A default badly damages your credit score, so how long will it stay there? That depends on what the default date is.
In Britain, the credit record rules say:
the debt, including the default, is deleted from your credit record six years later after the first default.
A debt which is marked as defaulted will be deleted after six years in all the following situations:
- you have repaid the debt in full;
- you have made a partial settlement;
- you are still making monthly payments to it; or
- you haven’t made any payment to it for years.
There are no exceptions to this rule. A debt with a default date in May 2016 will drop off your credit record in May 2022.
The longer ago the default date is, the better because it will disappear sooner.
The default date should be the same on all three credit reference agencies but it’s good to make sure, see How to check your credit records which explains how you can check all three credit reference agency record for free.
This article looks at what the default date should be. If you can get a creditor to change a default date from June 2017 to April 2015, the debt will disappear more than two years earlier.
Contents
When should a default date be added to a credit record?
SCOR, the industry forum that handles credit reporting, says about defaults:
As a general guide, this may occur when you are 3 months in arrears, and normally by the time you are 6 months in arrears.
There are exceptions to this which may result in a default being recorded at a later stage, such as secured or long term loans e.g. mortgages, or if the product operates in a more flexible way e.g. current accounts, student loans, home credit.
Those are the main guidelines, but let’s look at specific situations.
Debt management plans and arrangements to pay
For situations where you miss a few payments, or make reduced payments, or enter a Debt Management Plan, the “3-6 months” guidance above applies.
If your arrears have already reached three months, then the lender can register a default, even if an arrangement to pay is then agreed or you pay the debt in full.
Arrears will usually continue to mount up when you have an arrangement to pay or a DMP, so later a default can be added even if you are making all the payments.
At the start of a DMP or an arrangement to pay you may not want a default – they do harm your credit score! But if you aren’t going to repay the debt in a few years, having a default is usually better because your credit score will clear up sooner. With no default date added, the record will stay until 6 years from the date the debt is finally settled which could be a long while.
So it can often be better to have a default early in a debt management plan rather than not have one – see this article on DMPs and Credit Ratings for some examples.
Overdrafts are more complicated – and defaults will be later
For most loans and credit cards the standard 3-6 month provisions apply – the common exception is current accounts.
There is no regular or minimum monthly payment to an overdraft, so the concept of “3-6 months in arrears” doesn’t really exist. You may have abandoned an account with an overdraft and switched to using a different account, but unless you told the bank this and asked for an arrangement to repay it (for example in a debt management plan) the bank may not have been able to tell.
So default dates for overdrafts can often be later than you would think.
Debt sold to a debt collector
When a debt is sold to a debt collector, the new creditor should use the same default date as the original creditor did.
If the original lender didn’t add a default, you can ask them to add one, then the debt collector will have to use that.
In the unusual case that the lender didn’t report to a credit reference agency at all, the debt collector should apply the same ICO rule that the original lender would have used.
CCJs
If you have had a CCJ registered for that debt, the default date must be earlier than the date of the CCJ.
The CCJ will stay on your credit record for 6 years, so the original debt will have dropped off before the CCJ goes.
Insolvency
If you have gone bankrupt, had an IVA or Debt Relief Order(DRO) then the default dates of the debts in your insolvency must not be later than the date the insolvency started. This is covered in detail in these articles:
- Repair your credit record after Bankruptcy;
- Repair your credit record after an IVA;
- Repair your credit record after a DRO.
Mortgages
Mortgages and other secured loans are an exception to the general “3-6 months in arrears” guidelines. In 2007 the ICO issued technical guidance on Filing Defaults With Credit Reference Agencies, see paragraph 14 for this specific area.
A mortgage lender has much more discretion on when to record a default, but it should generally not be later than six months after any repossession.
Only the first default date for a debt matters
Once a debt has been marked as defaulted, your credit file will normally show a default marker every month afterwards until the debt is settled. That looks dreadful on your credit reports! But in the credit score calculations, it is only counted as one default.
