As the cost of living crisis continues and energy bills rise, this time of year can be difficult. Especially when the kids want to dress up or decorate the house for Halloween and Christmas is just around the corner. If you’re behind on debt repayments, this can make circumstances even harder, leading to defaults on your credit file. But, how long do defaults stay on your credit file?
We’ll be answering all of your questions in our latest blog.
What Does A Default On Your Credit File Mean?
A default on your credit file means you have missed multiple payments to your creditor and they have closed or restricted access to your account with them.
This usually happens after three to six missed payments, but this number will vary depending on the lender or creditor.
For creditor debt help and advice, click here.
What Action Can Your Creditors Take?
In most cases, your creditor will send you a default notice. A default notice is a warning letter, notifying you that you have missed agreed payments or paid less than the full amount required for three to six months, and your account will either close or be restricted if not paid within a certain time frame.
Further action creditors can take include:
- Sending your debt to a debt collector
- Instructing bailiffs
- Taking money from linked accounts
- A County Court Judgement (CCJ)
- Deductions from income
- A charging order
To learn more about the different types of creditor action, click here.
How Long Does A Default On Your Credit File Last?
A credit file default lasts six years and will lead to a reduction in your credit score. Once the six years are up, the default will disappear from your credit file, and if you have managed to pay off your debt, that will disappear too.
If you haven’t managed to pay off your debt, the default will still be removed and will stop impacting your credit score, but the balance of your debt will still appear on your file.
Should I Pay Off A Default?
Even if you pay your defaulted debt off, it will remain on your credit file. But, if you choose not to pay it off, or cannot afford to, your creditor has the right to apply for a CCJ. This is seen as worse than a default by other lenders, and would stay on your credit file for another six years, starting from the date it has been added.
If I Can’t Pay My Debts, What Do I Do?
If you need some debt advice, it won’t affect your credit score. Use our free Online Debt Advice (ODA) Tool to see what debt solutions are available to you. Recommendations will appear instantly on-screen and the tool is available to use any time, day or night. The friendly and experienced debt advisers at Angel Advance are always here to help if you would prefer to discuss how to deal with your debts over the phone.
Where Can I Get Debt Advice?
Free* confidential debt advice is always available at Angel Advance. Contact us to speak to one of our knowledgeable debt advisers who can give you no-obligation debt advice and support, to help you decide on the best solution for you.
*Our advice is free, but if you sign up for a debt solution, a fee will apply for some solutions.
