In Australia, a default stays on your credit file for 5 years from the date it was listed, even if you pay it off the next day. Paying it still matters: the listing is updated to show it has been paid, which lenders view far more favourably. Other information has its own timeline, such as late payments, which stay in your repayment history for 2 years.
In this guide, find the exact timeline for each type of listing, check whether a default was listed correctly, and see the free steps to get a wrong one removed, including a letter you can send. Use the calculator below to see what a loan would cost you with your current credit profile.
The timeline for every listing on your file
| Listing | How long it stays | Does paying remove it? |
|---|---|---|
| Late payment (repayment history) | 2 years | No, but on-time payments after it build a better picture |
| Financial hardship arrangement | 1 year | – |
| Default | 5 years from the listing | No, it is updated to “paid” |
| Credit enquiry (loan or card application) | Usually 5 years | – |
| Court judgment, bankruptcy, debt agreement | Several years, depending on the record | No |
The only things that remove a listing early are a correction (because it was wrong) or the lender agreeing that it should not have been listed. Paying never deletes a correct default, but it changes how lenders read it.
Was your default listed correctly? The 6-point checklist
A lender can only list a default if every one of these conditions was met. Check each one against your letters and statements:
- The amount overdue was at least $150.
- The payment was at least 60 days overdue.
- You were sent a written notice asking you to pay, to your last known address.
- A second notice was sent at least 30 days after the first, saying the lender intended to report the default.
- The lender waited at least 14 days after that second notice before listing.
- The default was listed within 3 months of the second notice.
If even one point fails, for example you never received the second notice because it went to an old address the lender already knew was out of date, you have grounds to ask for the default to be removed. Also check the basics: is the amount right, is the debt yours, and has a paid default actually been updated to “paid”?
Worked example: when Mia’s default disappears, and what she can do meanwhile
Mia missed payments on a $1,200 phone plan after losing her job. Here is how her credit file changes:
| When | What happens |
|---|---|
| March 2026 | First missed payment. |
| May 2026 | Over 60 days overdue; first notice sent. |
| June 2026 | Second notice, at least 30 days later. |
| July 2026 | Default of $1,200 listed. |
| October 2026 | Mia has a new job and pays in full. The default is updated to “paid”. |
| Late 2026 – 2027 | All her other repayments are on time, building positive repayment history. |
| July 2031 | The default drops off her credit file, 5 years after listing. |
In the meantime, Mia is not locked out of credit. With a paid default and a clean recent history, some lenders will consider her, at higher rates. What is realistic for her profile is covered in bad credit personal loans in Australia. Had she contacted her provider in March and asked for a hardship arrangement, the default might have been avoided altogether.
Letter template: asking a lender to correct a default
Send this to the lender that listed the default (usually the fastest route). You can also send it to a credit reporting body. Correction requests are free.
[Your full name]
[Your address]
[Your date of birth]
[Account number]
[Lender’s name]
Complaints / Credit Reporting Team
[Date]
Re: Request to correct credit information – account [number]
Dear Sir or Madam,
A default of $[amount] has been listed on my credit report by your organisation on [date]. I believe this information is incorrect because [choose: I did not receive the required notices before the default was listed / the notices were sent to an address you knew was no longer current / the amount listed is wrong / this debt was paid on [date] and the listing has not been updated / this account is not mine].
Under the Privacy Act and the Credit Reporting Code, I request that you correct or remove this information. Please provide copies of the notices you sent me before listing the default, including the dates they were sent and the address used.
If you agree the information is incorrect, please correct it within 30 days and confirm in writing. If you do not agree, please give me your reasons in writing and the details of your external dispute resolution scheme.
Yours sincerely,
[Signature]
Attachments: [copies of your evidence]
Correction refused: your next steps, in order
- Read the written reasons. If they refuse, they must explain why in writing and tell you how to complain.
- Use their internal complaints process if you haven’t already, and keep copies of everything.
- Escalate to the external dispute resolution scheme they name, which for most lenders is the Australian Financial Complaints Authority (AFCA). It is free for consumers.
- Contact the OAIC if your complaint is about how your credit information was handled and it hasn’t been resolved.
A free financial counsellor from the National Debt Helpline (1800 007 007) can help you prepare the complaint.
“Credit repair” companies: what they charge for things you can do free
Some businesses promise to “clean” your credit file for a fee, sometimes hundreds or thousands of dollars. Before you sign:
- Getting your credit report is free every 3 months from each credit reporting body.
- Asking for a correction is free.
- Complaining to AFCA is free for consumers.
- No one can legally remove a correct default before its time.
If a company guarantees removal or asks for a large fee upfront, walk away and use the free steps above.
Applying for credit while a default is on your file
Every application leaves an enquiry, and several declines in a row make your file look worse. Before you apply, check whether a lender offers a quote with a soft check, compare carefully and apply once. If the loan is for an essential item and you are on a lower income, a No Interest Loan doesn’t require a credit check: see no credit check loans in Australia. Already declined? Read loan application declined: what to do next.
Frequently asked questions
How long does a default stay on my credit file in Australia?
5 years from the date it was listed, whether or not you pay it.
Does paying a default remove it?
No. The listing stays, but it is updated to show it has been paid, which lenders view more favourably than an unpaid default.
Can a default be removed early?
Only if it is incorrect, for example if the lender didn’t send the required notices, or the amount or account is wrong. You can ask for a correction for free.
How long do late payments stay on my credit report?
2 years in your repayment history.
How do I check if I have a default?
Request your credit report from each credit reporting body, such as Equifax and Experian. It is free once every 3 months.
Conclusion
A default stays on your credit file for 5 years, but it doesn’t have to define those 5 years. Check that it was listed correctly, pay it so it shows as “paid”, keep every other payment on time and challenge anything that is wrong, for free. Use the letter template above if you need to. Borrow only what you can afford to repay.
