What Types of Default Listings are There?

What Types of Default Listings are There?

At Clean Credit we see two common types of default listings appearing on our clients' credit files. These are a 'payment default' and a 'clearout' or 'serious credit infringement'. Here is some valuable information about what these listings mean.

At Clean Credit we see two common types of default listings appearing on our clients’ credit files. These are a ‘payment default’ and a ‘clearout’ or ‘serious credit infringement’. Here is some valuable information about what these listings mean.

Payment Default Listings

This is the most common negative listing. For consumer payment default listings an account needs to be a minimum of 60 days in arrears before the credit provider can record a default. However for commercial defaults this can be can little as 7 days. For consumers, credit providers need to issue a formal demand notice no less than 30 days after the account becomes due and payable, They must wait a further 30 days from the date of this notice before recording a payment.

Before recording a default, a credit provider must post a demand notice to the last known address they have for the borrower, however they are not obliged to try and contact them on other methods such as phone or email. A payment default is recorded on a credit report for a 5 year period. Many people think that if they pay the account this will remove the listing from their credit file. Unfortunately this is not the case as the listing will remain regardless of wither it is paid or not.

Typical information recorded on a credit file for payment default listings:

  • The credit provider that recorded the default
  • The amount of the default
  • The date the default
  • If the account is being managed by a third party such as a debt collector
  • The status of the account e.g., unpaid / Paid / Settled

Clearout/ Serious Credit Infringement 

A clearout or serious credit infringement listing is recorded by a credit provider when they believe the credit borrower is trying to avoid their responsibilities under the credit contract and it is believed they have no intention of paying the account. This listing often is made when people move address and do not update the credit provider. Moving address and losing track of an account does not in itself necessary mean a credit borrower is purposely trying to avoid paying the account, however this is how credit providers often interprets this.

Prior to a credit provider recording a clearout or serious credit infringement they must make repeated attempts to reach the credit borrow on all known forms of communication, including written correspondence, phone, email and in some cases have an agent visit the last known address of the creditor. A clearout or serious credit infringement is recorded on a credit report for a 7 year period. Many people think that if they pay the account this will remove the listing from their credit file. Again, this is unfortunately not the case as the listing will remain regardless of wither it is paid or not. A clearout or serious credit infringement is viewed as highly negative listing and people with this type of credit listingwill find it very difficult to secure any form of credit.

Typical information recorded on a credit file for a clearout or serious credit infringement:

  • The credit provider that recorded the listing
  • The amount out standing
  • The date the listing was recorded
  • If the account is being managed by a third party such as a debt collector
  • The status of the account e.g., unpaid / Paid / Settled

Clean Credit is one of Australia’s most respected credit repair companies. We have helped many people remove negative credit listings such as defaults and judgements from their credit files. Find out more about our credit repair service.

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