When you fall behind on a credit agreement, the lender may send a default notice and then record a default on your credit file. Knowing how this works can help you plan your recovery.
The short answer
- A default stays on your file for six years from the default date.
- Paying it off doesn’t remove it, but it will show as satisfied.
- Lenders must usually send a default notice giving at least 14 days to catch up.
- Defaults are usually recorded after about three to six months of missed payments.
- Entries in an IVA, DRO or bankruptcy also last six years.
What is a default notice?
For most regulated credit, such as loans and credit cards, the lender must send a formal default notice before ending the agreement or demanding the full balance. It tells you how much you need to pay to bring the account up to date, and gives you at least 14 days to do so.
Why can a default be a good thing?
It sounds odd, but a default sets a fixed date. Six years later, it drops off your file. If an account is left in arrears without being defaulted, missed payments can keep being reported. Some people in debt solutions ask creditors to register defaults for this reason.
Can I get a default removed?
Only if it’s wrong, for example if you weren’t sent a proper notice or the date is incorrect. You can ask the lender to correct it, and complain to the Financial Ombudsman if they won’t.
See also an IVA and your credit rating and rebuilding your credit score.
Common questions
Does paying a default improve my credit score?
It shows as satisfied, which some lenders view better than unpaid, but the default stays for the full six years.
Can a creditor default me while I'm on a payment plan?
Yes. Reduced payments can still lead to a default if the account isn’t being paid as agreed in the original contract.
Do defaults affect my partner's credit file?
Not directly. Only joint accounts or a recorded financial association link your files.
Getting help
You don’t have to deal with debt on your own. Free, impartial advice is available from MoneyHelper, StepChange and National Debtline. If you want to talk through whether a formal solution such as an IVA could be suitable, you can also get in touch with us.