Default

A default is formally registered on a credit file when a borrower fails to make required payments for a sustained period - typically after three to six missed payments. Lenders serve a default notice before registering the default, giving the borrower time to bring the account up to date.

A default remains on a UK credit file for six years from the date of registration, regardless of whether it is subsequently repaid (satisfied). An unsatisfied default carries more weight with lenders than a satisfied one. Some lenders will not consider applications with defaults registered in the last two to three years; specialist lenders are more flexible.

For businesses, defaults can appear on both the company's credit file and on the director's personal credit file (particularly for sole traders or where personal guarantees were given). Always check both business and personal credit files before applying for finance.

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