So when people talk about “the default date for a debt”, it is the first default date that matters. Not the ones afterwards. The whole debt will disappear six years after the first default.
What can you do if a default date looks wrong?
For some examples of how these principles have been applied in practice, see these case studies that the Financial Ombudsman has reported. They should give you a better feel for whether you can get your credit record changed.
To correct a problem with a default on your credit file you should write/email the lender (or the debt collection agency if your debt has been sold by the original lender), putting COMPLAINT as the subject, explaining why you think it is wrong.
Don’t just copy out the guidance above, add the facts and dates which relate to your specific case. Some common examples would be:
- “I first missed payments to this debt in early 2013 and set up an arrangement to pay in June 2013”,
- “I never received the December 2014 bill as I had moved house”,
- “I only made token payments from 2012” etc.
Then say what you think should happen to your credit record, do you want it deleted, added, or changed to be earlier? For example:
- “Please delete the default date because I was never three months in arrears according to the ICO rules.”
- “You never contacted me to say the account was in arrears so it is unreasonable to have added a default. I had later accounts with you so you knew my contact details. I paid the debt as soon as I found out about it.”
- “I would like you to add a default date in November 2012 in accordance with the ICO rules.”
- “According to the ICO rules the default date of September 2015 is too late and I would like you to change it to May 2012.”
- “[name of original lender] added a default in 2010, this has since dropped off my credit record. You should be using that same date, so please correct it.”
The credit reference agencies only report what they are told by the creditors, so complain to the creditor not Experian etc.
If you haven’t had your complaint to the lender sorted within 8 weeks, sent it to the Financial Ombudsman.
Be careful – will doing this “reset the clock”?
If you haven’t made any payments to a debt for years and you are hoping it will get to the 6 years point so the debt is statute-barred, it is probably best not to contact the lender at all. If you ask them to change the date then this will acknowledge the debt and “reset the clock”. See Questions about Statute-barred debt for more information as the conditions for some debts becoming statute-barred have changed in January 2019.
But also read No calls all letters about a debt for years? Is very common for you to be contacted about an old debt just a few months before it reaches the 6-year statute-barred point. So unless this is very close, it’s probably not worth hoping this will happen and it’s better to get the default date sorted.
If the debt is already statute-barred (are you absolutely sure? read the above article) then you can safely ask for the default date to be changed as once a debt is statute-barred it will always remain barred.
Important – sometimes a default is good news!
Defaults sound bad, right? So getting one removed must be good?
This is probably the most confusing thing of all, but No!
It can often be better to have a default on your credit record. If there is a default against a debt, then the whole debt will “drop off” your file after six years, even if you haven’t repaid the debt. With no default, the record will not go away until six years after it is marked as settled/satisfied in some way.
So don’t rush into trying to get a default removed… and never try to get a default date changed to a later one because it will wreck your credit record for longer!
Your credit record isn’t the only thing that matters
You may wonder why you should pay a debt at all if it will go from your credit record after 6 years if you don’t pay it. There are two good reasons:
- it stops the creditor going to court for a CCJ, which would harm your credit record for another 6 years
- seeing that problem debt is settled makes other lenders more likely to give you credit.
Even though it’s good for your credit score when defaults disappear, the debts still legally exist. See Do I have to pay a debt that isn’t on my credit record? for more details.
A credit record default is NOT the same as a “Default Notices”
This article has looked at when a creditor marks your debt as “in default” with one of the credit reference agencies.
Confusingly, the word “default” is also used in the term “Default Notice”. Under the Consumer Credit Act, a lender has to send you a Default Notice before taking you to court over an unpaid consumer credit debt such as a loan or a credit card. This has nothing to do with informing a credit reference agency that your debt is in default – your credit file may be marked as in default even if the creditor has no intention of taking court action.
If you have read things like the lender has to send you a Default Notice 14 days before starting court action and if you pay the debt in full within this time the lender can’t go to court these aren’t referring to credit records at all. Anywhere you read the phrase Default Notice you are probably looking at information about possible CCJs, not credit records.
