What is a default?
A default is a listing on your credit file that says you were at least 60 days overdue on a payment of $150 or more. It stays on your file for five years from the date it was listed, even after it is paid.
The rules a lender must follow
Before a lender or collector can list a default, the law requires them to:
- Make sure the amount is $150 or more and at least 60 days overdue
- Send you written notice asking for payment
- Give you notice that they intend to report the default to a credit reporting body
- Wait at least 14 days after that notice before listing
- List the correct amount, the correct date and the correct person
If any of these steps were missed, or the listing is inaccurate, there may be grounds to have it corrected or removed.
How we review a default
We obtain your credit reports, request the lender's records, and compare the dates, amounts and notices against the legal requirements. If we find a genuine problem, we lodge a correction request with evidence. If the lender will not fix it, the matter can go to AFCA, which is free for consumers.
When a default will stay
If the debt was yours, the notices were sent and the details are right, the default will stay for the full five years. In that case we focus on what you can control: paying or settling the debt so it shows as paid, keeping every other account on time, and planning your next application.