The Enforcement Authority is the only organization in Sweden empowered to withdraw money from bank accounts of debtors and, if necessary, visit the homes and companies of debtors to seize (distrain) property. The authority also has the right to withhold money directly from a debtor's income. It can collect debts for individuals and businesses as well for the government.
A person or organization whose debtor refuses to pay an outstanding debt can submit a claim to the Authority. This is forwarded to the debtor who must respond within 10 days. If there is no response and it there is proof that the claim has reached the recipient, the Authority can take possession of the debtor's money or property. If the debtor disputes a debt claim within 10 days, a court must decide whether the debt claim is correct. This is a fairly short time, and creditors are more impatient than in the past. Someone on a four-week vacation trip can discover upon their return, if they have forgotten to pay a bill, that the Enforcement Authority has withdrawn money from their bank account. There are special procedures for taxes because they must be paid by the due date even if the debtor considers them to be incorrect. The Authority will distrain the money, and if the tax claim is subsequently determined to be incorrect, the money will be refunded. The Authority allows a debtor to keep those necessities required to support themselves and any dependents. A debtor's home can be sold by the Authority.
All debtors are recorded in the Authority's public register and remain there until three years after the debt has been paid. This makes it extremely difficult for the debtor to get any credit in that period. In many cases it will also, during this period, prevent the debtor from doing things that require economic creditworthiness, such as renting an apartment or subscribing to services.
In countries where there is no public debt collection authority and where distraint authorities only become active when they receive a court order, anyone trying to collect money owed to them needs to perform the legal process themselves or use a private debt collection agency. Use of the services of the Swedish Enforcement Authority is considered complicated, so most companies use private debt collection agencies for the process in Sweden too.
A credit score is a numerical expression based on a level analysis of a person's credit files, to represent the creditworthiness of an individual. A credit score is primarily based on a credit report, information typically sourced from credit bureaus.
Lenders, such as banks and credit card companies, use credit scores to evaluate the potential risk posed by lending money to consumers and to mitigate losses due to bad debt. Lenders use credit scores to determine who qualifies for a loan, at what interest rate, and what credit limits. Lenders also use credit scores to determine which customers are likely to bring in the most revenue. The use of credit or identity scoring prior to authorizing access or granting credit is an implementation of a trusted system.
Credit scoring is not limited to banks. Other organizations, such as mobile phone companies, insurance companies, landlords, and government departments employ the same techniques. Digital finance companies such as online lenders also use alternative data sources to calculate the creditworthiness of borrowers.Distraint
Distraint or distress is "the seizure of someone’s property in order to obtain payment of rent or other money owed", especially in common law countries. Distraint is the act or process "whereby a person (the distrainor), traditionally even without prior court approval, seizes the personal property of another located upon the distrainor's land in satisfaction of a claim, as a pledge for performance of a duty, or in reparation of an injury." Distraint typically involves the seizure of goods (chattels) belonging to the tenant by the landlord to sell the goods for the payment of the rent. In the past, distress was often carried out without court approval. Today, some kind of court action is usually required,inappropriate tertiary source the main exception being certain tax authorities, such as HM Revenue and Customs in the United Kingdom and, in the United States, the Internal Revenue Service—agencies that retain the legal power to levy assets (by either seizure or distraint) without a court order.