Blog / How Long a Default Stays on Your Credit Report, and What Changes That

How Long a Default Stays on Your Credit Report, and What Changes That

By Alex, MoneySights editor · how this content is researched and reviewed

Published 2026-10-30 · last reviewed 2026-10-29

A default on a credit report has a lifespan, and most of the confusion about it comes from mixing up two different questions: how long the entry stays, and what its presence means while it is there. ASIC's Moneysmart sets out both, along with the conditions a provider has to meet before it can list a default at all. This guide works through the timings on the page, the entries that age on a different clock, and where a correction fits into that.

The short answer, then the conditions behind it

Moneysmart puts the headline timing plainly: a default stays on your credit report for five years, and seven years in the case of a clearout. Nothing else on that page qualifies the five years with behaviour, repayment or negotiation, which is the part worth sitting with. The conditions sit before the listing, not after it. The page says a service provider may report your non-payment of a debt to a credit reporting agency, that they must notify you before they do so, and that this can include defaults on utility and phone bills as well as credit accounts. It then lists what has to be true for a provider to report one, and those conditions are about the debt and the contact history rather than about how the story ended. Five years is also not the only clock running on the report. Other entries expire on shorter timers, and knowing which is which stops a reader from expecting a five-year entry to behave like a two-year one.

What has to be true before a default can be listed

The Moneysmart page lists the conditions a service provider needs before reporting a default: the amount owed is $150 or more, at least 60 days have passed since the due date, and the provider has asked you to pay the debt either by phone or in writing. The page also refers to a situation where the provider cannot contact you, which it calls a clearout, and that is the category with the longer listing. Two practical details follow from that list. A debt of a few dollars below the threshold does not meet the first condition, and a payment that clears the debt inside the 60-day window means the 60-day condition is not met. Neither fact is a strategy, and neither is a guarantee, because the page describes what a provider can do rather than promising what any particular provider will do. What it does mean is that the period between the due date and the listing is a period in which the situation is still just an unpaid bill.

A clearout is the version that lasts longer

The seven-year figure attaches to one specific situation. Moneysmart describes a clearout as the case where your service provider cannot contact you, and lists seven years as the listing period for a default in that case, against five years for the others. The distinction is about contactability rather than about the size of the debt or the number of missed payments. It follows that keeping an address and phone number current with a provider is not a cosmetic detail on this page: it is the difference between the category that lists for five years and the category that lists for seven. The page does not describe a process for reversing a clearout once it has happened, and it does not suggest one. What it does is set out the two periods side by side, which is enough to explain why two people with similar debts can be looking at listings with different end dates.

Paying the debt changes the listing, not its presence

This is the sentence on the Moneysmart page that resolves a common misunderstanding: if you pay the debt, your credit report will still list the default, but it will also show that you have paid it. The entry does not disappear, and paying does not reset the period: Moneysmart's credit repair page states that payments of $150 or more that are overdue by 60 days or more stay on the report for five years, even after you have paid them off. What changes is the status attached to it, from an unpaid default to a paid one. That matters because a reader who assumes payment removes the listing can end up disappointed by a report that looks unchanged, and then assume the payment did not register. It also explains why a paid default is a different thing from a clean file: the listing is still there for its full period, with a marker beside it. If you are checking whether a payment has been recorded, the thing to look for is that marker rather than the absence of the entry.

Other entries run on their own timers

The five and seven year figures cover defaults. The rest of the report runs on different timers, and the pages set them out. Credit products and repayment history cover the products you have held in the last two years, and a missed payment is defined as one not made within 14 days of the due date. Applications for credit cards, store cards, home loans, personal loans and business loans stay on the report for five years, and the page notes that buy now pay later applications also trigger a credit check. A financial hardship arrangement can appear, but only for the months the arrangement is in place, or the month a loan is varied if the arrangement is permanent, and the listing is deleted after 12 months; Moneysmart says a hardship arrangement does not affect your credit score. Bankruptcy, debt agreements, court judgments and personal insolvency agreements appear as their own category, which sit outside the periods covered here.

Not every arrangement reaches the report

There is a boundary on the hardship point that is easy to miss. Moneysmart says that a hardship arrangement for a credit product, such as a loan or a credit card, can appear on your credit report, but that an arrangement with a buy now pay later, phone, internet or utility provider will not appear on it. That is a statement about where the entry sits, not a statement that utility debts are invisible: the same page says a service provider may report non-payment of a debt, and that this may include defaults on utility and phone bills. The two statements work together. An arrangement with a utility provider is not going to show up as a hardship listing, while an unpaid utility debt that meets the default conditions can be reported as a default. Reading one without the other is how a reader concludes either that utilities never appear or that every arrangement does.

