Your credit file contains several types of information that potential lenders review when you apply for finance. Three of the most commonly misunderstood entries are defaults, missed payments and credit enquiries.
Each serves a different purpose, has different listing requirements and affects your credit score differently. Understanding these distinctions can help you read your credit report accurately and know what may be affecting your finance applications.
Got a default on your credit file? Lodge it with Default Gone right here, or call us on (02) 5502 7025. $399 flat per consumer per default. We do not guarantee removal — outcomes depend on the facts of each case — but we will prepare and lodge the dispute properly.
What is a default on your credit file?
A default is a formal listing that appears when you are significantly overdue on a debt payment and the creditor decides to record this with the credit reporting bodies.
Default listing requirements
For a default to be listed legally, specific conditions must be met:
- The debt must be at least $150
- You must be at least 60 days overdue
- The creditor must have sent you a formal default notice
- The notice must give you 30 days to pay before listing
- The notice must be sent to your last known address
How long defaults stay on file
Defaults remain on your credit file for 5 years from the date they are listed, regardless of whether you eventually pay the debt. Even after payment, the default continues to show with a status of “paid” or “satisfied”.
Impact on credit applications
Defaults have a significant negative impact on credit scores and lending decisions. Most mainstream lenders will either decline applications outright or require additional documentation and higher interest rates when defaults are present.
What are missed payments on your credit file?
Missed payments, also called payment history information or RHI (Repayment History Information), show your monthly payment patterns on credit accounts.
What missed payments record
Unlike defaults, missed payments track your ongoing payment behaviour:
- Whether each monthly payment was made on time
- Payments that are 14+ days late
- Payments that are 30+ days late
- Payments that are 60+ days late
The system records these as numerical codes (1 for on time, 2 for 14+ days late, 3 for 30+ days late, etc.) for each month.
Duration on credit file
Missed payment history is kept for 24 months from the date of each missed payment. This creates a rolling 2-year window of your payment patterns.
Which accounts report payment history
Not all credit accounts report monthly payment history. The main types that do include:
- Credit cards
- Personal loans
- Home loans
- Car loans
- Some store cards
Utilities, phone bills and buy-now-pay-later services typically don’t report monthly payment patterns unless they progress to default.
What are credit enquiries?
Credit enquiries record when someone accesses your credit file to assess your creditworthiness. These are also called credit checks or credit applications.
Types of credit enquiries
There are different categories of enquiries:
Hard enquiries: When you apply for credit and the lender checks your file. These include applications for loans, credit cards, mortgages and some rental applications.
Soft enquiries: When you check your own credit file or when existing creditors review your account. These don’t affect your credit score.
Identity verification checks: Sometimes used for employment screening or account verification.
How long enquiries remain
Credit enquiries stay on your credit file for 5 years from the date they are made. However, they only affect your credit score for the first 12 months.
Impact of multiple enquiries
Multiple hard enquiries within a short period can negatively impact your credit score, as this may indicate financial stress or shopping for credit extensively.
Key differences at a glance
| Feature | Default | Missed Payment | Credit Enquiry |
|---|---|---|---|
| Duration on file | 5 years | 2 years | 5 years |
| Credit score impact | High negative | Moderate negative | Low negative (12 months only) |
| Listing threshold | $150, 60+ days overdue | 14+ days late | Any credit application |
| Notice required | Yes (30-day default notice) | No | No |
| Shows after payment | Yes (marked as paid) | N/A | N/A |
How these entries affect your credit score
Defaults have the strongest impact
Defaults typically cause the largest drop in credit scores because they indicate serious payment difficulties. A single default can reduce a credit score by 100-300 points depending on the scoring model.
Missed payments create ongoing concerns
While individual missed payments may not drop scores as dramatically as defaults, a pattern of late payments over several months signals ongoing payment difficulties to lenders.
Enquiries have limited short-term impact
Credit enquiries cause small, temporary score reductions. One enquiry might reduce a score by 5-10 points, while multiple enquiries within months could have a cumulative effect.
What to check on your credit file
When reviewing your free credit report, check these details for accuracy:
- Default accuracy: Verify the amount, date and notice requirements were followed
- Payment history accuracy: Check that late payment records match your actual payment dates
- Enquiry legitimacy: Ensure all enquiries correspond to applications you actually made
- Personal details: Confirm your name, addresses and employment history are correct
- Account details: Verify that all listed accounts actually belong to you
If you find errors, these may be worth disputing with the credit reporting body or credit provider.
When defaults may be worth challenging
Not all defaults are listed correctly. Common issues that may make a default open to dispute include:
- No default notice was sent
- The notice was sent to an old address despite you updating your details
- The notice didn’t give the full 30 days required
- The debt was already paid before the default was listed
- The amount listed is incorrect
- The debt doesn’t belong to you
How different lenders view these entries
Lenders have varying policies on how they assess defaults, missed payments and enquiries:
Major banks
Typically have strict policies on defaults and may decline applications automatically if defaults are present, regardless of the circumstances.
