Positive Credit Register website, photographed in Helsinki on 3 March 2025. The Positive Credit Register collects information on individuals’ loans and income (salaries, pensions, and benefits). The register is based on legislation and aims to reduce household over-indebtedness. LEHTIKUVA
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More than 373,000 people in Finland now have at least one payment default, according to new figures released for the first quarter of 2025. The number has increased by around 4,000 since the end of 2024, marking the highest level since the credit data law was amended in December 2022.
The number of payment defaults had initially declined following the legal reform, which shortened the retention period of default entries to one month after the debt was paid.
However, the trend reversed in early 2024 and has continued to climb steadily.
The rise in defaults has accelerated in 2025. In the first quarter of the year, the number of new defaults grew by 14 percent more than in the previous quarter. The most significant cause continues to be unpaid consumer credit, including payday loans and overdrafts. These accounted for nearly 68 percent of all court-ordered debt recovery rulings in early 2025, up from 57 percent two years ago.
Mikko Karemo, Deputy CEO at credit information firm Asiakastieto, said the current development raises concerns.
“The increase in defaults from unpaid consumer loans is worrying. The credit law reform was meant to improve the situation of those struggling with debt, but many are falling back into difficulties soon after clearing their records. It is questionable whether the new rules are serving the over-indebted,” Karemo said.
Before the reform, default entries remained in the credit registry for two years after the debt was settled. The current system removes the entry within a month, enabling individuals to take out new credit sooner.
Sharp rise in first-time defaults among young people
The data also shows a notable rise in the number of young adults receiving their first payment default. In the first three months of 2025, around 850 people under the age of 20 and 2,150 individuals aged 20–24 were registered with their first default.
Compared to the same period in 2022, this represents a 22 percent increase among those under 20 and a 65 percent increase for 20–24-year-olds. Nearly 9.5 percent of men in the 20–24 age group now have at least one default.
Karemo suggested that the shortened retention period may weaken the deterrent effect of defaults for younger borrowers.
“If it becomes easy to regain a clean credit record, the pressure to manage finances responsibly decreases. It may be time to consider whether the default retention period should be extended, especially for repeated cases,” he said.
Consumer loans dominate default statistics
The overwhelming majority of payment defaults stem from unpaid consumer credit. From January to March 2025, nearly 68 percent of court rulings for debt recovery involved overdrafts, one-time loans, or payday loans. This figure has grown by more than 10 percent over two years.
Meanwhile, defaults related to unpaid mail-order or online shopping purchases have declined.
“Consumer credit is now a common payment method both online and in physical stores. The impact of this is clearly visible in default statistics. The overall increase in court rulings signals a deepening financial crisis for many over-indebted households,” Karemo added.
The number of restaurants, shops, and services offering instalment payments or quick loans as default options has grown, making it easier for consumers to take on credit even when they are unable to repay. Many consumers now oscillate between having clean credit and receiving new defaults, a trend that appears to be intensifying across age groups.
HT
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Source: www.helsinkitimes.fi
