A default badly damages your credit score, so how long will it be there? 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 2015 will drop off your credit record in May 2021.
So the default date is very important!
The longer ago the default date 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.
When should a default be added to a credit record?
The Information Commissioner’s Office (ICO) says :
“As a general guide, [a default may be recorded] 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 ICO 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 bad! 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.
But stop and think – 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.
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!
Remember: 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.
Don’t get confused with “Default Notices”
This article has looked at when a creditor marks your debt as “in default” with one of the credit reference agencies. The word “default” is also used in the term “Default Notice”. A lender has to send you a Default Notice before taking you to court over an unpaid debt. 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 CCJs, not credit records.
How much will my credit score change if…
FAQs on statute barred debt
When can you get a default deleted?
Haffy says
Hi Sara
Hope you can help, I have a default on my credit score for £35 from Aug 2017. Not sure who the original debtor is, currently with debt collectors. Due to the amount and date assuming it is form EE, possibly last payment for a contract that I cancelled. If the debt is owed I do not mind paying it but is there anyway I can delete the default. Feel it Is harsh to have a default for such a low amount for another 3 years (and the only one currently still on my credit file)
I also have a CCJ that is over 6 years old and no longer showing on my credit report, If I start making payments, or arrange a payment plan with the debtor, will the debt or payment plan start showing up on my credit score.
I will be grateful for any advice you can give me. Thanks
Sara (Debt Camel) says
You need a reason to argue there should not have been a default, see https://debtcamel.co.uk/get-rid-of-a-default/
Dave says
I have a DMP in place for some old debts that has been running for a few years and has been going ok, but recently one of these debts was purchased by a company called coast finance. They now have put the debt back on my credit report even though the default date is 2007 and it was on my credit report for 6 years and dropped off, and they have also recently put on the report hat i have missed recent payments and missed multiple payments even though i have not as the debt management company pays them for me.
It has smashed my credit score by 64 points this month and to someone looking at my credit record it looks like i have just had this debt and started defaulting on it even though it is 13 years old. What can i do as i have been working hard to rebuild my score but this company seems hell bent on hammering me all the time.
Sara (Debt Camel) says
So two things. First send Coast (what is the full legal name of the company?) a written complaint – email is best – telling them to remove the default from your credit record as the debt had a default added many years ago (give the date if you know it) and a second default cannot be added. Send the complaint to the Financial Ombudsman if they don’t agree within 8 weeks.
Second read https://debtcamel.co.uk/ask-cca-agreement-for-debt/ and think which of these very old debts you coukd ask for the CCA for!
S Smith says
Hi Sara,
I had a default registered in April 2017 by 118118 money, I missed 2 payments and then got in touch with them to continue making payments on my account. They then issued a default. Can they do this for only 2 missed payments, I thought the ICO rules stated that it was 3-6mths? I contacted the financial Ombudsman Service and a woman looked at my case who agreed with the lender and said they are within their rights to put a default on my credit file even if it is for 2 missed payments. She then said that I could refer my case to the ombudsman to look at but it’s unlikely that they’ll change their decision and will agree with her. So I accepted her decision. Reading here has made me realise that perhaps she gave me the wrong information and that I should have gone to an ombudsman, do you think she is right in what she advised me about the lender being able to put a default on after 2 missed payments and is it too late to ask someone to re-open my case to review? My case was closed in January 2019. Am I now stuck with the default because I took poor advice from the adjudicator?
Sara (Debt Camel) says
Did you repay the arrears of 2 months? Or just started making the normal payments again?
A Smith says
I started making normal payments but this was after I’d contacted the lender. I didn’t realise my account was in arrears and I’d contacted them straight away, but the repayments I’d made I thought was repaying the missed payments but it seemed like they had not allocated it to clearing those missed payments. Can the lender do this?
Sara (Debt Camel) says
But if your repayments just cleared the missed payments you would be behind on the new ones you should have been making…
You may be able to complain that the lender did not explain clearly to you what you had To do to get your account back in order and not get a default.
S Smith says
Thank you, but is this too late for me to do this if an adjudicator looked at my case ? She didn’t explain this to me and made out that an ombudsman is unlikely to come to a different conclusion and therefore I accepted her decision. Would it be possible for me to get this case reopened or is this now too late? That same adjudicator is looking at my case again because there has been an issue with the original default so she is trying to resolve that but I’m it sure if they will reopen my case again if I asked. Do you know if any cases where this has happened and the ombudsman will re-open cases that were settled at adjudicator level?
Sara (Debt Camel) says
“That same adjudicator is looking at my case again because there has been an issue with the original default “
what original default? you can only have one default on a credit record.
This 118 loan – have the repayments cause you a lot of problems? If they did, then you may be able to make an affordability complaint? See https://debtcamel.co.uk/refunds-large-high-cost-loans/. If you win that, any negative information should be deleted from your credit record.
C D James says
Hi Sara,
I discovered I had a CCJ by default I knew nothing about, for a debt I knew nothing about and I applied for the CCJ to be set aside.
The “alleged” debt Information:
– Original Barclays Bank PLs credit Card – £3,5**.**
– Opened May 2014
– Last payment made July 2014
– First late payment notice September 2014
– First default notice October 2014
– Passed to Robinson Way
– Sold to Hoist Portfolio
– Defended by Howard Cowan Solicitors
– No payments or any other contact has been made to anyone since the last payment which is july 2014.
– The addresses supplied are all unknown addresses and the account name simply states C D James which could be anyone.
