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If you miss a payment on a credit card, loan, mortgage or any other kind of debt, you could be issued with a default notice.

Defaults are recorded on your credit file and can negatively impact your score making it harder to borrow in the future.

Here’s everything you should know including how defaults work, what to do if you get a default notice and when they drop off your credit file.

What is a default?

A default is when you break the terms of your credit agreement, for instance by missing a payment, paying late or not paying the monthly minimum required.

The default occurs when the company you owe money to thinks that you won’t be able to pay back your arrears.

Once they’ve issued a default – they can then take further steps to recoup their money, such as passing the debt to a collection agency or taking you to court.

What is a notice of default?

When you miss payments, your creditor might issue something called a default notice.

This warns you that you’re behind on payments and giving you a chance to catch up before the debt defaults. You should be given at least two weeks to pay off the outstanding arrears.

Not every creditor will send one – they only have to if the debt is covered under the Consumer Credit Act 2015.

Lenders not covered by this law might send you a final demand instead, or they could proceed straight to a default.

What should I do if I get a notice of default?

If you’re sent a notice of default, you should try to pay the amount off straight away. Notices don’t appear on your credit record, so acting swiftly can protect your score. 

If you can’t afford the payment, call your lender immediately. They may be able to help, for instance by offering you a payment holiday.

Also consider speaking with a debt charity such as or for further advice. They can help you negotiate with your lender and offer solutions to help you better manage your debts.

Does a default affect my credit rating?

Yes. If your account defaults a mark will be placed on your credit report and your score will likely drop as a result.

This will make it harder for you to secure borrowing in the future as lenders will see you as a risky bet. It could impact your ability to get a mortgage, loan or other financial product. You could even struggle to get a phone contract with bad credit.

Where you can get credit, you’re likely to be offered poorer deals if you have a default on your file. This means higher interest rates, so your cost of borrowing will go up overall. 

Reducing the impact of a default on your credit rating

There are things you can do to reduce the impact of a default on your credit report.

The first thing is to pay the outstanding debt off, in full, as soon as possible. The debt will then be marked as ‘satisfied’ which can help reassure other lenders.

If there was a reason you defaulted, for instance, if you were made redundant or sickness left you unable to work – you may be able to add a note to your credit file. This can help reassure lenders that the debt was due to circumstances beyond your control.

You can also take other steps, such as making sure you’re on the electoral roll, correcting any errors and building up responsible credit use over time to improve your score.

How long does a default stay on my credit file?

A default sits on your file for six years and will have an impact for as long as it’s on there.

That’s why it’s best to act quickly if you’re issued with a default notice to avoid getting a default. If you get to the default stage, the mark will stay on your record even once you’ve paid the debt in full. 

That said, it’s still worth tackling the debt once you’ve been issued with a default, as potential lenders often look on this more favourably than if the debt is still outstanding.

It will be marked as satisfied, so they’ll know it’s been paid off.  Also, it stops creditors from passing your debt to collection agencies or taking you to court to recover the money you owe.

Can you get a default removed from your credit report?

If the default is accurate then you can’t get it removed. It will stay there until the six years are up. If a default is showing and it’s inaccurate, then you can take steps to have it removed from your file.

What happens if there is an incorrect default on my credit report?

You can ask for any inaccurate information on your record to be updated or removed.

To do this, you need to raise something called a “credit report dispute” with the Credit Reference Agency (CRA).

The three main CRAs are Experian, Equifax and TransUnion, and you should check all of them carefully as the error could appear in multiple places.

If you spot a mistake, get in touch with the CRA and tell them what the inaccuracy is and why it needs to be changed.

They’ll speak to the lender and ask them to check the information they’ve supplied. In the meantime, a Notice of Correction will be added to your record.

If you’re correct and the data is inaccurate, your report will be updated to reflect this. If you and the creditor disagree, the CRA will advise you of next steps.

Where can I get help dealing with debts?

If you’re struggling with debt repayments, you should let your lender know as soon as possible. They might be able to help for instance by giving you a repayment holiday.

It’s also worth speaking to a debt charity who can help you manage your finances, come up with a repayment plan and deal with problems like defaults.

StepChange, National Debtline and all offer free advice for people struggling with debts.