What is a...

Notice of Default

A Notice of Default is a formal letter sent from a lender to a borrower who has missed repayments for an extended period of time, informing them that settlement is required or the account will enter default in 14 days.

How do defaults appear on my Credit Report?

If your account has defaulted, the lender is likely to report this to the Credit Reference Agencies as a default marker, where it’ll appear as an adverse entry on your Credit Report.

You can check your Multi Agency Credit Report with checkmyfile, where you’ll get access to your information from Equifax, Experian and TransUnion – all on one easy-to-use platform. You’ll be able to see if you have any defaulted accounts registered against you, quickly and easily.

If you haven’t already, you can try checkmyfile free for 30 days, then for just £14.99 per month. Cancel online whenever you like.

How long will a default impact my Credit Report?

Defaulted accounts remain on your Credit Report for six years, from the date of default. This is regardless of whether the account is subsequently satisfied or not.

Once the full six-year period elapses, the defaulted account should be completely removed from your Credit Report, meaning it will no longer impact your creditworthiness.

What is the purpose of a Notice of Default?

The notice is required before a creditor (lender) can take any of the following five actions:

  • Terminate the agreement
  • Repossess goods or land
  • Demand earlier payment of sums due under the agreement
  • Treat as restricted
  • Terminate or defer any of the debtor’s rights under the agreement and enforce a security

It applies to all types of breach of a regulated agreement, not just default in payment and is only applicable where the creditor intends to take one of the five types of action. A simple reminder not threatening one of these actions is not a Default Notice and not governed by Consumer Credit Act 1974.

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