How did i get a Credit Default?

If you have ever applied for any form of finance or credit in the past then you will have a credit report with an agency indicating how you conducted your credit. The credit you applied for that created your report could have been a gas or electricity account, a credit card or personal loan, or even a home loan – in fact any facility invloving you obtaining credit. When you apply for credit the creditor will request to review your credit file with a credit reporting agency, and if there isn’t one on file, then a credit file will be created for you. Then a record of your enquiry would be placed on your new or existing credit file.

A credit default is where you are in default of your agreed terms of your loan or credit, and is recorded on your credit file under the following conditions:

  1. The default amount is greater than $150.00.
  2. Your creditor cannot find you, which you would be deemed a missing debtor and a “clear out” would be noted on your credit file.
  3. 60 days or more has passed since your due payment.
  4. Your creditor has asked you to pay the debt either in person (i.e. a phone call) or by providing written notice.

Your creditor would also inform you they may list a credit default with a credit reporting agency.

Am I able to obtain finance with Credit Defaults?

When you apply for further credit, the proposed creditor will take a look at your credit file and see the credit default, this way they are able to determine the potential for you in meeting your new obligations, based on your previous conduct. This of course may or may not be an accurate reflection on your capacity to pay back a new loan, and this is where specialist lenders have come about. These lenders have the ability to allow for credit issues, and have this reflected in their lending policies.

What are the types of Credit Defaults?

  1. Payment default – you have been greater than 60 days late on your payment.
  2. Serious Credit Infringement / Clear-out – you have not made contact with the credit for greater than 6 months and have left or it appears you have left your last known address; you have not paid your debt and not provided the creditor with your new address. For commercial clear-outs the default can be listed in less than 60 days if you haven’t provided a forwarding address.
  3. Payment Status – Current – this is where a default has been lodged but you have paid the debt and it is now up to date. The default will be listed as “current”
  4. Repayment History – if you pay your loan or credit account greater than 14 days after the due date it may be listed as a late payment.
  5. Bankruptcy – if you have been or are under a Part 9 debt agreement, Part 10 insolvency, or full bankruptcy this will be noted on your credit file under the bankruptcy/public information section.

If you are unsure of your potential to obtain finance, or refinance your home loan then contact Loan Saver Network on 1300 796 850. We have lenders who may be able to assist in sourcing competetive finance to resolve your issues.