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Default

Definition of 'Default'

A Default is recorded by a lender on your Credit Report when a debt greater than $150 becomes more than 60 day’s overdue and where recovery action has commenced.

Defaults stay on your Credit Report for five years, whether repaid or not and will have a serious adverse affect your credit standing.

This is because when assessing future credit applications, a lender will take the view that the past is a guide to the future, and if you have a history of defaults with other lenders, then you will be more likely to default again.

The cost of administering an account which has defaulted is considerable, and will usually result in a loss for the lender, so most lenders will choose not to take that risk.

One of the simplest ways of avoiding a Default is to monitor your Credit Report regularly. If you see late payments being recorded under the positive reporting regime, then you have the chance to do something about it before recovery action commences.

To avoid late payments, arrange to pay the minimum payment on credit cards automatically each month and make further manual payments on top of this. Then, if you forget to pay one month, the automatic payment will prevent a late payment entry on your Credit Report.

Use the links below to locate the term you are looking for. If you can't locate it, please get in touch.

Credit Jargon Starting 'G'

Credit Jargon Starting 'I'

Credit Jargon Starting 'J'

Credit Jargon Starting 'L'

Credit Jargon Starting 'M'

Credit Jargon Starting 'S'

Credit Jargon Starting 'T'

Credit Jargon Starting 'V'

Credit Jargon Starting 'W'

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