In early 2019, Norwegian Finance Minister Siv Jensen significantly tightened the requirements for those banks that offer consumer credit. The amendments mainly concern the rules for examining applications. A new m.in. debt register (Norwegian: Gjeldregister), which provides much more information about debts than those presented so far in skattemelding.

Consumer credit – debt up to 5 times income

Under the new rules, the overriding condition for granting a consumer credit is the theoretical possibility of repaying it within 5 years. This does not mean in practice that the longest funding period will be 5 years. However, these rules state explicitly: Your largest debt cannot exceed 5 times your annual income.

Debt Register – Gjeldregister from 1. July 2019

The changes also created the Norwegian Debt Register, whichhas been in place since 1. July 2019. It does not provide access to detailed information about the debt, but it contains a complete list of all borrowings and credit cards held. This change has a particular impact on the development of creditworthiness.

The bank has more information

Until now, the bank has only become known about your debt on the basis of the skattemeldingthat you submitted with the application. This solution was very difficult because it provided the bank with information only about the amount of debt you had at the end of last tax year. However, there were no mentions of the loans and other financial commitments you made in the year of application. So you could easily manipulate this information, showing more creditworthiness than you actually had.

Gjeldregister Daily Updates

After changes of this type, manipulations will not be possible. First of all, because the Debt Register is updated daily. What’s more, information about even credit cards already repaid or consumer loans is there until a new skattemelding is issued. Although the balance will be zero in this case, there will be information about the interest paid on the loan, which entitles you to a tax refund.

Consumer credit under the new rules

The changes have a significant impact on the possibility of receiving a consumer credit. Mainly due to the fact that your creditworthiness is likely to decrease. Firstly, because from the beginning of 2019, the amount of all liabilities can not exceed 5 times your annual income. Secondly, because even an unused credit card limit appears in Gjeldregister as debt, which obviously reduces creditworthiness.

Therefore, if you want to apply for a consumer credit under the new rules, you should verify your actual debt. First of all, pay attention to what limit you have set on your debit card. If you don’t use it in its entirety, contact your bank and reduce it. This will increase your creditworthiness. At the same time, we encourage you to contact us. We will analyze your situation carefully and help you get a consumer credit.

The changes to the law are temporary

You should be aware of the fact that the changes made to consumer credit rules are temporary. They are only expected to apply until the end of 2020. The aim was to reduce the risk to the Norwegian economy. This intention stemmed directly from historically high household debt. It is not yet known what rules will apply after 2020.