If you have a default on a credit payment, this basically means that you have not made your agreed upon payments to the credit provider. You need to remember that once a certain amount of time has elapsed, there will be a record of your non-payment and this will become a part of your credit history.
What if I defaulted on an account more than 12 months ago?
If your default payment was over a year ago and you have not paid in full, your missed payment will be earning interest. This means that the longer you put off the payment, the more you will have to pay. Also, the chances of the credit provider filing a judgement against you increases the longer you put off the payment. A judgement can stay on your credit report for five years and it will prohibit you from taking out more credit, so it’s best that you make the payment as soon as you’re able.
How long will a default stay on my credit report?
A default will remain on your credit report for up to two years. Your default status on your credit report will be removed once the default has been paid in full. Within 7 days of paying in full, the credit provider will update their information and inform the credit bureaus that you have paid up. After this, the credit bureau has 7 days to amend your credit report.
What if I am unable to pay this one repayment?
There is also a difference between a default and a deferment and going forward you should try to keep this in mind. A deferment on a credit payment is a plan where you and the credit provider have agreed to a postponed payment. If you are at risk of defaulting on a credit payment, you should get into contact with the credit provider and look into a deferment before the default happens. A deferment is a good indicator that you are still willing to make the payment; however, a default may indicate that you unable to make the payment at all.
What can I do to avoid a default?
To avoid defaulting on a payment in the future, you need to ensure that you are on time with your credit repayments. With most credit providers, you should be able to set an automatic payment for the amount that you select. This will help you make sure that you’re not accidentally missing a payment. If your credit provider does not allow you to set this automatic payment you should write down your payment deadlines and set reminders on your phone so that you are consistently paying your bills on time.