How much will my credit score change if…
FAQs on statute barred debt
When can you get a default deleted?
Anna says
Hi
I defaulted in 2009 on two credit cards I have been paying them ever since. I lost my job due to corona and had to freeze payments. My partner has offered to settle these two debts one thats £2900 for £1500 settlement (it was a £11k debt). But the advisor told me it would go back on my credit file as partially settled. The whole thing has effected my life so massively and I’ve finally got a good credit rating I dot want to go backwards. Is this true it can reappear on my credit file?
Sara (Debt Camel) says
Who is the current creditor?
vaughan says
I would personally take the settlment. The partially settled would not really effect your cedit file anymore than the default. If the default has already dropped than it really does not matter. Keep in mind if you are using a DMP then they will get a kickback the longer you pay the debt
Sara (Debt Camel) says
The debt will never reappear on her credit record.
BUT if the debt has been sold to a debt collector, it is well worth asking the creditor to produce the CCA agreement before settling it – if the CCA agreement cannot be produced then the debt is unenforceable in court and there is no need to pay anything at all.
colin S says
Hi ALL,
I am looking for some much need help. I completed my DAS scheme early in 2018 ( started April 2014) , however BOS Credit card has never defaulted my account and as such still on my credit report more than 6years after the agreement date.
Now this impacting mortgage applications. I saw that a lady called Angela back in July commented to discuss a similar case.
I am looking for some help to close it out , the bank just keep pushing me around different departments with no progress and the DAS team cant help as I have completed my scheme .
if anyone can help I would be so grateful
Mrs Angela Kazmierczak says
Hi Colin. We had success in a DAS case after it had completed and there was still a debt showing on the credit file. The DAS took over 6 years to complete so we wrote to the creditor and quoted the Information Commissioner Guidance in reporting arrears. “In normal circumstances lenders will be notified when the debt that is owed to them is to be included in an insolvency e.g. bankruptcy, IVA or similar and should be marked as included in that by filing a default as soon as is practical.” We argued that DAS should be considered as similar. As your DAS started in April 2014 there is an argument to made that they should have defaulted the account at that point. There is no guarantee they will agree to do this though worth trying. You may also want to raise this as a complaint with BOS as that should ensure its gets dealt with and your not passed to different departments.
Evie says
Hello I was hoping for a bit of advice.
I have two old accounts with shop direct – both went into a DMP into 2012. I am wondering when the default should have applied as it is still a live debt on my record. Should it not have been defaulted and dropped off ? I’m asking as I’ve been trying to make full and final offers which they won’t accept and are threatening to default now which to me seems incorrect ?
Thank you very much.
Sara (Debt Camel) says
are the accounts still with shop direct or have they been sold?
Evie says
Hi sorry for the late reply. They are still with shop direct.
I also have another one with PRA group that was defaulted by Barclays in 2014 but still showing as live in my credit record – is that correct ?
Thank you so much!
Sara (Debt Camel) says
You could ask them to add a default back in 2012 as the article above suggests.
Shaz says
Hi, Been in a DMP since April 2017. Avant Credit didn’t default the account in 2017. I sent an email to offer a settlement figure in April 2020 but didn’t receive a reply back so just forgot about that settlement offer and carried on paying my DMP. I received a default notice on 18 November 2020 so when I rang to query, I was told that the letter was sent in error and to ignore it as I’m in a DMP. Today I received a call from Avant Credit regarding my settlement offer which has been accepted, however when she mentioned that it would reflect as satisfied with partial settlement and would remain on my credit report for 6 years, as the account was defaulted on 18/12/20. I explained that i tested positive for Covid-19 on 25 November 2020 and been on sick pay since so i would have explained due to my personal circumstances i was unable to pay the arrears but was advised to ignore the default notice. I’ve raised a complaint however just wondering if the default can be backdated to when I entered the DMP?
