When do I get a payment default entry?
A creditor or debt collection agency usually sends out debt collection letters (payment reminders and demands) before you get a payment default entry. You will not get a payment default entry simply because you are late with a payment.
You can get a payment default entry in many different ways.
- A creditor can notify a payment default to the credit information register when the payment of a consumer credit is overdue by at least 60 days. The creditor must also mention the possibility of a payment default entry in your credit agreement and send you a written payment reminder in which this possibility is mentioned at least 21 days before the entry is made.
- A payment default may be notified by the District Court when it has issued a verdict ordering you to pay the debt.
- Payment default entries may also be made during the enforcement phase or
- it may be related to debt adjustment.
What are the consequences of a bad credit record?
A bad credit record affects your life in many ways.
Examples of the consequences of a bad credit record:
- the credit card company may cancel your credit card
- it will be much more difficult for you to get credit
- it will be more difficult for you to conclude contracts on payments in instalments
- it will be more difficult for you to find a rental apartment and get home insurance, which is usually required by the landlord
- collateral or an advance payment will usually be required for contracts on telephone subscriptions and insurance policies
- it will be more difficult for you to get a job, especially if the task involves financial responsibility.
Even if you have a payment default entry, you have the right to basic banking services, including online banking credentials.
For how long will the payment default entry remain in the register?
If you pay your debt, this does not mean that the payment default entry is removed from the credit information register at once. However, paying the debt may shorten the period for which the entry remains in the register.
Payment default entries are kept in the register generally for two to three years . If you get another payment default entry in the meantime, however, this may mean that the previous entry will remain longer in the register.
You have the right to ask that information about you having paid the debt and any special reason that led to the payment default, such as a guarantee liability, is recorded in the register. You must be prepared to provide a reliable account of the payment or the special reason.
This is how you get information about a payment default entry
The credit information company (the company that maintains the credit information register) automatically sends you a notification of the first payment default entry in your name.
You have the right to receive information about your payment default entries from the credit information company.