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Credit Defaults: How They Affect Your Credit File & What You Need To Know
August 30, 2019● 6 minute read●
Written by - Jacaranda Team
What are credit defaults, and how can they affect your credit file and ultimately credit score?
Maybe you’ve been issued with a notice of an overdue debt? A credit file default is simply an overdue debt over the value of $150 and more than 60 days overdue. Wondering how a default could affect you? Unfortunately, credit is one of those nasty things that stick around for a while. A default on your credit report can actually be recorded for up to 5 years and have an impact on your ability to apply for a home loan, credit card or loan for Centrelink.
It’s good practice to keep your credit score as healthy as possible, but we know this isn’t always easy. The good news is, Jacaranda Finance is revolutionising the way we look at poor credit. We won’t claim to approve every single loan application. However, we can guarantee our team will look further than your credit score.
How Long Does A Credit Default Stay On File?
If you’re not sure how long a default stays on the credit file, it really depends on the type of infringement. A serious credit infringement is when a consumer has an overdue debt to a credit provider and cannot be contacted at their current address and has not left a forwarding address. Serious credit infringements usually remain on a credit file for 7 years from the date they were listed.
If you pay your debt, the length of time that it will remain on your file will revert to five years. The default will remain on the file once paid but for a period of two years less than if left unpaid.
Other information that will be included on your credit file:
- Repayment history information
- Any credit enquiry
- Overdue accounts listed as payment defaults
- Overdue accounts listed as clearouts
- Writs and Summons
- Court judgments
How Do I Get These Infringements Off My Credit File?
If you’re wondering how to get a default removed from your credit file, unfortunately, it can’t just be removed. The only way to remove the default from credit file is if the individual can prove that the listing is an error or that the creditor did not make reasonable efforts to contact the individual. If neither of these circumstances applies to the credit infringement, the default will remain on file for between 5 – 7 years.
Can I Contact A Credit Repair Company?
There are plenty of credit repair companies out there that claim to be able to repair your credit rating and delete credit defaults in a matter of minutes, but Jacaranda recommends you exercise great caution. Often, these companies promise results, however, hit you with exorbitant and unexpected fees and charges. We recommend you request a written quote before you give the go-ahead for the company to start proceedings on your behalf. It is highly important to ensure the bill is within your budget and worth your while.
How Do I Get A Copy Of My Credit File?
To find out if you have any credit defaults, there are three agencies you can get a free report from. There is a possibility you may have credit file history with one or all of the credit reporting companies, depending on who the owner of the debt reported the infringement to.
There are three different credit reporting companies:
- Equifax (formerly Veda)
- Dun & Bradstreet
What Is The Difference Between My Credit File And Credit Score?
Your credit score is the outcome of your credit file: a numerical value calculated from the information in your credit file that is used by lenders to assess your credit risk. Your credit file itself is a summary of your financial reliability or history of paying your debts and bills.
What’s The Best Way To Remove A Credit Default From Your Credit File?
If you’re wondering how to remove the default from your credit file, the answer may disappoint you.
Unfortunately, the best way to remove a default from your credit score is time. Waiting the five to seven-year period is often required, but if you have serious infringements we do recommend you don’t leave these unpaid.
The good news is, there are things you can do to improve your overall credit report. Some examples include:
- Paying bills on time
- Keeping your credit card balance low
- Responsibly managing debt
- Limiting applications for new credit
Making a considerable effort to improve your ability to stay on top of your finances will show future creditors that you are capable of repaying a car loan as well as improving your overall credit score. Ensure you pay your bills on time, keep switching of lenders to a minimum, always notify companies of your address changes and only apply for credit when you need it.
Who is Jacaranda Finance?
Worried that credit defaults might stand in the way of your ability to get finance? Jacaranda Finance is a local, Australian run lender. Our team endeavours to make safe and affordable credit accessible to everyone. Even if your credit file has defaults or is less healthy, we may be able to offer you a personal loan if we see recent good financial behaviour.
We don’t just look at your credit score: this is not to say we won’t conduct a credit check as we are committed to responsible lending. However, we take into account a range of factors when assessing applicants financial situation. Our team will focus on how you are going to repay the loan, rather than dwelling on the past. We look at read-only bank statements, employment status and other financial commitments as indicators as to whether a personal loan is a responsible financial decision for your individual circumstances.
That’s right… when you apply for personal loans with Jacaranda Finance the entire process – from application to approval – is 100% online! We’ll do our best to get back to you with an outcome in 60 minutes* if you apply during AEST business hours.
Worried that your cash might takes days to hit your account? Worry not. Jacaranda has now made instant bank transfers available* for approved loan applicants. An instant bank transfer means that as soon as your loan is approved, and you sign your digital contract, the cash can be transferred to your account in 60 seconds.*
Who Can Apply?
Considering an application but unsure who can apply? At Jacaranda, we like to keep things as simple as possible. So, if you’re planning on getting a fast cash loan, all you will need to do is meet the following criteria to begin your application…
- All applicants must be over the age of 18;
- Applicants must have received some type of regular income for the last 90 days into a bank account that is your own;
- Active mobile phone number and email address must be provided;
- Applicants must have internet banking set up.
What Documents Will I Need To Provide?
In terms of documentation for a personal loan application, the Jacaranda team will only ask you to provide the necessities. You won’t even have to leave the comfort of your own home to submit an application. Here’s what you’ll need to have handy…
- Personal details like your online banking & employment info
- An active email address and mobile number
- The reason you are applying for the loan
- Your MyGov details (if you are receiving Centrelink payments)
- Employer and contact details
The team at Jacaranda wants to make the application process as simple as possible. If you’ve got any questions at all our team is here to help.
Visit our contact page or, if you’re ready to start your application, scroll up to use our handy repayment calculator.
Jacaranda Finance is committed to responsible lending. What does that mean? Basically, we will do all the necessary checks before we lend any amount of money to an applicant. Our team will never approve a loan that can not be repaid. That means if you don’t have the means of repayment, we will not give you the money. At Jacaranda Finance, we want to promote financial wellbeing. That means we want to see our customers on the right track to financial freedom, we don’t want to create debt. ASIC’s code of Responsible Lending can be found here.
Written by Jacaranda Team