A default that is 1 to 2 years old sits in an in-between stage. It is no longer brand new, so the immediate difficulty behind it usually looks further away, but it has not had the years of clean history that can widen your options more. Some specialist lenders that would not consider a default from the last few months may look at one this age, particularly if it is settled and your other accounts have stayed clean since.
This page looks at what tends to change during this second year, whether it is worth waiting for the default to turn 2 or 3, and what to do if your current deal ends in the meantime. Our main page on remortgaging with defaults explains how defaults are dated and recorded.
On this page
This page covers
- Credit issue
- DefaultsUsually stays on your credit file for 6 years from the default date.
- When it happened
- 1 to 2 years agoWith each year that passes without new problems, more lenders may be willing to consider an application.
Read the main guide: Remortgaging with defaults on your credit file
In short
- A default 1 to 2 years old is past its hardest period, but choice is usually still narrower than for an older, settled entry.
- A clean run on your other accounts during this year matters as much as the default itself.
- Waiting can widen your options, but it may mean time on a higher standard variable rate.
- Check the default date and status now, so nothing is left to sort out closer to your application.
What tends to change during the second year?
Lenders that consider adverse credit generally give the most weight to what has happened recently. As a default moves further into its second year, it stops being the newest thing on your file, especially once a year or more of on-time payments sits between the default and today. That shift does not happen on a fixed date. It builds gradually as the account ages and your record since improves.
| Point reached | What your file tends to show | How it may be viewed |
|---|---|---|
| Just over 1 year | The default, plus a run of clean months building up after it | Still limited, though settled status and a clean record since can help |
| Around 18 months | A longer run of on-time payments since the default | Some specialist lenders may look more favourably on it |
| Approaching 2 years | The default starting to look less recent against the rest of the file | Choice tends to widen further, particularly once it is settled |
For illustration only. These are general tendencies, not the criteria of any lender.
What you do with your other accounts in this window usually matters more than the passage of time on its own. A new missed payment or a fresh default resets the clock on how recent your credit problems look, even if the original default is ageing well.
Is it worth waiting for the default to turn 2 or 3 years old?
There is no single answer. Waiting often widens the pool of lenders and can mean a wider choice of deals, but it has a cost if it means staying on your lender’s standard variable rate (SVR), which is usually higher than a fixed or tracker deal. The right call depends on your deal end date, how much equity you have and whether anything else on your file is also recent.
- Reasons to consider applying now: your deal is ending, no product transfer is on offer, or you need to raise money for a specific purpose.
- Reasons some people wait: the default is settled but still under 18 months old, other credit issues are also recent, or a product transfer covers the gap affordably.
If you have more than one default from around the same time, see remortgaging with multiple defaults, because the pattern across accounts often matters as much as the age of any single one.
What if your current deal ends during this window?
A default 1 to 2 years old often lines up with a fixed deal coming to an end. A product transfer, a new deal with your existing lender, is worth asking about first. Where you are not borrowing more, FCA rules allow lenders to switch existing customers without a full affordability assessment, so a default from a year or two ago may weigh less heavily than it would on a fresh application elsewhere.
If a product transfer is not offered, or you want to compare it with the open market, an adviser can look at what a specialist remortgage might offer at this stage, bearing in mind that rates for adverse credit are often higher than high-street rates. A further advance from your current lender is another route if you need to borrow more.
What should you check before applying at this stage?
Before you approach a lender or adviser, it helps to have an accurate picture of exactly where the default stands and what has happened since.
- the exact default date on each credit report, so you know how long it has left
- whether the default is satisfied, partially settled or still unpaid
- a clean run of payments on every other account since the default
- that any debt sold on to a collection agency still shows the same original date
- that you are on the electoral register at your current address
If the default is still unpaid, our page on unsatisfied defaults explains how that may be viewed. Once it is cleared, see satisfied defaults for what changes.
If you are struggling to keep up with other payments while this default sits on your file, speak to your current lender early and get free advice from MoneyHelper or StepChange before you take on any new borrowing.
What lenders may weigh with a default this age
| Factor | Why it matters |
|---|---|
| Exact default date | The precise number of months matters more at this stage than a rounded figure such as "about a year". |
| Settled or unsatisfied | A settled default is generally viewed more favourably than one still showing a balance owed. |
| Payments since the default | A clean run on every other account through this period shows the problem has not spread. |
| Anything more recent | A newer missed payment or default elsewhere can outweigh the age of this one. |
| Type of account | A utility or phone default may be viewed differently from one on a loan or credit card. |
| Mortgage payment history | Keeping your mortgage up to date through this period can count in your favour. |
| Loan to value and equity | More equity generally gives lenders more comfort with a default at this stage. |
| Affordability | Income measured against your outgoings, stress tested against a higher rate. |
These are general points, not lender rules. Each lender sets and changes its own criteria.
Information an adviser may ask for
You don’t need all of this to make an enquiry. It helps to know where to find it, because an adviser is likely to ask about most of it.
- The exact default date and current status for each account
- A short note on what led to the default and what has changed since
- Bank statements showing a clean run of payments since the default
- Your mortgage balance, deal end date and any early repayment charges
- Whether your current lender has offered a product transfer
- Recent payslips, or accounts and tax calculations if you are self-employed
Frequently asked questions
Does a default become easier to deal with once it turns 1 year old?
It tends to, but there is no fixed point where things change. What usually matters more is a clean run of payments since the default and whether it is settled. A default that is 1 year old with nothing new on the file since is generally viewed more easily than one with a recent missed payment on top.
Should I remortgage now or wait until the default is older?
It depends on your deal end date, equity and whether anything else on your file is recent. Waiting can widen your choice of lender, but it may mean paying your lender’s standard variable rate in the meantime. An adviser can compare the cost of waiting against acting now.
Will paying off the default now help more than waiting?
Paying it does not shorten the 6 years, but it changes the status to settled, which many lenders view more favourably than an unpaid balance. Doing both, paying it and letting it age a little, often gives the widest choice.
Does a default 1 to 2 years old need to be declared on an application?
Application forms usually ask whether you have ever had a default, not only recent ones, so answer honestly regardless of age. A default this age should still show clearly on your credit file, which a lender will check.