A default stays on your credit report for five years from the date it was listed. Paying it does not take it off, and closing the account does not either. This guide walks through how the timeline works, what else sits on your report and for how long, and the only circumstances in which a default can come off early.
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Investigation
We investigate the circumstances behind each listing on your credit file, identifying potential breaches of the Privacy Act or non-compliance with the Credit Reporting Code. This is completed with you over the phone through 40+ simple yes, no, or unsure questions, along with your personal circumstances at the time.
Approved or Denied
If our investigation identifies multiple potential breaches, you may be approved for our credit restoration services. If not, your application will be declined, and your consultant will explain why, providing complete clarity.
Note: Approval does not guarantee the removal of any listing.
Disputes & Result
Formal removal requests are lodged with Equifax, Experian, and relevant credit providers, with escalation to AFCA, the OAIC, courts, or other bodies where required.
If a breach is confirmed, listings may be removed, in most cases boosting your credit score and helping future finance applications.
The five-year rule
Credit reporting in Australia is governed by Part IIIA of the Privacy Act 1988 and the Privacy (Credit Reporting) Code. Under those rules, a default remains on your credit report for five years, counted from the date the credit provider listed it. When the five years are up, the credit reporting body must remove the listing. You do not need to apply, pay anyone, or chase it; removal at the five-year mark is automatic.
The starting point matters. The five years run from the listing date, not from the date you first missed the payment, and not from the date you eventually paid. If a $900 phone bill went unpaid in January and the provider listed the default in June, the five years run from June.
What counts as a default in the first place
Not every missed payment becomes a default. A credit provider can only list a default when the debt is $150 or more, the payment is at least 60 days overdue, and the provider has sent you the required written notices first: one asking for payment, then a second warning that the default is about to be listed, with mandatory gaps between the notices and the listing. A one-week late payment on a credit card can never legally appear as a default.
Those conditions are not fine print. If any of them was not met, the default may have been listed in breach of the rules, and that matters for early removal, which we cover below.
Paying a default does not remove it
This is the point that catches most people. When you pay a defaulted debt, the listing is updated to show a status of “paid”. The default itself stays on your report, and the five-year clock keeps running from the original listing date. Paying in year one does not mean it comes off in year one.
Payment still helps. Lenders read a paid default very differently from an outstanding one, because it shows the debt was dealt with. So paying is usually worthwhile; just do it with accurate expectations. Anyone who tells you that paying a debt will wipe the listing is wrong about Australian law.
How long everything else stays on your report
Defaults are not the only entries on a credit report, and each type has its own retention period:
- Defaults: 5 years from the date of listing.
- Credit enquiries: 5 years. Every credit application you make leaves an enquiry, whether or not it was approved.
- Repayment history information (RHI): 2 years. This is the month-by-month record of whether you paid your accounts on time.
- Court judgments: 5 years.
- Serious credit infringements: 7 years. These are listed when a provider believes you intended to evade the debt, for example by disappearing without contact details.
The two-year window for repayment history is worth noticing. It means your recent conduct carries real weight. Even with a default on file, two years of on-time payments across your accounts gives lenders a clean recent record to look at.
When a default can come off before five years
There is exactly one path to early removal: the listing has to be wrong in some way. A default can only be removed when it is inaccurate, unfair, out of date or was listed in breach of the credit reporting rules. Common examples include a debt that is not yours, a wrong amount, a listing made without the required notices, a debt under $150, a duplicate listing of the same debt, or a default that has passed five years and should already be gone.
If a default on your file fits one of those descriptions, you can request a correction from the credit provider or the credit reporting body, and escalate to the Australian Financial Complaints Authority or the Office of the Australian Information Commissioner if they refuse. A specialist default removal service does this work for you: investigating the listing, gathering the evidence and pursuing removal where grounds exist. What no honest service can do is remove an accurate, properly listed default, so treat any guarantee of removal as a red flag. Our step-by-step guide on how to remove a default from your credit file explains the whole process.
Wondering which category your default falls into? Book your credit file assessment. For $39.95, Credit Clean Australia reviews your credit file and tells you exactly what can and can’t be challenged, so you’re not left guessing or paying for work that can’t succeed.
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Book a $39.95 credit file assessment — we audit both your Equifax and Experian files and tell you straight what can and can’t be disputed. If we can’t help, we tell you that too.
How to check your credit report for free
Australia has three credit reporting bodies: Equifax, Experian and illion. You are entitled to one free copy of your credit report from each of them every three months. Order all three, because credit providers do not necessarily report to every bureau, and a default can sit on one report while the other two are clean.
When the reports arrive, check three things on any default: the listing date, since that fixes the removal date five years later; the amount; and the provider named. While you are there, confirm your personal details are right. Wrong details are how other people’s debts end up on your file.
What a default means while it’s on your file
A default tells lenders you had a debt of $150 or more that went at least 60 days unpaid, and most lenders take that seriously. It can mean declined applications or higher rates while the listing is current. It does not mean borrowing is impossible. Some lenders will consider an application with a default on file, particularly a paid one with a clean recent repayment history behind it, though every lender applies its own criteria and nothing is assured. If buying property is the goal, read our guide on getting a home loan with a default before you apply anywhere, because every application adds an enquiry to your file for five years.
The practical play while a default runs its course: pay every account on time so your two-year repayment history rebuilds, keep credit applications to a minimum, and check your free reports each quarter so nothing new appears without your knowledge.
Frequently asked questions
Does paying a default reset the five years?
No. The five years always run from the date the default was listed. Paying updates the status to “paid”, which lenders view more favourably, but it neither removes the listing nor changes its removal date.
Does the five years start from when I missed the payment?
No. The clock starts on the date the credit provider listed the default with the credit reporting body, which is often weeks or months after the payment was first missed. Check the listing date on your report; the default must come off five years from that date.
Will a default come off automatically after five years?
Yes. The credit reporting body is required to remove it once five years have passed from the listing date. If you find a default older than five years still showing, it is out of date and you have clear grounds to have it corrected.
Can a default be removed before the five years are up?
Only if there are proper grounds: the listing is inaccurate, unfair, out of date or was made in breach of the credit reporting rules, for example the required notices were never sent. Where grounds exist, removal can be pursued with the provider or bureau. Where the default is accurate and properly listed, it stays for the full five years, and no one can lawfully remove it early. See our removal guide for how challenges work.
If you want certainty instead of a countdown, start by finding out what is actually on your file and whether any of it can be challenged. Book your credit file assessment for $39.95 and Credit Clean Australia will review your credit file and tell you exactly what can and can’t be challenged, and what your realistic options are from there.
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