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Impact on creditworthiness

Default listings can have a significant impact on a consumer’s creditworthiness. The rules for reporting a default are strict.

When dealing with a consumer who has a default on their credit report, it is important to check that all the necessary requirements for reporting the default have been met. Where they have not been met, the consumer should make a correction request.

Checklist of default requirements:

  • Hardship
    • Is there any indication that the credit provider knew, or ought to have been aware, that the customer was in actual or potential hardship when the default was reported?
    • Was that hardship communicated to the credit provider? How and when?

If all requirements have been met, you should also consider:

  • Is there any other reason why the default should not have been reported?

    The law provides that in ‘circumstances beyond the individual’s control’ a default can be removed, even if all other requirements have been met.

    Examples of ‘circumstances beyond the individual’s control’ include natural disasters and domestic abuse (with the law soon-to-be updated to specifically include domestic abuse as an example).

Digital Agency: SGY