You certainly don’t want a default on your credit file, but if due to circumstances you end up with one, you need to know the facts.

Defaults are reported for 6 years - whether you pay the balance or not, it will stay reported for this full time period unless it has been recorded in error.

If you believe a default reported against you is incorrect, you need to speak to lender reporting this to query it. If they agree they have made an error they have the power to correct this record, but this process can typically take 4-6 weeks. If the lender is unhelpful, the next option may be to dispute this record with the credit reference agency it has been reported to, or complain to the relevant regulator or ombudsman in an attempt to reach a resolution.

If a default is correct, you can pay it, partially satisfy the outstanding debt, or continue to leave the balance outstanding. If you pay the account, this should be marked as satisfied on your credit file and show a zero balance, but the original default will still be visible and will still have a severely negative impact on your file.

You may feel that if you pay the balance then this should reverse the negative impact of the default, however it is the fact that an account was allowed to fall into this negative status that carries with it the negative connotation and this fact remains regardless of what has happened after this fact.

If you partially settle the default, the account will typically be reported as partially satisfied and this status indicates that the account has been closed to the mutual agreement of both parties.

If you leave the account unpaid, you can still be chased for the balance as long as it remains outstanding, regardless of the 6-year reporting period. In some circumstances a default has been reported for 6 years then removed from the credit file, but then you still receive contact from a debt collector. Just because the record is no longer on your file doesn’t mean that the balance isn’t owed.