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Default notices, missed payments and your credit file

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What is a default notice?

A default notice is a letter from the people you owe money to. It warns you that you are behind on payments and your account may default if you don't bring your payments up to date.

‘Default’ means the account is closed and you can no longer use it.

Default notices apply to debts covered by the Consumer Credit Act, such as credit cards, personal loans, payday loans and hire purchase agreements. After a default notice, if you still do not pay what you owe, further action can be taken to collect the debt. Read our guide to debt collection.

If things have got to this stage, it is likely you could do with some help managing your money. Our debt advice is free and based on your needs. We will work with you to find a way to get back on track.

The easiest way to get started is online. Start debt advice online today. You can pause and re-start at any time.

What you can do today about a default notice

  1. Work out what you can and cannot afford to pay, by working out your monthly budget
  2. Get in touch with the people you owe and explain why you have missed payments
  3. Ask to pay what you owe at a rate you can afford and keep to that arrangement
  4. We can help you with all of this. Find out more about our free debt advice and support service

When am I likely to receive a default notice?

You will usually receive a default notice after six months of missed or reduced payments. The people you owe money to will normally give you two weeks to bring your payments up to date. If you cannot pay in this time, your account with them will default.

Worried about getting a default notice? Our debt advice can help you understand what to do next.

Does a default notice affect your credit rating?

A default notice itself does not affect your credit file, but your account being defaulted does.

A default will show on your credit file for six years from the date it is first registered.

Your credit file will show that you did not make your agreed payments as all missed payments are recorded. This can affect your credit score and make it harder to get credit in the future.

Find out more about your credit score.

What should I do if I get a default notice?

Read the notice carefully and check how much you need to pay and when you need to pay it.

If you can afford to pay the amount requested within the time given to pay you may be able to stop the account from defaulting.

Whether you can afford to pay or not, don't ignore the notice. You can contact the people you owe to explain your situation and ask about an affordable payment arrangement.

If you are struggling with several debts, get free debt advice to find out what options are available to you. Finding a way to pay back or write off the debt can help you to avoid further action, such as a county court judgment (CCJ)

How long do I have to pay a default notice?

A default notice must give you at least 14 days to bring your payments up to date.

Check your default notice carefully as it will tell you the exact date you need to take action by.

If you cannot afford to pay what the notice asks for, you should get debt advice as soon as possible rather than waiting until the deadline.

Can I stop a default from being registered?

You may be able to stop the account from defaulting if you bring your payments up to date within the time given in the default notice.

If you cannot afford to pay the amount requested, contact the people you owe as soon as possible. They may be able to agree an affordable payment arrangement, although they do not have to accept your offer.

If you need help managing your money, get started by reading our useful guide to budgeting.

Can I still make a payment plan after getting a default notice?

You can ask the people you owe to accept affordable payments after receiving a default notice.

They do not have to accept your offer, and the account may still default if you cannot bring the payments up to date within the time given.

If you have several debts you cannot afford to pay, our free debt advice can help you look at your options.

 

Does paying a default remove it from my credit file?

No. Paying the debt does not remove the default from your credit file early.

The default will normally stay on your credit file for 6 years from the date your account was defaulted. Paying the debt can show that the debt has been settled, but the default itself remains until it drops off your credit file.

Worried about getting a default notice? Our debt advice can help you understand what to do next.

Answer 5 quick questions to find out what you should do next.

Be honest – this will just be between us, and we will not record any of the answers you give.

Do you use credit, loans or an overdraft until your wages or benefits come in?

Have you been making minimum repayments on debts or even missing repayments on them?

Have you received any charges for late payments, or fees for your overdraft recently?

Are you currently using credit cards to cover your repayments?

Have you been using credit to pay your household bills? Or have you fallen behind on paying them?

Things are looking pretty good

No need to worry, things are looking pretty good

From what you have told us, you do not have a debt problem.

Make sure you keep on top of your money. You can use ourbudgeting guidesto get started. This will help if you are falling behind with payments.

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You should act now to avoid bigger problems later

From what you have told us, you may have a debt problem. No need to worry, there is a lot you can do. And taking action now means you start to sort it out quicker.

You can get debt advice online at any time. We will not share your details with anyone.

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Or, if you are not ready to get help right now, use ourbudgeting guides.

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We will help you to create a budget. This will show you how much you can afford to pay towards your debts. We will also help you deal with the people you owe. And we will recommend ways to start to sort out your debt.

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You need help with your debts

From what you have told us, your debt sounds a big problem. You are probably worried about this. We can help you.

Get debt advice online now. You can switch to the phone if you want to talk with someone. Either way, we will not share your details with anyone.

We will help you to create a budget, which will show you how much you can afford to pay towards your debts. We will also help you deal with the people you owe money to. And we recommend ways to start to sort out your debt.

We are here for you online 24/7. If you need to stop and come back later, that is fine.

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