What is a default on your credit file?

A default is a marker added to your credit file when a lender decides that a credit agreement has broken down, usually after several months of missed payments. It’s a step up from a simple late payment marker, and it stays on your file for 6 years from the date it was registered, whether or not the debt is ever paid.

Defaults can appear on loans, credit cards, overdrafts, mobile phone contracts, utility accounts and other credit agreements. A mortgage itself is different again, and serious mortgage arrears are covered separately on our mortgage arrears page.

How is a default different from a missed payment marker?

Most credit agreements record a late or missed payment marker each month you fall behind, usually shown as a number from 1 to 6 representing how many months in arrears you are. A default is a different, more serious entry that a lender adds once it decides the relationship has broken down rather than being a temporary hiccup.

Our guide on how long missed payments stay on your credit file covers that earlier stage in more detail.

When does a default get registered?

Based on Information Commissioner’s Office (ICO) guidance, lenders normally register a default once an account is around 3 to 6 months in arrears, though mortgage lenders generally have more discretion over the exact timing. Before that point, a lender is expected to send a formal default notice, setting out what you owe and giving you a chance to put things right. Our guide on what a default notice is explains what that letter should contain.

There’s no single day that applies to every account. The default date depends on when that particular lender decided the agreement had broken down, which is why our guide on the default date is worth reading if the exact date matters to you.

Is a default the same as a CCJ?

No, though the two are often connected. A default is added by the original lender to your credit file. A CCJ is a court judgment, made after a creditor takes legal action through the courts, usually because a debt remains unpaid. See our guide on what a CCJ is for how that process works.

Many debts that end up with a CCJ had a default recorded earlier. The default and the CCJ are separate entries with separate dates, and both can appear on the same credit file for the same underlying debt.

What kinds of accounts show defaults?

Defaults can be recorded on most forms of consumer credit, including:

• Credit cards, store cards and catalogue accounts
• Personal loans and overdrafts
• Mobile phone and broadband contracts
• Utility accounts, once the supplier treats the debt as unrecoverable
• Buy now pay later agreements, where the provider reports to a credit reference agency

A debt management plan (DMP) is different again. A DMP is an informal arrangement rather than a public record itself, but the individual accounts included in it may still show defaults, missed payments or arrangement to pay markers, depending on how each creditor reports.

Does the balance shown change over time?

A default usually shows the balance outstanding at the point it was registered, sometimes updated later if you make payments or the debt is settled. It doesn’t grow to reflect ongoing interest or charges in the same way an open, unpaid account might, though this can depend on the type of agreement and whether the creditor continues to add interest after default. If your default shows a balance that looks too high, or doesn’t match payments you’ve made since, that’s worth querying with the lender directly rather than assuming the figure is fixed and correct.

Can you have more than one default?

Yes, and it’s fairly common for several accounts to default around the same time, particularly after a period of illness, job loss or another sudden change in circumstances. Each default is a separate entry with its own date, even if they all relate to the same underlying event. Having multiple defaults doesn’t automatically mean a longer wait before remortgaging, but it’s a factor an adviser will want the full picture on. Our page on remortgaging with defaults covers what tends to matter most when there’s more than one.

What if a debt is sold after it defaults?

Lenders sometimes sell defaulted debts to a debt collection agency. When that happens, the default date should not change, and the debt collector shouldn’t add a second, later default for the same debt. Our guide on what happens when your debt is sold covers what should and shouldn’t change.

What it means if you want to remortgage

A default doesn’t rule out remortgaging, but it’s a factor lenders and advisers will want to know about. What usually matters most is the default date, whether it’s settled, the type of account and how many defaults you have. Our main page on remortgaging with defaults explains what an adviser typically asks for and how those details can affect your options.

If your default is old, check when it drops off using the credit file date calculator, and get your free statutory credit report from Experian, Equifax and TransUnion to check the details are recorded correctly.