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Removing a Default Listing From Your Credit Report
●March 15, 2021●4 minute read
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If you are looking for ways to restore your credit, you may be investigating how to remove a default listing from your credit report. There are ways that defaults can be removed from your credit report under certain circumstances.
What is a credit default listing?
A credit default listing is used to demonstrate an overdue debt that has not been paid. A ‘default’ exemplifies a ‘bad credit history’, which, in turn, damages your credit score. This default can stay on your report for up to 5 years.
An example of how you may incur a credit default may be helpful. Let’s say that you had an outstanding water bill of over $150 that was left unpaid for an excess of 60 days. This could be listed as a default on your credit report by your water provider if left unaddressed.
How do I find out if I have a credit default?
Providers do not opt to immediately lodge credit defaults on your credit report. They will take a number of steps to first get the consumer to pay their bill before turning to lodge a default with a credit reporting agency.
You will receive the first notice as soon as the payment is overdue, informing you of this and requesting that you pay your overdue bill.
The second notice must be sent, at minimum, 30 days after the first notice. This notice will inform the consumer that if they don’t pay the overdue amount, the creditor will issue a notice for the outstanding amount that requires payment.
After a minimum of 14 days from the second notice, the provider can inform a credit reporting bureau and a default will be listed on your credit report.
You will not be notified by your provider if you have had a default listing lodged against you. If you are unsure whether you may have one, you can access a free copy of your credit report once per year from any of the three major credit reporting agencies: Equifax, Experian and Illion.
Can I remove a default listing from my credit report?
If you have a default on your report, even after you pay your bill, this does not mean that the default will be removed. Rather, the creditor will advise the credit reporting bureau to mark the listing as ‘paid’ when you pay your bill, not request that the listing be removed. Additionally, if you miss any further payments, this can be lodged as a separate default.
If you believe that there has been a mistake and you have been issued a default without merit, you can have this adjusted free of charge. The credit reporting agency will investigate your claim and, after finding that the default is inaccurate, out-of-date, incomplete or irrelevant, they can remove the listing.
Equifax has other circumstances in which you can have a default listing removed, including:
- If a default on the consumer portion of your credit report has become ‘statute barred’
- If there is a listing lodged and you have a new arrangement with the provider, and the default on the consumer portion of your credit report was due to an unavoidable circumstance like a natural disaster or bank error
Does having a default listing on my credit report impact my chances of securing a loan?
When you apply for a loan, the lender will conduct a credit check to determine your ‘credit-worthiness’. This is to ensure that you can afford to manage your loan. If you have had multiple defaults listed on your credit report, this has likely resulted in a dip in your credit score, making it more difficult to secure a loan.
Traditional lenders, like banks and credit unions, usually do not favour applicants with bad credit scores as they have very strict lending criteria. In this way, having default listings on your credit report may limit your loan options. However, you may still be able to secure a loan through an online lender, like Jacaranda Finance, that can offer bad credit loans to eligible applicants.
How can I avoid credit default listings?
If you are looking to avoid credit defaults in the future, there are a few easy ways you can do so.
- Pay your bills in full and on time. This can be done through direct debits or scheduling your repayments regularly in line with your pay.
- Ensure your creditors have your current contact details for your internet, phone and energy bills. This is so that if you do miss a repayment, they are not sending their notices to the wrong address.
- If you are unable to pay a bill on time, contact your provider to let them know. They may be able to assist you with hardship options.
Personal Loans with Jacaranda Finance
If you are in need of short term financial assistance, Jacaranda Finance offers affordable, fast personal loans from $300 to $10,000 to eligible applicants. We are a 100% online lender that specialises in fast loan outcomes; you could have your loan outcome within 60 minutes*. If you are struggling to keep up with your repayments, we also offer consolidation loans to simplify your payments. If you have bad credit due to credit defaults, Jacaranda Finance offers bad credit loans. No matter your situation, Jacaranda will have a loan option to suit you.
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Written by Jacaranda Team