Understanding a credit default listing and how to proceed

Elsa Markula

Arca

CEO

Published on: 7 Aug 2026

Recently updated: 11 Aug 2026

If you are struggling with debt and are unable to pay your bills – or you were struggling in the past – you might find that you have a default listed on your credit report. A default is only listed if you missed payments for a long period of time.

Once a default has been listed it does not get removed simply because you pay back the debt.

If you have a default listed, there are still things you can do to improve your credit report:

Repay the debt that led to the default: While the default will still be on your report, your report will also show that it has now been repaid. This will be viewed positively and should help your credit score.

Manage your other debts: Good repayment history on other debts will help improve your credit report and credit score.

Table of contents:

What is a 'default' and why do I receive it?

If you are overdue on a debt, your credit provider might report that to a credit reporting body as a “default”. A default can only be listed on your credit report where certain rules are met and the provider has followed a set process.

Understanding the default listing rules

While each situation is different, defaults are usually only listed where:

There is a minimum overdue amount and time: a default is generally listed when a debt of at least $150 is at least 60 days overdue.
Written warnings are given: credit providers must send written notices to your last known address before listing a default.
Time passes: your credit provider must wait after you receive the written warnings before they are legally allowed to list a default.

Defaults: Impact & consequences

A credit default listing can make it harder to get approved for other credit, or it may affect the terms you’re offered. However, a default doesn’t mean you’re ’stuck‘ forever.

What happens to a default in Australia after 5 years?

As mentioned before, in general, a default listing will remain on your credit report for five years.

After five years, the default will disappear from your credit report, whether it is paid or not. If it has not been paid, you may still owe the debt. However, the underlying debt may still exist and could potentially be pursued by the creditor.

Strategies to manage and prevent a credit default

Some practical steps:

Act early: contact your credit provider as soon as you think you’ll miss a payment.
Get trustworthy advice: if you need help, you can ask a financial counsellor or Community Legal Services for advice. Financial counselling is free, independent, and confidential.
Pay what you can, when you can: even partial payments can help, and they create a record of you trying to manage the debt.
Make your other repayments on time: maintaining good repayment behaviour on other accounts will help improve your credit report

Removing a default from your credit report

There are a small number of situations when a default listing can be removed from your credit report.
These can include when the credit provider has made a mistake in listing the default, or when the overdue payments occurred because of something outside your control (such as a natural disaster, a bank error or situation outside of your control).

Situations when a default may be removed

The debt wasn’t yours

A default can be removed if the debt wasn’t even yours. This could happen if there’s a simple case of mistaken identity or someone has fraudulently taken out the loan or bought something on credit in your name.
The credit provider didn’t send you the correct written warnings

Before listing a default on your credit report, your credit provider must send you written warnings. If you don’t think you received the written warnings, talk to your credit provider and ask them to give you copies. Did your address change recently? The credit provider has to send the warnings to your last known address, so think about whether you told the credit provider your new address.
You had asked for hardship assistance

If you are struggling with your debt, you can ask your credit provider to help you. This is known as a request for “hardship assistance”.

Once you have asked for hardship assistance, the credit provider has to respond to you in writing. They cannot list a default while they are thinking about your request and for 14 days after telling you the outcome.

If your credit provider listed the default before 14 days had passed, then it may be removed. You’ll need to be able to show that you asked for hardship assistance.
The default happened because of something outside of your control

This could include things like the fact that you were a victim of domestic abuse, a natural disaster prevented you from making a payment or error by your credit provider in processing a direct debit.

You’ll need to explain why the default was an unavoidable consequence of something happening that was beyond your control.
The debt is from a long time ago and is ‘statute barred’

If a debt is statute barred, the person you owe money to cannot take action to get you to repay it. Defaults about statute barred debts can be removed from your credit report.

A debt may be statute barred if you haven’t made any payments to it for a number of years. For most debts this is 6 years, but it can depend on what state or territory you live in and what type of debt it is.

The rules about statute barred are complicated. If you think this may apply to you, you really should get some expert advice. You can ask a financial counsellor or community legal service for free advice.

Do you think your credit provider may have made a mistake?

Step 1 | Get your free credit reports. Request a free copy of your credit report from each of the two credit reporting bodies.
It’s FREE to get a copy from each credit reporting body every three months, or if you've applied for credit and been refused in the last 90 days.
Step 2 | Check whether the information is correct. Is there a default notice that is not accurate.
Compare the listing to your statements, payment records, and any contact you had with your credit provider correspondence and provide this evidence with your correction request.
Step 3 | Request a correction with the credit provider or the credit reporting body that shows the information on the credit report.
Explain what’s wrong and ask them to remove the default if it is inaccurate or shouldn’t have been listed. You have the right to do this for free. Ask for help if needed: If you cannot deal with the correction request on your own, ask for assistance from a financial counsellor.
Step 4 | Escalate to external dispute resolution when required. If you're unable to resolve the issue directly, you can go to the provider's External Dispute Resolution service, which are independent complaints bodies. For most providers, this will be the Australian Financial Complaints Authority.

Find out how to fix errors in your credit report

Beware credit repair companies

They often charge thousands of dollars for something you can do yourself for free - and they can't remove accurate information from your credit report.

If you need help, you can ask a financial counsellor or Community Legal Services for advice. Financial counselling is free, independent, and confidential.

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