I do not recall having a this account and no contact was made in six years since the last payment / first default notice. HC have sent a request to have the set aside thrown out due to “not having a realistic chance of success” even though all the information they have provided is for incorrect addresses. My question is that I do not believe this debt is mine, I’m due to be in court in 4 days time. Can I just continue to ignore HC and let the courts deal with the matter? Do they even have a chance as the debt is most likely statute barred, provided any substantial evidence of a signed contract or complied with Consumer Credit Act by sending me correct default notices?
Sara (Debt Camel) says
I cannot give you advice on how to conduct a court case. I suggest you talk to National Debtline on 0808 808 4000 and also consider posting on Legal Beagles as the time is very tight for this https://legalbeagles.info/forums/forum/legal-forums/court-claims-and-issues
Things you should make clear when you talk to National Debtline or on Legal Beagles to maximise the chance of you getting the most helpful feedback:
– exactly what you put on your set aside application
– whether you have ever had a Barclays bank account
– whether you have proof of where you have lived since 2014.
I can’t see that an argument about statute barring is going to apply as it has not yet been 6 years since the last payment and anyway the statute barring clock stops at the point they applied for the CCJ.
Ian says
Hi
I’m 3 months into a debit relief order, I’ve noticed my accounts are starting to default with incorrect dates, which is fine for now as I’ve still got 9 months to go.
However I’ve changed my name by Deed poll since the DRO was granted, and my DRO has been updated to show my new name and I’ve had updated paperwork, and my entry on the register shows my previous name, so all good there
6 of my creditors are refusing to update my accounts with my new name because they’re in default or have been passed to collections agencys and I’m wondering what I should do
Should I insist they change the name as I’m legally not allowed to use my old name, although I’m not using the accounts as they’re in the DRO, or should I wait til I’m discharged from my DRO, then when i’m doing my credit file cleanup, send them the DRO in my new name showing them as a creditor, a copy of the discharge which will be in my new name, and also the deed poll
I’m just concerned as my DRO is in my new name, and my 13 creditors are a combination of old and new name, and it might complicate things in 9 months
Thanks
Sara (Debt Camel) says
I think at the moment you should just wait until your DRO has ended. Lenders and debt collectors are very overloaded at the moment, this is a routine problem that can get sorted later, ignoring it now won’t do you any harm.
Ffionpearl says
Hi
I’m wondering if anyone knows the rules on adding interest after default. In my experience it doesn’t happen unless creditor has a CCJ. So I thought that once an account defaulted it was “dead” and no more interest and charges could be applied unless the original agreement allowed for it. I’ve just had (a case of) a Very debt passed to Lowell. Default balance is considerably less than current balance. Lowell say Very added interest after the default date.. Can this happen? And if Lowell do not have the original agreement (which may or may not say that interest can be added) can they still rely on the balance that includes the post-default interest? (Lowell have not sought a CCJ and [of course] Very didn’t either)
Sara (Debt Camel) says
Most creditors stop adding interest after a default but I am not aware of any law or regulation that says they have to.
You could challenge Very about whether adding the interest was treating your client fairly. But it may be simpler to ask Lowell to produce the CCA agreement for the debt – if they can’t it doesn’t really matter how large the balance is as it is unenforceable.
Ffionpearl says
Hi
Yes, thank you, you have confirmed pretty much what i thought. Re the CCA, i’m trying to get this balance down so she can get in to a DRO. The extra interest puts her over the limit. So it will be a matter of challenging Lowell (or Very) on the added interest.
Mr Richard says
I have now repaid almost all of my debts and have left my plan with Stepchange. Personally given my circumstances, I feel I should have been offered a IVA. The plan was started in 2010. I am paying 2 out of the 3 as one is yet to respnd to a request for information. I want to make an offer for the other 2 but a recent letter said that if a partial settlement is made, it will be recorded on my credit file. I cannot risk this as my credit score is now good and I want to move to a house that is more suitable for my health needs, due to disability and a stroke. An entry on my record will jeopodise this.
Sara (Debt Camel) says
a debt will not reappear on your credit record if you make a partial settlement. But you could simply stop paying if the debt collector cannot produce the CCA.
Mr Richard says
Thanks Sarah, I thought that was the case. Another attempt to frighten me into paying the full amount I suspect. I will write back and point this out to them. I was trying to claim back PPI from them about 2 years ago, but they failed to supply proof of payments or statements and now it is too late.
David says
I defaulted on a credit card debt of £7500 about 10 years ago. I went through the six years of having a default on my credit file and I’ve been paying £1.00 a month to the credit card company for the past four or five years as they suggested. Can they still come after me at any time in the future for the full amount, or has the default wiped out the debt completely?
Sara (Debt Camel) says
has the debt been sold to a debt collector?
David says
No they haven’t. I spoke to the credit-card company only yesterday, and asked for the debt to be written off, as I will never be able to pay it off. They at first refused, but are now looking into my account history with them, which goes back about 12 years or more. I’m worried that I’ve now stirred up a hornets nest, after having quietly paid just £1 a month for the last four or five years.
Sara (Debt Camel) says
That’s odd – can you say which the credit card is?
I assume you can’t afford to pay more than a token payment? Are you buying or renting? Do you have other problem debts?
PS can i check you live in England? this website is only for British debt problems
David says
The card company is Capital One and yes I live in the UK, with a mortgage and other much smaller debts.
They’ve always been very understanding, since I first told them I was unable to pay the monthly payments 10 or more years ago. They suggested defaulting me and then just paying £1 per month thereafter. Obviously I don’t mind this arrangement, but I’d rather the debt was just wiped off the record completely as it’s preventing me moving on financially, even though the default 6 year period ended about 5 years ago. I still have to declare it as a debt if ever I’m filling in a form. I have explained this to the company and they are going to consider my request of having it removed, but I’m not expecting them to agree. Hence my worry about them still being able to come after me for the money all these years later. Otherwise why wouldn’t they just write off the debt?