Credit Default Listings – What to be aware of

Many people make the mistakes of shrugging off a credit default, mainly because they don’t fully understand how such a record can affect their financial future.

What Is a Credit Default Listing?

A default is also referred to as an overdue debt that has not been addressed. A credit default listing is an example of negative credit history, which leaves on your credit report for five years.

A credit report contains information about your credit history. It is important to check your credit report regular, which gives you an opportunity to identify any mistakes and have them corrected.

You can request a free copy of your credit report from the credit reporting agencies. The largest credit reporting agencies are listed below:

• Equifax Australia Information Services and Solutions Pty Ltd
• Experian Australia
• Illion

When Can a Default Be Listed on My Credit Report?

A default can be listed on your credit report if the overdue payment is equal to or more than $150 or the payment has been overdue for at least 60 days. A notice must be sent to your last known address to let you know about the overdue payment and requesting payment. If a second notice was sent at least 30 days later to tell you that you will be default listed if you don’t make a payment. Should you did not make a payment within 14 days after receiving the second notice you may have a default listed on your credit report.

Thus, your credit provider will have 3 months after issuing the second notice to list the default.
If you make a request for hardship and it is the first request in the previous 4 months, you cannot be listed a default on your credit report.

A default can only be listed after 14 days that they have told you of their decision to refuse your hardship request.

How to Remove a Default from Credit Report?

You generally cannot clear a default in your credit history, even if you have paid the debt in full. The default record will remain for five years, but the credit reporting company will update your credit history to “Paid”.

However, there are some scenarios where a default will be removed:

Incorrect default Issued

A mistake has been made and you have inaccurately been issued a default listing.

Creditor did not follow notice requirements

A creditor is required by law to provide written notice before listing a default.

Beyond your control

Situations like natural disasters or an error by a bank in processing a payment. You will need to explain why the default was an unavoidable consequence of something happening that was beyond your control.

Statute barred

A debt may be statute barred if you have not made any payments for years. Normally, it is 6 years depending on different states or territory.

How Will Defaults Affect You?

Having a credit default can negatively affect your ability to acquire loans or other forms of financing in the future. Additionally, having a credit default record can damage your relationship with potential business partners, as they will consider you with high risks of default.

Key Takeaways

It is important to note that defaults listing on your credit report is highly problematic. It could mean that you are not able to obtain a mortgage or secure a business loan under your name.

Don’t take credit defaults lightly as they come with grave consequences. The best way to prevent credit default is to make sure you pay all your invoices on time.

If you have any questions, please contact us.

Tel: 0402 948 474 | Email: [email protected]