Wrong information is the one thing that comes off early

The page gives a short, specific route for a report that is inaccurate. Check that all the loans and debts listed are yours and that details such as your name and date of birth are correct. If something is wrong or out of date, contact the credit reporting agency and ask them to fix it, which the page describes as a free service. That is the route for an error, and it is the only early-removal route the pages describe. It is worth being precise about what it does not cover: a default that is accurately recorded does not become wrong because it has been paid, and the page does not describe any process for having a correct entry removed ahead of its period. The credit repair page goes further and lists the lender-side errors it treats as fixable: a payment of $150 or more listed as overdue by 60 days or more when it was not, a default listed when the provider did not notify you about the unpaid debt, a default listed while the debt was in dispute, a payment plan or changed contract term that was agreed but not shown, and an account created by mistake or through identity theft. If a listing is right, the five-year or seven-year period is the answer to when it goes, and the practical question becomes what the report shows about the debt in the meantime.

Companies that offer to clean up a credit report

Moneysmart addresses this directly. It says you do not need to pay a credit repair company to clean up errors in your report, that such companies may charge high fees for things you can do yourself for free, and that in some cases they may cause negative outcomes such as a new default arising from non-payment of credit repair fees. It adds that paying a credit repair company may not improve your credit score. The logic follows from the periods above: an accurate default stays for its five or seven years whatever anyone charges, and an inaccurate entry is corrected through the credit reporting agency at no cost to the person it belongs to. That does not make every business in the space dishonest, but it does narrow what the deliverable can be, and the warning about a second default is on the regulator's own page.

Who can look at the report, and what they see

Access is not open. Moneysmart says third parties can access your report for specific reasons, including assessing an application for credit you have made, and it names another Australian credit reporting body, a credit provider, a mortgage insurer, a trade insurer and a debt collector acting as an agent for a credit provider. The report also records requests for it made by credit providers, which is why a run of applications shows up as a pattern rather than a single enquiry.

Reading your own report line by line

Getting the report is the first step, and it is free: Moneysmart says you can get a copy every 3 months, and that it is worth getting one at least once a year. Then the check is mechanical. Confirm the name, date of birth, licence number and addresses are current, because a stale address is what produces the clearout category. Go through the credit products and confirm each is yours, with the provider, limit and opening and closing dates matching what you remember. Read the repayment history against the definition on the page, which counts a payment as missed when it is not made within 14 days of the due date. Look for hardship listings and confirm the months match the arrangement. Then check the defaults, the applications and any court judgments or insolvency entries. Read the date attached to each default rather than working back from memory: the periods describe how long an entry stays, not the day it begins. Anything that does not match is a correction request.

What a listed default means for an application

Moneysmart describes the role without promising an outcome: credit providers look at your credit history to decide whether to give you credit or lend you money. What the report supplies is the record, which is the default and whether it is paid, two years of repayment history, the applications made and any insolvency entries. What a provider does with that record is its own assessment, and the page sets out no formula. For anything that turns on your own circumstances, the question belongs with the provider or a qualified adviser rather than with a rule of thumb from an article, this one included.

What to do with this, this week

Four things follow from the pages and cost nothing. Confirm the address and contact details each provider holds are current, since that is the difference between the five-year and seven-year listing. Get your report, which Moneysmart says you can do free every 3 months. Check the entries against the definitions above, starting with the ones that carry dates. And if a provider is chasing a debt, deal with it at the notice stage, which is the point before a listing where the situation is still an unpaid bill; a default listed without that notification is among the lender-side errors the credit repair page lists as correctable. If a default is accurate and paid, the useful question is not how to remove it but what the rest of the report looks like, which is a question about the entries around it. The five-year figure is the figure readers usually arrive for, and it is the one that changes least in response to anything done after the listing is made. MoneySights covers the adjacent question, what a credit score is and is not, in its checkup before borrowing.

Questions

Sources

• Moneysmart (ASIC) — Credit scores and credit reports
• Moneysmart (ASIC) — Credit repair (typical errors, and the risk of a new default)

General information, not financial advice.