Non-bank lenders
Often have more flexible assessment criteria and may consider applications with defaults, especially if they are older or have been paid.
Specialist lenders
Some lenders specifically cater to borrowers with credit file issues and focus more on current income and expenses than past payment problems.
Understanding the timeline of credit issues
From missed payment to default
The progression from a simple missed payment to a default follows this typical pattern:
- Day 1-13: Payment is overdue but not yet recorded as missed
- Day 14+: May be recorded as a missed payment if the account reports payment history
- Day 30+: Typically recorded as a more serious missed payment
- Day 60+: Eligible for default listing if other requirements are met
- Day 90+: Default notice period expires, default may be listed
This timeline can vary depending on the creditor’s policies and the type of account.
Recovery after credit issues
The impact of these entries diminishes over time:
- Recent issues: Have the strongest negative impact on applications
- 12+ months old: Begin to have less influence on lending decisions
- 2+ years old: Missed payments drop off, reducing their impact
- 3+ years old: Defaults start having less influence with some lenders
- 5+ years old: All entries are removed from the credit file
Special considerations for joint accounts
When couples have joint credit accounts, both parties’ credit files may be affected by defaults, missed payments and enquiries related to that account.
Key points for joint accounts:
- Both names may appear on defaults from joint accounts
- Payment history from joint accounts appears on both credit files
- Credit enquiries for joint applications appear on both files
- Each person’s credit file remains their own separate record
This means one person’s individual accounts won’t directly affect their partner’s credit file, but joint accounts affect both.
Industry-specific patterns
Telecommunications defaults
Phone and internet providers commonly list defaults, often for relatively small amounts. These defaults frequently have issues with notice requirements, particularly when service addresses differ from billing addresses.
Utility defaults
Electricity, gas and water providers may list defaults for unpaid bills. These often occur after account closures when final bills aren’t received or forwarded properly.
Buy-now-pay-later services
While these services don’t typically report monthly payment history, they may list defaults for unpaid amounts. The notice requirements are the same as for other creditors.
How Default Gone helps
Default Gone helps Australians challenge unfair, incorrect or unlawfully listed defaults. We collect the relevant information, prepare the dispute, lodge it with the credit provider and/or credit reporting body, track the response and explain the outcome in plain English.
The standard Default Gone service is $399 per consumer, per default (limited launch pricing — normally $399). There are no stage fees, no success fees and no surprise invoices. The fee covers the work performed, not a sought outcome.
For those wanting to understand their full credit position, our how it works page explains the structured dispute process we follow.
Taking action on credit file issues
If you’ve identified potential issues with defaults, missed payments or other entries on your credit file, the first step is getting a complete picture of what’s actually recorded.
Let’s challenge it properly.
$399 flat per consumer per default. We prepare your dispute under the Privacy Act 1988 framework, review the detail, and file it to the credit reporting body and the credit provider. We do not guarantee removal — outcomes depend on the facts of each case — but we will do every bit of work that fits.
Lodge your default · Call (02) 5502 7025 · See pricing · How it works
For defaults that may have been listed incorrectly, don’t just accept that they can’t be challenged. The notice requirements exist to protect consumers, and when they aren’t followed properly, the default may be open to dispute.
Disclaimer
Default Gone is not a law firm and does not provide legal or financial advice. We do not undertaking that a default or judgement will be removed. Outcomes depend on the facts, documents and response from the credit provider, credit reporting body or relevant legal pathway.
Frequently asked questions
Can a missed payment become a default?
Yes, if you continue not paying a debt, what starts as missed payments recorded monthly can eventually progress to a formal default listing. However, the creditor must still follow the proper default notice process before listing a default, regardless of how many payments you’ve missed.
Do all credit accounts report missed payments?
No, not all accounts report monthly payment history. Credit cards, personal loans, home loans and car loans typically do, but utilities, phone bills and buy-now-pay-later services usually only report if the account progresses to default. The reporting depends on the creditor’s systems and policies.
How many credit enquiries is too many?
There’s no fixed number, but multiple enquiries within 3-6 months can signal financial stress to lenders. Some lenders are more concerned about enquiries than others. Shopping for the same type of credit (like a home loan) within a short period is generally viewed more favourably than multiple different credit applications.
Will paying a default remove it from my credit file?
No, paying a default doesn’t remove it from your credit file. The default will remain for the full 5 years but will be updated to show “paid” or “satisfied” status. However, a paid default is viewed more favourably by some lenders than an unpaid one.
Can I dispute missed payment records?
Yes, if missed payment records are inaccurate, you can dispute them with the credit provider or credit reporting body. You’ll need to provide evidence such as bank statements showing the payments were made on time, or proof that the late payments were due to creditor error rather than your failure to pay.
What’s the difference between a default notice and a default listing?
A default notice is the formal warning letter the creditor must send before listing a default. It gives you 30 days to pay the debt and avoid the default listing. A default listing is what actually appears on your credit file if you don’t pay within that 30-day period. The notice is a warning; the listing is the actual credit file entry.