An unsatisfied default is one that has not been paid off, so your credit file shows an outstanding balance rather than a nil one. It can still be possible to remortgage, but some lenders that would consider a settled default are more cautious about an unpaid one, and a few ask for it to be cleared before or on completion. What matters most is usually the amount still owed, how old the default is and whether you have an agreed plan to pay it.
This page looks at what "unsatisfied" actually means, whether to clear it before you apply or let it be paid through the remortgage, and what to do if a creditor is still chasing you. Our main page on remortgaging with defaults covers 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.
- Status
- Not yet settledOutstanding balances usually narrow the options, and some lenders may expect them to be cleared as part of a remortgage.
Read the main guide: Remortgaging with defaults on your credit file
In short
- An unsatisfied default shows an outstanding balance rather than one that has been paid.
- It stays on your file for 6 years from the default date, the same as a settled one.
- Some lenders may ask for an unsatisfied default to be cleared before or on completion.
- An agreed repayment plan can help, but the account stays unsatisfied until the balance reaches nil.
Your home may be repossessed if you do not keep up repayments on your mortgage. Think carefully before securing other debts against your home. Borrowing over a longer term can mean paying back more in total.
What does an unsatisfied default mean?
When a default is registered, it starts life unsatisfied, showing the balance the creditor says is owed. It stays that way until the debt is paid in full, at which point it should be updated to satisfied or settled. If you have not paid anything, or you are partway through a repayment plan, the default usually remains unsatisfied, even if the balance has come down.
| Status shown | What it usually means | How long it stays |
|---|---|---|
| Unsatisfied, with a balance | Nothing paid, or a balance still owed | 6 years from the default date |
| Unsatisfied, balance reducing | Payments being made but not yet complete | 6 years from the default date |
| Satisfied or settled | Paid in full | 6 years from the default date |
Wording varies between Experian, Equifax and TransUnion. The 6-year period is the same regardless of status.
Does an unpaid default rule out a remortgage?
Not necessarily, but it usually narrows the choice more than a settled default would. Some lenders decline any application with an unsatisfied default over a certain amount, others will lend but expect it to be cleared as a condition of the mortgage, and some look at the whole picture, including the amount, the account type and how old it is, without an automatic rule either way.
The outstanding balance can also count against you in affordability, particularly if you are still making payments towards it, because that commitment reduces what you have left each month for a mortgage payment.
Should you clear it before applying or as part of the remortgage?
There is no single right answer, and it usually depends on how much is owed and where the money would come from.
- Paying it off first, from savings or otherwise. This turns the default to satisfied before you apply, which can widen your choice of lender straight away.
- Clearing it from the funds raised in the remortgage. Some lenders that require adverse credit debts to be cleared on completion will arrange for this to happen automatically, so the default shows as settled once the mortgage completes.
- Agreeing a payment plan with the creditor now. This does not settle the default, but it shows the debt is being managed, which some lenders may still take into account.
Clearing debt through a remortgage means it becomes secured on your home rather than remaining an unsecured default, so weigh that against simply paying it off separately if you can. Our page on debt consolidation remortgages sets out the risks in more detail.
What if the creditor is still contacting you?
An unsatisfied default often means the original creditor, or a debt collector that has since bought the debt, is still trying to recover it. You may get letters, calls or texts. You do not have to deal with this alone.
- Check the debt is genuinely yours and the amount is correct before agreeing to anything
- Ask for the default date to confirm how long it has left on your file
- Get free advice from National Debtline or StepChange before agreeing a settlement figure
- Get any agreement to pay, or to accept less than the full amount, confirmed in writing
If several debts are unsatisfied, or you are struggling to keep up with payments generally, National Debtline and StepChange offer free, confidential advice on your options, including whether a debt management plan might help.
What lenders may weigh with an unsatisfied default
| Factor | Why it matters |
|---|---|
| Outstanding balance | How much is still owed. A small unpaid amount is often viewed differently from a large one. |
| Age of the default | How long the balance has remained unpaid, alongside the default date itself. |
| Repayment plan | Whether there is an agreed plan, and whether payments are being kept up. |
| Type of account | A utility default left unpaid may be viewed differently from an unpaid default on a loan or credit card. |
| Number of unsatisfied entries | Several unpaid defaults can suggest an ongoing problem rather than a single unresolved debt. |
| Mortgage payment history | Whether your mortgage has stayed up to date while this default remains unpaid. |
| Affordability | Any ongoing repayment plan counts as a commitment when assessing what you can afford. |
| Loan to value | More equity can give lenders more comfort with an unsatisfied balance on file. |
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 outstanding balance, creditor and default date
- Details of any repayment plan and how much has been paid so far
- Whether you intend to clear the balance before, during or after the remortgage
- Your mortgage balance, deal end date and any early repayment charges
- Proof of income and your regular outgoings, including any repayment plan
Frequently asked questions
Will an unsatisfied default stop me getting a mortgage completely?
Not necessarily, though it can reduce your choice of lender more than a settled default would. Some lenders will lend with an unpaid default, others require it to be cleared, and some decide case by case based on the amount and account type.
What is the difference between unsatisfied and partially settled?
Unsatisfied usually means nothing has been paid, or payments are still ongoing and the balance has not reached nil. Partially settled means the creditor agreed to accept less than the full amount and the account has been closed on that basis. See partially settled defaults for more.
Can I remortgage while I am still on a payment plan for a default?
It can be possible. The default stays unsatisfied until the balance reaches nil, and the monthly payments count as a commitment when a lender checks affordability. An adviser can help you weigh keeping the plan against clearing it through the remortgage.
Does paying off an unsatisfied default straight away help my application?
It can. Changing the status to satisfied removes an outstanding balance from your file and can widen your choice of lender, even though it does not shorten the 6 years the default stays on record.