Short answer
A Latvian lender must evaluate whether a consumer is likely to perform the proposed credit obligations according to the agreement. Under Section 8 of the , the Consumer Rights Protection Law, that conclusion must rest on sufficient information about income and expenses and, where necessary, lawfully obtained database information about income and the performance of payment obligations.
Information supplied only by the consumer is enough only if it is sufficient and documented. Where it is not, the statutory system requires proportionate exchange through credit information bureaux about the consumer or guarantor, their obligations and how those obligations have been performed. The lender may also obtain specified income, pension, benefit and compensation information through a bureau under the statutory procedure.
The test is prospective and tied to the actual contract. A clean credit history does not prove that current income can cover current expenses plus the proposed payment. Conversely, an adverse historical record does not eliminate the need to assess present affordability, current status, dispute information and the proposed terms.
Consider enough reliable information before contracting
Section 8(4¹) sets both timing and evidence. The assessment must happen before the consumer credit agreement is concluded and must use sufficient information received from the consumer. Where necessary, it also uses information from lawfully established and accessed databases about the person's income and performance of payment obligations.
The operative rule begins:
Pirms patērētāja kreditēšanas līguma noslēgšanas kredīta devējs izvērtē patērētāja spēju atmaksāt kredītu, pamatojoties uz pietiekamu informāciju, kas saņemta no patērētāja.
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“Sufficient” is functional. The file must support a real judgment about performance under the proposed agreement. A completed application form is not enough if it omits a material expense, existing commitment or uncertainty needed to understand cash flow.
Evaluate income and expenses proportionately
Section 8(4⁴) requires the lender to request, obtain and evaluate information about the consumer's income and expenses “to an extent appropriate” for carrying out the duty. That language makes proportionality part of the information-gathering exercise. The evidence should be deep enough for the amount, term, payment pattern and risk of the proposed product without becoming unrelated or excessive collection.
The Act says:
Kredīta devējam ir pienākums pieprasīt, iegūt un izvērtēt informāciju par patērētāja ienākumiem un izdevumiem pienākuma izpildei atbilstošā apjomā.
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Income should therefore be considered with its reliability and period, not merely as a headline monthly number. Expenses should capture the commitments that affect the ability to make the proposed payments. The statute does not reduce the exercise to one universal ratio in this provision; the lender must connect the evidence to likely performance under the particular contract.
Do not rely on undocumented consumer statements where more is needed
The consumer must provide income and expense information when requested. The lender may rely only on information obtained from the consumer when it is both sufficient and supported by documents.
That rule does not mean every fact must always come from an external database. It means the lender has to evaluate whether the consumer's evidence is enough and documented for the decision. Where the application contains gaps, contradictions or unsupported material figures, the lender cannot treat self-reporting as conclusive merely because it is convenient.
Include existing obligations and payment performance
Past and existing commitments matter because they compete with the proposed payment. Section 8(4⁷) addresses cases in which the consumer's information is not sufficient and documented. Lenders must exchange, through credit information bureaux, information about the consumer or guarantor, their obligations and the course of performance, limited to an amount sufficient for the assessment.
Section 8(4⁸) requires the bureau contracted by the lender, acting on the lender's request and behalf, to obtain relevant information from the other credit information bureaux. This is designed to prevent an assessment from relying on one partial bureau view where other bureau databases contain relevant obligations.
The scope remains purpose-limited. A bureau search should be reliably matched to the correct person, use the lawful access route, and carry forward whether an entry is repaid, current, assigned or disputed. The number of negative entries is not a substitute for understanding their status and effect on present affordability.
Use official income and benefit information where appropriate
Section 8(5) allows the lender, through a credit information bureau and under the prescribed procedure, to obtain:
- a State Revenue Service statement about the consumer's or guarantor's income; and
- State Social Insurance Agency information about pensions, benefits and compensation paid to that person.
The implementing rules determine the content, period, request route and, for social-insurance information, service fee. These official data can corroborate income, but they still need temporal context. A historical tax period, a one-off benefit and stable prospective income are not interchangeable.
