What is a...

Default

A default is a negative payment marker on your Credit Report, that arises because of unpaid arrears. When a default is issued it usually means that the lender no longer sees the borrower as a customer, but instead sees them as a debtor.

How do I see if I have any defaults?

Any reported defaults in your details will appear on your Credit Report. You can view the UK’s most detailed Credit Report with checkmyfile, free for 30 days, then just £14.99 per month. Cancellation is quick and easy online at any time.

Your Multi Agency Credit Report shows your complete information from Equifax, Experian, TransUnion, and Crediva – letting you see everything that a lender will see.

How do defaults affect my Credit Rating?

Defaulted accounts are negative markers that severely damage your Credit Report and Credit Score. They remain on your Credit Report for six years from the date of default, regardless of any subsequent payment to satisfy the debt.

Defaults signify a great deal of potential risk to prospective lenders, as they demonstrate that the borrower has had difficulty keeping up with scheduled payments historically. Lenders are cautious when lending to those with poor credit histories, as the risk of missed repayments is increased. It can therefore be difficult to be accepted for credit, especially larger agreements like mortgages, with defaults on your Credit Report.

Defaults can arise in two ways: First, for regulated credit agreements, a default may be the result of failing to respond to a Notice of Default issued under section 87 the Consumer Credit Act 1974 after failing to make a repayment.

After receiving a default notice, the debtor has 14 days to pay the amount owed, either in one lump sum or instalments, otherwise a default will be registered on their Credit Report.

In the second instance, for credit agreements that are not regulated under the act, (e.g. mortgages) a default on a Credit Report simply reflects the fact that the lender considers the relationship between itself and a borrower to have broken down.

How can I remove a default from my Credit Report?

If a default on your Credit Report is accurate, you are unlikely to get a lender or Credit Reference Agency to remove it. That is because it is their legal duty to ensure all the information appearing on your Credit Report is accurate.

If a default is accurately reported on your Credit Report, it will remain there for six years, after which time it will be automatically removed.

If a default is incorrectly reported in your details, you can dispute the entry by contacting the relevant lender directly. As the lender owns and controls the information, they are legally required to amend the entry if they have made a mistake.

If you have any questions about disputing information, you can contact our Expert Team who can guide you through the process.

Can I get a mortgage with a default on my Credit Report?

Defaults are one of the most severe pieces of negative information that can appear on your Credit Report. For that reason, you may struggle to get offered a mortgage from a high street lender while one is appearing against you.

Some lenders may offer mortgages to borrowers with low Credit Scores or troubled financial histories, but this is likely to be at a much higher APR, costing more overall. As with a credit card, the better your credit history, the more likely you are to be accepted for better deals.

How long does a default last?

Defaults will remain on your credit report for six years from the date of being issued. After this time has passed, it is normal for the default to continue to appear on a Credit Report for a further month, as it might take this long for the change to be reflected by the Credit Reference Agencies.

If a lender has not issued a CCJ in the six years that the default was active, the debt becomes ‘statue barred’, which means they cannot pursue the debt through the courts. However, if you still owe them an outstanding amount after this time, the lender can still attempt to reclaim the debt through other means, such as using debt collectors.

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