The treatment of credit information is regulated by the Credit Information Act (Luottotietolaki, 527/2007). Payment defaults related to bank overdrafts or credit cards and payment defaults related to instalment purchase contracts are saved in the credit information register for two years. Common payment defaults on payment demands include judgments of default in payment demand matters and insolvency verified in debt recovery proceedings.
Such payment demands are generally saved in the credit information register for three years. Any unpaid withholding tax and VAT instalments published by the Tax Administration are also considered payment demand matters in the credit information register. Protests of bills and drafts are also saved for three years.
Bankruptcy information and corporate reorganisation in the credit information register
Information related to a bankruptcy is deleted from the credit information register within five years of the start of the bankruptcy. The exact time is determined by the reason for the termination of the bankruptcy. If a bankruptcy became void through lack of funds, the information is deleted three years after the bankruptcy started. The time of deleting information related to corporate reorganisation is determined by the reason for the termination of reorganisation. The information is deleted from the credit information register within one month from the deletion of the corresponding information from the bankruptcy and corporate reorganisation register maintained by the Legal Register Centre. A business prohibition is maintained for the duration of the prohibition plus three years.
New payment defaults extend the retention period in the credit information register
The payment default retention period may be extended if a new payment default is registered for the same party during the retention period. If the invoice that caused the default is paid quickly and no new payment defaults are registered, the period may be shortened to two years. One debt cannot cause several payment defaults.
A payment default will limit operations in many ways and, in some cases, may render it practically impossible to continue business operations. Loans, including student loans, cannot usually be granted to a person with a payment default register entry, and the acquisition of a rental apartment, a telephone subscription and insurance will be much more difficult.
Companies also have the right to determine what information on the company and its key persons is stored in the credit information register.