in the credit register extract. As data controller, we will continue to emphasise in our stakeholder events and communications that the Positive credit register does not always give a complete picture of a customer’s income. We encourage lenders to use sources other than the credit register extract to assess a customer’s creditworthiness and especially income data.’ (Positive credit register 25 November 2024.)
It’s a nice idea but does not correspond to the reality in which information systems and decision-making are increasingly handled by automation. If, for example, a person is only able to apply for a credit card through an online service or the approval of partial payments in an online shop is decided on by an Internet bot, how are they expected to provide additional income information?
The Positive credit register turned one on 1 April, however, congratulations are not in order. We call on politicians and the authorities to address this genuine problem and to update the Positive credit register to include information on various types of income. It is quite normal for a new system to require updates and fine-tuning, even after it has been taken into use.
At the end of last year, Minister of Justice Leena Meri stated that any possible system development could only be carried out after the ex post evaluation of the Act on the Positive credit register. The evaluation is expected to be carried out within four years of the introduction of the register. We appeal for an ex post evaluation of the Act to be carried out without delay, as the problems are obvious and significant.
Until changes have taken place, we advise our members who are working as grant researchers and entrepreneurs to handle their transactions with a person rather than an electronic system whenever possible. This makes it possible to provide additional information on income for the purpose of consideration in lending and loan decisions. With regard to banks, this should still be quite possible, but, for example, when dealing with online businesses, the situation is more difficult if the system relies solely on automation.
Miia Ijäs-Idrobo
Senior Adviser, Union of Research Professionals