A default on your credit file feels like a verdict. It is closer to a record of one specific event, with strict rules about when it can be recorded and how long it lasts.
Plenty of people discover a default years later, attached to a phone or utility account they thought was closed. Knowing the rules is the difference between accepting a listing that should not be there and fixing it.
What legally counts as a default
A credit provider cannot list a default just because you are behind. Under the Privacy Act, all of the following have to be true:
- You are at least 60 days overdue on the payment
- The overdue amount is $150 or more
- The provider has given you a written notice telling you about the overdue payment and asking you to pay it
- The provider is not out of time under a statute of limitations to recover the amount
The $150 threshold surprises people. A small unpaid balance genuinely can be listed, which is why closed phone and internet accounts are such a common source of defaults.
Two separate notices, in a set order
This is where a lot of listings go wrong, and the rules tightened under the Privacy (Credit Reporting) Code 2025, which took effect in March 2025.
The provider must give you two separate notices, and cannot combine them:
1. The overdue payment notice, telling you the payment is overdue and asking you to pay
2. A second notice stating that the provider intends to disclose the information to a credit reporting body
The sequencing rules are specific:
- The overdue payment notice must come first
- The second notice cannot be given less than 30 days after the first
- The default cannot be disclosed to a bureau until at least 14 days after the second notice
- It must be disclosed no later than 3 months after that notice
- Both must go to your last known address
- The second notice cannot be buried in other correspondence in a way that reduces its prominence
So from first notice to a listing appearing is a minimum of roughly 44 days, on top of the 60 days overdue. If you never received two notices at your last known address, that is worth raising.
Hardship protections
If you have asked your provider for hardship assistance, they must not list a default while that request is being decided. If the request is refused, they cannot list until at least 14 days after they have notified you of the refusal.
Financial hardship information itself is recorded separately and only stays on your file for one year, which is much shorter than a default's five. Asking for hardship early is materially better for your file than going quiet and being defaulted.
How long it stays
- Default: 5 years from the day the credit reporting body collects the information
- Payment information, meaning the default marked as paid: 5 years from when the bureau collected the related default
- Serious credit infringement: 7 years
That last category is the serious one. It covers fraudulently obtaining credit or evading obligations, and also applies where a reasonable person would conclude you intend not to comply, the provider has been unable to contact you after reasonable steps, and at least six months have passed since last contact. That is the "clearout" scenario, and it is the difference between a five-year and a seven-year mark.
Paying it does not delete it, but it still matters
A paid default stays listed for the full five years. What changes is that the file is updated to show it as paid.
Lenders treat that very differently from an unpaid one. An unpaid default reads as an open, unresolved obligation. A paid default reads as a problem that has been dealt with. If you can clear it, clear it, even though the listing remains.
Can you get car finance with a default?
Often yes, though nobody can promise approval before assessing your situation, and any lender or broker who does is telling you something about themselves rather than about your application.
What actually moves the needle:
- Age of the default. A listing from four years ago carries far less weight than one from four months ago
- Paid or unpaid. Paid is materially better
- Size and type. A $200 telco default and a $15,000 finance default are not comparable. Defaults on previous car or personal loans hit hardest, because they are the most direct evidence for the decision at hand
- How many. One isolated default with clean history around it is a very different story from a pattern
- What has happened since. Repayment history only looks back two years, so a solid recent run of on-time payments is visible and genuinely counts
- Deposit, and the car itself. Both reduce the lender's exposure and widen who will look at you
Expect a higher rate than a clean file would get, and expect the lender panel available to you to be narrower.
Check your file before you apply, not after
You can get a free copy of your credit report from Equifax and from Experian, the two main credit reporting bodies in Australia. Get both, because they do not always hold the same information.
If a listing is wrong, you can dispute it directly with the bureau or the provider for free. Grounds worth checking:
- You were never 60 days overdue
- The amount was under $150
- You did not receive both required notices, or they were not sent to your last known address
- The notices were sent out of sequence or too close together
- It was listed while a hardship request was still being decided
- The debt is not yours, or is a duplicate
- The five or seven year period has already expired
Be sceptical of paid credit repair services. Accurate listings generally cannot be removed, and ASIC has taken court action against a firm that claimed to remove negative listings without checking whether consumers had any or whether they could be removed. The dispute process costs nothing to use yourself.
The mistake that makes it worse
Applying everywhere. Every credit enquiry stays on your file for five years, and several in a short window reads as distress to the next lender who looks.
If you have a default, the single most valuable thing you can do is find out which lenders have appetite for your situation before an application exists. A soft eligibility check with Loanseekers does not affect your credit score and does not create an enquiry, and we can see across a panel of more than 70 lenders which ones realistically fit.
For the wider picture, read bad credit car loans, and if the default is behind you but your current loan was priced when it was not, refinancing with bad credit may be worth running the numbers on.
