What is a Default?

A default refers to the failure to fulfil a financial or contractual obligation or agreement. It will often occur when an individual or business fails to make the agreed monthly payments or meet a deadline for repayment of a loan. People often underestimate the impact that a default has on their credit file and focus more on CCJ’s.

Defaults are usually recorded against you once your account has run more than 6 months in arrears. The severity of the default will depend on the balance of the default and the type of credit commitment account which has defaulted. For example, a mobile phone contract default would be considered less severe than a defaulted credit card account.

Once a default has been recorded on your credit file it stays there for 6 years.  However, if a creditor does decide they want to pursue the case through the court, it could stay on your credit file for a further 6 years (making 12 years in all). Repaying the debt or coming to an agreement with the creditor will stop this happening.

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