What is a default notice?
A default notice is a letter the people you owe send to warn that you are behind on payments and your account may default.
The people you owe usually send this after six months of missed or reduced payments. They give you at least two weeks to make up missed payments. Your account defaults if you cannot pay in this time.
Default notices apply to debts regulated by the Consumer Credit Act, like:
- Credit and store cards
- Payday loans
- Personal loans
- Hire purchases
Does a default notice affect your credit rating?
A default notice does not affect your credit file, but the account defaulting does.
Your credit file will show that you did not make your agreed payments. This impacts your credit score.
Creditors may think the default makes you high risk to not pay them back. This makes it harder to get:
- New loans
- A new credit card
- A new mortgage
- Certain bank accounts
Find out more about how debt affects your credit file.
The people you owe must send you a default notice and give you time to act if the debt is regulated by the Consumer Credit Act.
What happens when you get a default notice?
The people you owe ask you to pay the full amount owed instead of instalments. You can ask to pay in affordable instalments, but they may not agree.
After the account defaults, the people you owe can:
We can help if you are worried about missing payments and getting a default notice. We will look at your situation and give you free, personalised advice.