What Is A Credit Default?

Today’s blog is based on questions I receive from time to time. They are, What is a credit default? Can I get a copy of my credit report? If I have a credit default, can I get it removed?

Lets look at what a credit default is first. A credit default may be come from non payment of a credit contract, bill (like phone bill) or other sources. If you are more than 60 days overdue on a payment of a credit obligation or contract, the credit provider may decide to lodge a default notice with Veda Advantage. If this happens, your credit file will be marked with non payment of a bill. If you pay it, or go in to a payment arrangement with the credit provider, they are required to update Veda Advantage of the updates, and that the bill has been paid.

Credit defaults may hinder future loan or credit applications, so its best to try and keep up to date with your credit commitments. If you are experiencing problems paying a bill, then it is best to talk to the credit provider, to try and make an arrangement to avoid the overdue payment being listed on your credit file. Have a read of the article; what to do if you cant pay your mortgage, if you are experiencing difficulties, for more information.

You can obtain a copy of your credit file from www.mycreditfile.com.au . There is a free version, which takes a couple weeks to be sent to you, or an express version, which will be emailed or faxed to you within a couple of hours. The express version currently costs around $37.00. The types of things that may be on your credit file are-

Credit enquiries,

Defaults, court judgements or bankruptcies (if applicable)

Directorships of a company (if applicable)

Listings are generally held on your credit file for 5 years, but can vary, for example a bankruptcy may be held for 7 years on your credit file.

There are some companies these days that offer credit default removal from your credit file. Some are actually quite successful in removing these defaults and listings, it would depend on what the default is for, whether it has been paid, etc. If you would like some more info on these types of companies, contact me, and I will give you their contact details.

Since the Global Financial Crises, banks and lenders have been harsh on credit defaults. It doesn’t mean you cant obtain a home loan, as some banks or lender have some tolerances for small credit defaults (like telco defaults). If you have bigger or many defaults, there are still some options with credit impaired home loans (these are generally quite expensive though)

If you have any comments, please leave below. If you would like more personal home loan information, or to use my services as a mortgage broker, please contact me anytime.