Thanks
Sara (Debt Camel) says
Yes it can
Mathew Harrington says
I entered in to a credit agreement with creation finance for a Bed back in Dec 2012, I had needed to go in to a DMP paying token payments (£1) from June 2013, i was making these until May 2016 when they sold the debt on to Lowell, and then registered the default, I was then able to pay off the debt with lowell. My credit file has the default on it for another year and 5 month. I’ve called Creation to see if the default date can be moved and they said it only registered as a default when the sell the debt on. Can I challenge this and should the default date be in 2013? I’m trying to get a mortgage and don’t want this to impact me.
Sara (Debt Camel) says
Has the debt been paid off?
Mathew says
Hi Sara, yes been paid off with the debt company, now at £0 on my credit file
Sara (Debt Camel) says
Yes, as the article above says you can send them a complaint and quote the SCOR rules.. Then send it to the ombudsman if they don’t change it.
Tim says
Hi,
Apologies I can’t seem to find the answer (as much as I have looked and searched)…
Do the 3-6 months arrears default registering also apply to monthly mobile phone contracts? I had a default applied almost 24 months after a last payment on a mobile phone contract which at the moment is the difference between it being off my credit file.
Thanks!
Sara (Debt Camel) says
Yes it does
Jo says
Hi Sarah, All the best for Xmas and New Year (before I continue)
Just after some guidance please. I entered a DMP in Jan 2019 and am now so pleased I am nearly debt free (or will be in a couple of months). I have been looking through my 3 credit reports – I have one CC – defaulted but showing twice – 1st by original CC company and again by the collectors – all show the same date, however should this now be showing just once?
I have another passed on the debt in the early stages, never appeared on any CR until August 20, with a default that I diidnt even know about so I am going to negotiate with them to backdate it (as I do stil owe them a couple of payments). OK now 2 loan accounts (now settled) no defaults – 1 has AP markers then settled – the other just says deliquent ( have a couple of payments to make on this one also). Would you suggest i try get default applied on both? I am presuming the drop off date on those would be 6 years from my last payment (as opposed to any default date I could get?) – any advice would be appreciated. How would creditors feel about being asked to apply or backdate a default on an already settled account? Thanks in advance.
Sara (Debt Camel) says
should this now be showing just once?
No this is normal. Only one of them is counted for your credit scoring.
It isn’t easy to say what you should do as your DMP was so short. The non defaulted debts will drop off 6 years after the settlement date. Is it worth trying to get a default added to them which will drop off a bit sooner but which will damage your credit record more until it goes? No simple answer.
Michael says
Hi.
I have a default dated Feb 2015 so I believe this will vanish next month. However for the past 4 years I have been paying a credit agency £50 monthly to clear this. The balance is now around £2000, will the payments continue after next month? Thanks.
Sara (Debt Camel) says
yes. See https://debtcamel.co.uk/debt-not-on-my-credit-file/
BUT what sort of debt was this originally – credit card, catalogue, loan. overdraft, mobile or what?
Michael says
Thankyou for your answer. It was a credit card with Vanquis who sold the debt to Lowell.
Sara (Debt Camel) says
Then I suggest you read https://debtcamel.co.uk/ask-cca-agreement-for-debt/ – that may help you but it’s not guaranteed to work.
Michael says
Thanks again. Can I please check however, if the default date is shown as Feb 2015 and I have made monthly payments for a couple of years, will this defaults vanish from my credit report next month, even if I continue paying monthly?
Sara (Debt Camel) says
Yes.
Laura says
Hello,
I am about to enter debt management plans with 3 different creditors…however I have been contacted by one of them offering a partial settlement, which has got me thinking in regards to what you talk about with default dates.
If I take that offer should I ask that creditor to add a default back in June 2020 after I missed 3 payments? Meaning the debt would drop from my file June 2026 rather than at the end of the settlement payment plan (Which would be Feb 2022, meaning a drop off date Feb 2028)
Also if I proceed the DMP with the other two creditors with a very hopeful view of offering them a final settlement in the future too…would I be best to ask them also to add a default to my accounts when I first missed 3 payments (again June 2020) Therefore the debt would drop off my file in June 2026 if I was to get settlement offers next year? Thank you.
