How Long Do Defaults Stay on My Credit History?
Having defaults on your credit history can be really frustrating. A default or ‘black mark’ from years ago can be affecting a loan application that you’re wanting to make. Many people find it difficult to understand how a default on your credit report can be such an obstacle when trying to make a purchase such as a new car, home or something smaller.
Unfortunately, most defaults do stay on your credit report for between 5-7 years. This is a long time when you consider how much your finances can change within that time. It can be particularly frustrating for people looking to make substantial purchases or big life investments.
Understanding defaults on your credit report
There are lots of different types of defaults, which might appear on your credit report. Some of the most common include:
- Missed payments
- Late payments
- Defaults on loans
- Multiple credit enquiries
- Multiple loan applications
- Outstanding credit card bills
Unfortunately, paying off the default won’t remove it – although you can request that this information is recorded on your file.
Length of time for defaults on your credit report
Defaults on your credit report will stay on your file for five years. Default is generally referred to as a payment above $150 that is overdue by 60 days or more.
If you have been declared bankrupt, this will also be recorded on your credit report and will remain there for at least 5 years.
For more serious credit infringements such as fraudulently attempting to obtain the credit, you should expect the default on your credit report to last for 7 years.
Steps you can take if you have defaulted on your credit report
- Firstly you’ll want to double-check that the defaults on your credit report are actually accurate. You can request a copy of your credit report from a credit bureau such as Experian or Equifax. It’s often useful to get a copy from a number of different bureaus and to cross-check the information.
- If you find incorrect or inaccurate information about your defaults on your credit report, you have the right to dispute this and request for it to be changed. This can take a while but you should be persistent as it could make a big difference to your credit score and it’s worth getting them wiped off.
- Speak to your credit provider or lender to see whether there is any way you can renegotiate loans. This won’t help to get rid of defaults on your credit history but it could be an important step in getting yourself on track financially and avoid damaging your credit score further with additional defaults as you struggle to make repayments on loans you currently have.
- Ask for help from a credit repair agency. Some people find it difficult to go through their credit report; they may not understand the information presented or they simply don’t have the time or expertise to search through for errors and inaccuracies. Getting help from a credit repair agency is an option if you’ve got defaults on your credit report – yet it’s important you understand there is no guarantee that they’ll be able to do anything specific to help.
Timing your loan application
Once you understand how long defaults stay on your credit history, you might want to use this information to work out the best time for you to apply for a loan. If you can wait until your defaults have been erased from your credit history, you may stand a better chance of getting approval on your loan application.
It’s understandable though that many people won’t be able to wait years before needing to apply for a loan. If defaults have affected your credit rating don’t panic – there are trusted lenders available who work specifically with people with bad credit who can help you find the right loan for your situation, regardless of defaults on your credit report.
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