Skip menuLog in to Nordea NetbankLog in to Nordea Business

What does a payment default entry mean?

A payment default entry is an entry in a credit information register, made after a court decision, for example. It means that you have an overdue bill or debt that you haven’t paid despite multiple reminders. For the debtor, a payment default entry and having a poor credit record mean the same thing in practice.

The purpose of payment default entries is to protect consumers by preventing debts from piling up. At the same time, banks and other lenders can check these entries to assess a loan applicant’s repayment ability, which builds trust in lending.

My bill or loan payment is overdue – am I at a risk of getting a payment default entry?

Many people can get worried about a poor credit record if they find an old unpaid bill, for example, or if they don’t have enough money in their account when their loan repayment is due.

The good news is that a payment default isn’t recorded instantly – it’s the result of a longer process, giving you time to put things right. 

In case of a loan repayment, for example:

  • If we have tried to debit your loan repayment several times without success, we will send you a payment reminder. You will get this reminder to Nordea Mobile and Netbank or as a text message. 
  • If you don’t make your loan repayment by the agreed deadline despite the reminder, we will send you a letter to your home address demanding for payment. If you continue to miss loan repayments for a longer period of time despite our demands for payment, we will hand over your debt to a debt collection agency. 
  • The agency will send you another demand for payment. If you still don’t pay your debt by the agreed deadline, the debt collection agency will take the matter to court for legal collection. This may then result in a payment default entry being recorded for you.

As you can see from the example, a payment default entry can’t be recorded for you immediately after you miss a due date. However, it’s important that you act in time, as late payments may also affect your day-to-day life and your ability to manage your finances, making it harder for you to get new loans, for example.

If you realise that you can’t pay a bill or make a repayment, contact your creditor as soon as possible. Payment difficulties are often temporary, and it’s usually possible to find a solution, such as a payment arrangement.  

How can payment default entries make it more difficult to get banking services?

It’s important to note that it’s not only payment default entries but also late payments that may limit certain banking services. The impact varies depending on the service,

with new home loans, consumer loans and credit cards among the most heavily impacted ones. With these services, any evidence of payment difficulties often leads to applications being rejected.

Basic banking services, such as a current account, a debit card and online banking credentials, are generally still available even if you have payment difficulties, as these are basic services guaranteed by law.  

Read more about our basic banking services 

What other consequences can a payment default entry have?

In addition to limitations to banking services, a payment default entry may have many other day-to-day consequences:

  • Finding a place to live becomes harder – landlords often check credit records before agreeing to a tenancy. 
  • Daily services come with stricter terms – phone companies, electricity companies and insurers might refuse service or demand payment upfront. 
  • Finding a job may be more difficult – for some roles, credit checks are part of the recruitment process and a poor credit record might mean missing out on a job. 

How can I prevent payment difficulties?

The best way to avoid late payments from becoming a habit is proactive financial planning combined with a set of practical actions: 

  • Automate your payments. Set up e-invoices or direct debits for your loan repayments and other important bills to avoid forgetting to pay them. How to set up e-invoicing.  
  • Choose convenient due dates. Match your payment dates to the days you get paid, so there’s money available when you need it.
  • Create a budget. List your income and expenses and identify areas to save. Pay the most important bills first, such as the costs of living, then any debts. Learn to budget your finances.
  • Build an emergency fund. Start saving a financial buffer to help you cover unexpected expenses in the short term. Learn about building a buffer.

Help with late payments

insurance umbrella money cloud blue 640x360

If you’re struggling to repay your loan, get in touch with us as soon as possible.

Together, we can find a solution that works for you.

How to get help with late payments

When will a payment default entry be removed and how can I get rid of one?

Personal finances - Two man hiking among rocks outdoors - small

Although a payment default entry can make life difficult in many ways, it’s not the end of the world and it won't be on record forever. Usually, a payment default entry will show on your record for 2 to 3 years, unless you pay your debt earlier.  

Certain payment default entries will be removed a month after the credit information companies are informed that the debt has been paid.  

This means that the quickest way to get rid of a payment default entry is to pay the debt that caused it.  

The credit information companies may not necessarily get the information about a paid-off debt automatically, so it’s advisable that you’re active and contact the credit information company yourself or ask your lender to inform the credit information company.   

Read more on Guarantee Foundation’s website 

Need help?

Personal customers