Sara (Debt Camel) says
If I take that offer should I ask that creditor to add a default back in June 2020 after I missed 3 payments? Meaning the debt would drop from my file June 2026 rather than at the end of the settlement payment plan (Which would be Feb 2022, meaning a drop off date Feb 2028)
It’s not clear to me that that is a good idea. A default until 2026 is much worse than a payment arrangement that ended in 2022. Is that worth it for the extra two years 26-28 where the default will be gone but a pretty old payment arrangement will remain?
Defaults are best if the payments arrangement takes a long while, not if it will be short.
Laura says
Sorry, my post was unclear there. The payment arrangement ending in 2022 is the partial settlement offer which they have offered over 12 monthly payments. So I was wondering if I should ask for an earlier default date before entering a settlement plan…otherwise the settled date would be 2022…then the 6 years on top of that on my file.
The debt management plans I would set up would probably last years and years as I can only pay about £100 a month and I owe £23k across the 3 creditors.
I haven’t had a default on any of them yet (they have written with default notices) and then the accounts have been put on hold due to financial difficulty. I was just unsure if I was best to ask for a default dated 2020 rather than paying the debt over years and years and then hopefully getting a settlement for these other debts too. So I guess two different issues here. Sorry for the confusion. Thank you for your advice.
Sara (Debt Camel) says
So the debts haven’t been sold to a debt collector yet? You won’t normally get a good settlement offer until they are.
Are you renting or buying?
Laura says
The debt has bene sold from 1 of the 3 creditors (Amex) I am renting at present.
I am just unsure if I should ask the other 2 to default me now before I enter a DMP directly with them (Barclays and RBS) or should I wait and see if I can do a partial settlement with them in the future. That is if a settlement looks better than a default on my file.
I was considering a partial settlement with Amex which would bring my debt below 20k and then doing a DRO – however I have read that that still looks really bad even after the 6 years?
Sara (Debt Camel) says
You got lucky with Amex. Original lenders do not normally offer low settlements quickly unless there is a good reason why you are unlikely to ever work again. Hoping for this to happen quickly with Barclays and RBS may well not work.
Insolvency – DRO or bankruptcy (as you are renting it is very unlikely an IVA would be better for you – especially as you have to pay more over a longer period and 30% or more of IVAs fail, leaving you back with your debts) are well worth looking at to get certainty now.
A DRO is not visible to lenders after 6 years. Unless one of their debts was included withion it – so Barclays say may be able to see this debt for as long as their internal systems hold the records.
(Exactly the same applies to Bankruptcy and an IVA, the other two forms of insolvence. They are all very visible for 6 years and then not. Mortgage lenders tend to ask if you have ever been insolvent (DRO and IVA the same as bankruptcy – bankruptcy is not worse) but plenty don’t mind if you have – you can get a mortgage after insolvency.)
A partial settlement with Amex will make it difficult to get a DRO for a while as it may be seen as giving preference to one creditor over another. Also if you can really afford £100 a month you may not qualify for a DRO – but I have seen a lot of people overestimate what they can afford to pay… Bankruptcy may be a simpler option for you now.
I suggest you should take debt advice on your situation. Phone National Debtline on 0808 808 4000 and they can look in detail at how much you can afford each month, whether you would qualify for a DRO and what the pros and cons of the different solutions are. It is your choice then what you want to go for, but it will be a an informed choice.
Laura says
Hi Sara, I have just got off the phone with Step Change who have said that a DMP isn’t ideal given my debt and available money each month. They gave me the option of IVA or Bankruptcy.
I spoke with citizens advice last year and after their advice I don’t fancy the IVA option.
I was hoping if I didn’t get a DMP that I could reduce the debt to under 20k to apply for a DRO.
You mentioned previously that I wouldn’t probably get a DRO if I paid a creditor as preferential payment.
