The thresholds, the notices a credit provider must send, how long a default lasts, and the narrow circumstances in which one can be removed.
The short version
A default is a formal listing on your credit file saying you owed a credit provider at least $150 and were at least 60 days late paying it. Once listed, it sits on your consumer credit file for five years from the date it was recorded, and every lender who looks at your file will see it.
Most people find out about a default the same way: an application is declined and the lender mentions a listing they have never heard of. Old telco, utility and buy-now-pay-later accounts are the usual culprits.
The rules a provider has to follow
Under the Privacy Act 1988 and the Privacy (Credit Reporting) Code, a credit provider cannot simply list a default. The debt must be at least $150 and at least 60 days overdue. You must have been sent a written notice requesting payment, followed by a separate written notice telling you the default may be reported to a credit reporting body. At least 14 days must pass after that second notice before the listing is made.
Those notices must go to your last known address — an address you actually gave them. This is where a large share of incorrect defaults come from: notices sent to a place the person moved out of years earlier, or never sent at all.
Default, serious credit infringement, judgement
These are three different things. A default is an overdue payment and lasts five years. A serious credit infringement is recorded where the provider believes you deliberately evaded your obligations and could not be contacted, and it lasts seven years. A court judgement is a court order for the debt and also lasts five years, but is generally viewed by lenders as the most serious of the three.
Does paying it help?
Paying a default does not delete it. The listing is updated to show it as paid, which lenders do treat more favourably than an outstanding default, but the entry stays for the full five years. Anyone promising that payment removes a listing is misleading you.
When a default can actually be removed
Only where it is inaccurate, incomplete, out of date, misleading or unlawfully recorded. Common examples: the notices were never sent, the amount is under the threshold, the account was not yours, the debt was in dispute at the time, the listing has expired, or the same debt appears twice after being sold to a collector.
You can raise all of this yourself, for free, with the credit provider or the credit reporting body — and escalate to the Australian Financial Complaints Authority at no cost if you are not satisfied. Free financial counselling is available on 1800 007 007.
Check your own file first
Before anything else, get your free credit report from Equifax, Experian and illion. They can differ. You cannot dispute what you have not read.
General information only, current as at the date of publication. This is not financial, credit or legal advice. Accurate, complete, current and lawfully recorded listings cannot be removed.
A default is a listing recorded by a credit provider when a payment of $150 or more is at least 60 days overdue and the required notices have been sent to you. It stays on your consumer credit file for five years from the date it was listed.
How much do you have to owe before a default can be listed?
The overdue amount must be at least $150 and at least 60 days past due before a default can be recorded under the Privacy Act 1988.
Does paying a default remove it?
No. Paying a default changes its status to 'paid', which lenders view more favourably, but the listing itself remains for the full five years unless it was recorded incorrectly or unlawfully.
What notices must a credit provider send before listing a default?
The credit provider must have sent a written notice requesting payment, and a second written notice stating that the default may be disclosed to a credit reporting body. Both must go to your last known address, and at least 14 days must pass after the second notice.
What is the difference between a default and a serious credit infringement?
A default is an overdue payment. A serious credit infringement is recorded where a provider believes you have evaded your obligations and cannot be contacted, and it stays on your file for seven years rather than five.
