Credit Defaults

Information on Credit defaults is noted in 2 parts of your credit file. The summary table and also the details section – see below.

The details section provides specific information related to the default. Therefore, lodgement date, default amount, plus the date of payment.
Defaults stay on the credit file for five years from lodgement. As such, the default in the table below will drop off the credit file 26/02/2020.

Impact of Credit Defaults on Finance Applications

All lenders take a look at your credit file to obtain an insight into the character of their potential client. Your credit file shows an enormous amount of information from employer information, credit application, and of course credit defaults and judgements.

There are a range of lenders available when you have credit defaults, each lender has its own policies in regard to providing finance when credit defaults are present. The lenders will assess the following:

  • Are credit defaults paid or unpaid?
  • Number of credit defaults?
  • Age of credit defaults?
  • How long it took to pay the credit default after it was listed?
  • Are defaults commercial or consumer?

There are lenders who can assist with finance, including refinancing home loans with mortgage arrears, even with credit defaults. However, there are may other factors involved in a finance assessment and each lender has differing policies. As a result some lenders will approve finance, while others will decline an application. Other lenders will offer higher interest rates than others.

If you have credit defaults, your credit score will be affected negatively. Hence, it is very important to obtain a full assessment of your potential for finance prior to submitting a loan application.

We often find clients with defaults and submit multiple loan applications trying to obtain approvals. This can work against the process further by reducing the credit score - see the section on credit score.

We advise obtaining a free credit default consultation prior to submitting any loan applications. indeed, you may need a bad credit home loan if you have credit defaults and seeking a refinance; or to purchase a property. Consequently, when you have credit defaults the loan submission process should be strategic and systemised to provide the best chance of a successful result. Contact us on 1300 796 850 for a confidential credit default assessment, or submit an enquiry below.