What if I was to have a gift of money from a family member to partially settle the Amex debt then the outstanding amount would be under 20k. Would you then think I could apply for the DRO? My budget plan with Citizens advice leave me with under £50 a month and I have no assets.
Alternatively, should I go for the bankruptcy now and clear them all?…I dot know which is worse for me long term. :-(
Also, the discussion of the default date being put on earleir…is this still applicable for DRO and Bankruptcy, or are they their own 6 year markers? Hope you can help. Thanks
Sara (Debt Camel) says
As you have no assets you are quite right to reject an IVA. It has no advanatges over bankruptcy for you – you will have to pay more over a longer period and a lot of IVAs fail leaving you back with the debts – bankruptcy doesn’t.
If a relative gives you the money to pay off the Amex offer, then that should not count as “preference” so a DRO should be allowed.
But is this your best option?
Can I ask how much this gift from a relative would be?
You are renting I assume – is this private rented or council/housing association?
Do you have a real chance (not a daydream) of getting a much better-paid job in the next year? Next three years?
Laura says
Thanks for replying again.
It would be 3k to pay the settlement. It was a 6k card and they have offered 3k settlement.
Yes I am a renter. Not sure on the job front. I don’t earn a terrible wage (25k) but I don’t see that going a great deal higher in the next few years. Maybe a new position in another company but only a couple of k where I am currently employed.
My other thoughts were to try and arrange a payment plan with the other two creditors and accept the settlement for the third. It would take longer to clear the debt but no bankruptcy or dro. I have just found out that Amex did default me in September too.
Sara (Debt Camel) says
You have advice from StepChange that a DMP is not that good an idea and that insolvency is better. To me that feels right as these are very recent defaulted debts. Paying £100 a month is going to takje a very long while to clear them and you aren’t likely to get low settlement offers from the other two debts for quite a while, better to get certainty.
If you qualify for a DRO – and I am not sure if you have been given clear advice on this, if you want to go for this you need to make sure you will be eligible for it if you get the debt total below £20k – then you have to choose between a DRO and bankruptcy.
In terms of your credit record and chance of a mortgage after 6 years then they are really much the same. (As as an IVA, but there seems no reason for you to choose that risker route that will mean you have to make payments for 5 years.)
Bankruptcy would have the advantage that you only have to have a gift of the bankruptcy fee of £680 from your relative, not 6k. That seems to me to be significant.
But I think you should go back to StepChange and talk through the DRO option with them and see what they say.
Kirsten says
Hello,
I was hoping someone could help me.
I am in the process of applying for my first mortgage with my partner, sadly after trying to obtain a mortgage in principle, our mortgage advisor informed of an defaulted account dated April 2019 from an old student overdraft from Barclays, who passed on the debt to Moorgroup, the outstanding balance was paid and is currently showing as satisfactory on my credit score. The balance was paid January 2020.
My question is can I contact the original lender and ask them for a ‘goodwill adjustment’ as accordingly to my mortgage advisor this is preventing me from obtaining a normal mortgage. I don’t want to go down the alternate lender route, as I don’t want to get into the same situation I found myself previously struggling to make payments. I first took the overdraft out by in 2015.
Any suggestions or help would be much appreciated. Thanks
Sara (Debt Camel) says
Was the amount tiny?
Were you unaware of it before jan 2020?
You are quite right to want to avoid alternate lenders.
Helen Ford says
Hi, I wonder if someone could give me some advice.
I went into Scottish trust deed in July 2014, in 2018 the trust deed was completed. Last year a default notice was added to my credit file for Barclays partner finance with a default date of October 2015, this debt was in my trust deed. I have contacted the creditors and they won’t acknowledge that the default date is wrong, my last payment i made to them was 10/6/2014 and I entered my trust deed in the July 2014. i have just applied for a mortgage and have been declined because of this. I have checked my credit report with three different credit agencies and they all have a different default date for the account. Any help would be appreciated Thanks
Sara (Debt Camel) says
Can I suggest you ask this on this specialist Scottish Debt Advice site: https://www.advicescotland.com/home/protected-trust-deed/