Home > Financial Tips > Defaults vs. Serious Credit Infringements: What’s The Difference?

Defaults vs. Serious Credit Infringements: What’s The Difference?

Rachel Horan

Rachel Horan

May 13, 20215 minute read
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There are numerous ways your credit score can be damaged, including overdue or missed payments. A default and a serious credit infringement are both considered ‘overdue debts’, but what’s the difference between the two? And can you remove them from your credit report?

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    Find out what you need to know about defaults and serious credit infringements in our guide below.

    What is a default?

    A consumer default is a debt equal to or greater than $150 that is more than 60 days overdue. Before listing a default, the credit provider must take reasonable steps to get the customer to pay their debt.


    There must be two written notices sent to the last known address of the person requesting that:

    • They pay their debt and;
    • Warning them that not doing so may result in the missed payment being listed with a credit bureau.

    If the default is a commercial credit default, the minimum amount is $100 instead of $150. Before listing this as a default, the commercial credit provider must send one notice to the last known address of the person. The notice must state that they may list the default with a reporting body if they don’t pay their debt.

    Both consumer and commercial credit defaults can remain on your credit report for up to five years. This can negatively impact your credit score and cause lenders to be wary when considering your credit application.

    What is a serious credit infringement?

    A serious credit infringement is a consumer debt in which the person owes a debt to a credit provider but has left (or appears to have left) their last known address without paying their debt or providing a new forwarding address. It can be lodged with a credit bureau if, after six months or more, the borrower has not made contact with their credit provider, despite attempts by the provider to initiate this.

    Consumer serious credit infringements can remain on a credit report for seven years. When they are paid, they revert back to a default and can remain on the report for five years.

    What’s the difference between a default and serious credit infringement?

    The difference between a default and serious credit infringement is the severity of the overdue debt. A default becomes a credit infringement if you fail to pay the debt after a longer period of time. While a default can be lodged 60 days after the due payment, a serious credit infringement can only be lodged six months after the payment’s due date and after several attempts to contact the borrower. A serious credit infringement can have a more damaging impact on your credit score, and remain on your credit report for an additional two years than a default.

    Can I remove a default or serious credit infringement from my credit report?

    If it is a legitimate enquiry, it’s likely not possible to remove a default or serious credit infringement from your credit report. In most instances, you may have to wait until the five year period has passed before the listing is removed from your credit file. Typically, only incorrect or inaccurate information can be removed from your credit report. If this is the case, you can contact a credit reporting agency to have this information removed.

    How can I avoid defaults and serious credit infringements?

    The simplest way to avoid defaults and serious credit infringements is to ensure that you pay all of your debts and bills on time. There are some steps you can take to make sure you don’t miss payments and risk a default:

    • Ensure that all of your contact details are up-to-date: If you move to a new address, log into your online account or contact your credit provider to let them know. This way, you avoid the risk of missing any bills or late payment notices.
    • Set up automatic repayments: Setting up an automatic debit system reduces the possibility of forgetting about your repayments. After you set it up, all you need to do is make sure there are sufficient funds in your account to cover your payments.
    • Consider your financial hardship options: If your accounts are overdue because of cash flow problems, you might want to consider contacting your credit provider to discuss your hardship options. You may be able to arrange alternative options, including extended payment periods or paying in instalments.

    Can I improve my credit score with a default or serious credit infringement?

    While a default or serious credit infringement stays on your report from five to seven years, this does not mean that you cannot improve your credit score within this timeframe. Here are some easy ways you can improve your credit score, even with a default or serious credit infringement:

    Make your repayments on time

    It’s important to make your repayments on time for any existing debts that you have. Demonstrating a consistent payment history is considered by credit bureaus when calculating your credit score. Therefore, making your repayments on schedule may be reflected in your credit score.

    Consolidate your debts

    Consolidating multiple debts, if done through a consolidation loan, could result in another credit inquiry on your credit report, which in the short term, would impact your credit score (not improve it). It would be advisable to contact your credit provider and see if they are able to enter in a payment arrangement (hardship payment plan, settlement agreement), to change the status of the default/infringement to settled from failed which will also shorten the time it will remain listed on your credit file, thus improve your credit score.

    Limit your credit applications

    Applying for multiple loans or other forms of credit in a short period of time can cause your credit score to dip. This is because each time you apply for a loan, whether you are approved or not, the lender can record a hard enquiry on your credit report. Multiple hard enquiries within a short time frame can cause your credit score to drop. If you need multiple loans, it may be helpful to space out your applications as much as you can.

    Copyright © www.jacarandafinance.com.au Jacaranda Finance Pty Ltd ® ABN 53 162 078 195 Australian Credit Licence 456 404, Pawnbroking License Number 4221738. The information on this web-page is general information and does not take into account your objectives, financial situation or needs. Information provided on this website is general in nature and does not constitute financial advice.

    Rachel Horan
    Rachel Horan

    Written by Rachel Horan

    Rachel Horan is a Content Writer for Jacaranda Finance. Rachel has previously produced content for Brisbane City Council, Black & White Cabs, and Clubs Queensland. She has a Bachelor of Mass Communication with Distinction from the Queensland University of Technology.

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