Reach a positive, contract-specific conclusion
The decision standard is not merely “no reason to refuse.” Section 8(4⁴) allows credit only after the lender has assessed repayment ability and the assessment indicates that the credit obligations are likely to be performed according to the agreement.
Kredīta devējs ir tiesīgs piešķirt kredītu tikai pēc tam, kad tas izvērtējis patērētāja spēju atmaksāt kredītu un izvērtējums liecina, ka kredīta saistības, visticamāk, tiks izpildītas saskaņā ar līguma noteikumiem.
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The proposed principal, term, interest, fees, payment frequency and repayment schedule therefore matter. The same consumer evidence can support one contract and fail to support a larger, shorter or more expensive one.
Reassess a substantial increase
An initial decision is not permanent. Before the parties agree to a substantial increase in the total credit during the agreement, Section 8(4²) requires the lender to update the financial information in its possession and reassess repayment ability. The relevant comparison is the consumer's current situation and the increased obligation, not only the original underwriting file.
This makes freshness a legal issue. A lender should record when income, expenses, obligations and database information were obtained and which version of the proposed payment schedule was assessed.
Explain database-based refusals and automated rejection
If database information is the basis for refusing credit or a substantial increase, the lender must promptly and free of charge inform the consumer of the database-use result and identify the database. If an application is rejected, Section 8(4⁴) also requires prompt notice and, where applicable, information that the decision-making process was automated.
These notices do not replace the assessment. They make the negative decision traceable and give the consumer a route to identify and challenge the influential data.
Preserve evidence because the lender may have to prove compliance
Section 8(4⁶) creates an important evidentiary consequence. In a dispute, the lender is presumed not to have complied with the duties in Section 8(4¹), (4²) and (4⁴) unless the lender proves otherwise.
A defensible file should therefore show:
- the consumer information requested and received;
- documents supporting material income and expenses;
- database and bureau sources, access basis and retrieval date;
- existing obligations and their performance or dispute status;
- the proposed contract assumptions and payment schedule;
- the reasoning connecting evidence to likely performance; and
- any refusal, database-use or automated-decision notice.
The law also limits certain interest and delay-related remedies when deficient assessment caused the consumer's delay, while leaving the principal repayable. Recordkeeping is therefore tied to substantive rights, not just internal audit practice.
Check whether a statutory exception applies
Section 8(4³) excludes specified products from several assessment duties—for example, certain one-month overdrafts, pawn-style credit limited to the pledged item, qualifying favorable employer loans, settlements and narrowly defined interest-free or short arrangements. The exact statutory elements must be satisfied. A product name such as “short-term” or “secured” is not enough.
Separate provisions impose loan-to-value or financed-price limits for certain large mortgage-secured credit and goods financing above EUR 1,400. Those caps are additional product rules. They do not replace the income, expense, obligation and likely-performance assessment where that assessment applies.
MCP source-quality finding
The production phrase search found 13 records. Standalone historical amendment laws ranked above the current consolidated base law, but Search clearly marked them AMENDMENT and marked the current Consumer Rights Protection Law BASE; the correct current source was recoverable on the first page. Targeted Fetch returned the complete Section 8 assessment cluster without truncation. No new issue was filed.
Structural Latvian section retrieval remains unavailable and is tracked in . For this question, source-language lexical Fetch provided the necessary current text.
Conclusion
A Latvian lender must consider sufficient, documented and proportionate evidence of income and expenses; existing obligations and payment performance where needed; reliable official or bureau information; and the actual proposed contract terms. Credit may be granted only when that evidence supports likely performance under the agreement. The lender must update the assessment for a substantial increase, explain specified database-based or automated refusals, respect product-specific exceptions, and preserve enough evidence to overcome the statutory presumption of non-compliance in a dispute.
Sources
This article provides general legal information, not advice for a specific matter. Laws, facts and procedural deadlines may change the result. Follow the linked primary sources and obtain local advice before acting.