How to Get Out of a Default in Australia: Your Real Options

Finding a default on your credit file can be a shock — often it shows up only when a loan or phone plan is declined. The good news is that you have more options than most people realise, and some of them cost nothing.

This guide explains what you can realistically do about a default in Australia, step by step.

First, what a default is

A default is a listing a credit provider can add to your credit file when a payment of $150 or more is at least 60 days overdue, and certain written notices have been sent to you. It stays on your file for five years from the date it is listed. For the basics, see what a default on your credit file means.

Does paying a default remove it?

This is the most common misunderstanding. Paying a default does not remove it. Once paid, the credit provider should update the listing to show it as "paid", but the listing itself usually stays for the full five years.

Paying still helps:

• Lenders view a paid default more favourably than an unpaid one
• It stops further collection activity and possible court action
• It shows you have dealt with the debt

So if a default is accurate, paying it (or arranging a payment plan) is usually the best path. If you are struggling to pay, contact the National Debt Helpline on 1800 007 007 for free help.

When can a default be removed?

A default can be corrected or removed when it should not have been listed the way it was. Common reasons include:

• Missing or defective notices. The credit provider must give you written notice of the overdue amount and its intention to list, and allow the required time before listing. Our article on default notice requirements explains this in detail.
• Wrong amount. The amount listed is incorrect or includes charges that should not be there — see what to do if the default amount is wrong.
• Not your debt. The account belongs to someone else, or is the result of identity fraud.
• Under the threshold or too soon. The overdue amount was under $150 or not yet 60 days overdue.
• Listed while in hardship or dispute. In some cases a default should not be listed while a valid hardship request or dispute is being handled.
• Out of date. It has been on your file longer than allowed.

If none of these apply and the default is accurate, it cannot lawfully be removed — and anyone who promises otherwise is a red flag.

Your step-by-step options

Step 1: Get all three credit reports (free)

Request your free reports from Equifax, Experian and illion. A default may appear on one bureau but not another. Here is how to get your free credit report.

Step 2: Gather your paperwork

Collect anything that relates to the debt:

• Letters, emails and texts from the credit provider or collection agency
• Account statements and payment records
• Any hardship request or payment arrangement
• Notes of phone calls (date, time, who you spoke to)
• Proof of address changes, if notices went to an old address

Step 3: Contact the credit provider directly (free)

Ask them to explain the listing and provide copies of the notices they sent. If you believe it is incorrect, ask in writing for it to be corrected. They must respond within set timeframes.

Step 4: Escalate to AFCA (free)

If the provider will not fix a genuine error, you can lodge a free complaint with the Australian Financial Complaints Authority (AFCA). AFCA can require a correction where the listing does not meet the rules.

Step 5: Get a professional review (optional)

If the process feels overwhelming, a licensed credit repair provider can review the listing against the Privacy Act and the Privacy (Credit Reporting) Code 2025 and manage the dispute for you. Learn how we approach this on our default removal page.

While you wait: protect your credit file

• Keep every other account up to date — repayment history matters
• Avoid lots of new credit applications, as each enquiry can be recorded (see our guide on credit enquiries)
• Check your reports again after any correction is made

For more ways to improve your position, read how to fix your credit file and how long listings stay on your credit file.

Getting help

You do not have to work it out alone. If you would like someone to look at your default and tell you honestly whether it can be challenged, A OK Credit Repair offers a free credit file assessment. Potential fees are confirmed in writing before any fee-bearing work begins and are only payable upon an agreed successful outcome — see our pricing.

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General information only. This article does not take your personal circumstances into account and is not legal or financial advice. Results depend on the facts of each matter and no outcome is guaranteed. Accurate credit information cannot lawfully be removed. A OK Credit Repair is an Authorised Credit Representative (CRN 580699) of Edward Griffith t/a Debt Management Services, Australian Credit Licence 533933.