Quick answer
You can only remove a default from your Australian credit file if it's wrong: the debt wasn't yours, it was under $150 or less than 60 days overdue, the required notices weren't sent, a hardship request was pending, or the debt was in dispute. Ask the credit provider or the bureau to correct it, which is free. An accurate default stays for five years, even once paid, but can be updated to show it's settled.
Key points
- Accurate defaults stay for five years from listing; paying one changes its status, not its expiry date
- Removal works when the listing broke a rule: the amount, the 60 days, the notices, a pending hardship request or a disputed debt
- Correction requests are free and must generally be handled within 30 days, with AFCA or the OAIC as free escalation routes
- You don't need a paid credit repair firm to fix errors; they can't remove correct information either
- Many non-bank and secured lenders will lend with a paid default on file, and some pay out an unpaid one at settlement
Here’s the honest version, before anyone sells you a shortcut: an accurate default can’t be deleted. Not by paying it, not by asking nicely, and not by hiring someone. It stays for five years.
But a surprising number of defaults aren’t accurate, or weren’t listed properly. Those can come off, and the process costs nothing. The work is figuring out which kind you have.
Is your default actually removable?
A default is legitimate only if the credit provider followed the rules when it listed it. Go through these six tests. If any one fails, you have grounds to ask for removal.
| Test | What the rule requires | What to look for |
|---|---|---|
| 1. Is it yours? | The debt belongs to you | Identity theft, a mix-up with someone of a similar name, a former partner’s account |
| 2. Was it big enough? | At least $150 overdue | Small balances, especially once fees are stripped out |
| 3. Was it late enough? | At least 60 days overdue | A listing made soon after the first missed payment |
| 4. Were you warned? | Written notice of the overdue amount, then a separate notice at least 14 days before listing | Notices sent to an old address the provider knew was out of date, or not sent at all |
| 5. Was hardship pending? | No listing while a hardship request is being considered or was only just refused | You’d asked for help, in writing or by phone, before it was listed |
| 6. Was the debt disputed or out of time? | Not listed while you’re genuinely disputing it, and not once the debt is too old to recover | An open complaint about the bill, or a debt whose last payment was more than six years ago |
The dollar and day thresholds come straight from the privacy regulator’s description of default information. The notice and hardship rules sit in the Privacy Act and the industry credit reporting code.
Two other common errors are worth checking at the same time: a paid default still showing as unpaid, and the same debt listed twice (once by the original creditor and again by a collector).
How do you dispute a default? The steps
Step 1: Get both reports
Order your free consumer reports from Equifax and from Experian. Note the creditor’s name, the amount, the date listed and the account number for each default. A default may appear with one bureau and not the other.
Step 2: Gather your evidence
Pull together whatever supports your ground for removal. That might be emails showing you disputed the bill, a hardship request with the date you sent it, proof you’d told the provider your new address, a police report for identity theft, or bank records showing payment.
Step 3: Ask for a correction in writing
Write to the credit provider that listed the default. You can also go to any credit reporting body under the regulator’s “no wrong door” approach, and it has to consult the provider. State the specific rule you say was broken, attach the evidence and ask for the listing to be removed.
Corrections are free. The provider or bureau must take reasonable steps to correct incorrect information within 30 days, or a longer period you agree to in writing. The regulator stresses that 30 days is the maximum, not the standard.
Step 4: Read the reply carefully
If they agree, the bureau removes the default and should tell anyone who received your report recently. If they refuse, they must explain why in writing and tell you about your right to complain externally.
Step 5: Escalate for free
You can take the complaint to the Australian Financial Complaints Authority, whose decisions can bind the lender, or to the Office of the Australian Information Commissioner. Both are free. AFCA is usually faster for disputes with banks, lenders, telcos and energy retailers that are members. The OAIC may decline a complaint lodged more than 12 months after you became aware of the problem, so don’t sit on it.
Our guide on how to complain about a lender explains what AFCA can and can’t do for a small business.
What if the default is correct?
Then the aim shifts from removal to damage control.
Pay it or settle it. Once paid, the provider should update the listing to show it as paid. The five-year clock doesn’t restart, and doesn’t shorten either. A paid default reads much better to a lender than an unpaid one, especially a default of a few hundred dollars that’s clearly a forgotten bill rather than a pattern.
Write down the story. Lenders ask about defaults. “A $612 electricity bill at a rental I’d moved out of, paid in March 2025” takes the sting out. Have the explanation ready before you apply.
Build fresh history on top. Under comprehensive credit reporting, two years of on-time repayments on your home loan and cards sit alongside the default. A lender reading a clean recent record treats an old default as history. Our explainer on comprehensive credit reporting and your business shows how that positive data works.
Watch the expiry date. If the default drops off in four months, it may be worth timing a non-urgent application around it.
If the default is standing between you and money your business needs now, check your options with us without any mark on your file; it’s a one-minute enquiry.
Should you pay a credit repair company?
Moneysmart’s guidance is blunt: you don’t need to pay a credit repair firm to fix errors, because you can ask for corrections yourself for free, and in most cases correct defaults can’t be removed by anyone.
Some firms do useful work on complex disputes. Others charge substantial fees for letters you could write in an evening, sometimes payable whether or not anything changes. If you’re considering one:
- ask exactly which rule they say the creditor broke
- get all fees in writing, including what’s payable if they fail
- check their credit licence on ASIC’s professional register
- walk away from anyone promising to remove an accurate listing
A free financial counsellor can also help with a dispute. For owners, the government-funded Small Business Debt Helpline offers free, confidential counselling that covers personal debts and guarantees as well as business ones.
Example: a default listed during a billing dispute
Consider an illustrative case. A landscaping business owner in Toowoomba moves premises and disputes the final electricity bill for the old site, arguing she was charged for two months after handing back the keys. The retailer doesn’t respond, refers the $1,180 to a collector, and a default appears on her personal file eight months later.
When she applies for equipment finance for a new ride-on mower, the lender’s check of her file as guarantor shows the unpaid default and the application stalls.
She orders both reports, finds her original dispute emails, and writes to the retailer explaining that the debt was in genuine dispute when it was listed and that the notices went to the old premises after she’d given her new address. The retailer doesn’t fix it within 30 days, so she lodges a complaint with AFCA. The retailer reviews its file, finds the address error, removes the default and drops the disputed charges.
Total cost: a few hours and some emails. The finance application goes back in with a clean explanation and a clearer file.
How do business lenders treat a default?
Lenders don’t all read defaults the same way. Roughly:
- Banks tend to decline while a default is unpaid or recent. A small, paid, older default with a good explanation is sometimes fine. If your bank does say yes, its pricing is often the best on offer, so it’s worth asking.
- Non-bank lenders for unsecured business finance usually care more about the size, age and type of default and about your bank statements. A paid telco default rarely matters; a recent default to another lender matters a lot.
- Property-secured lenders focus on equity and the exit. Many will lend with an unpaid default and pay it out from the loan at settlement.
There’s more detail on matching lender to file in business loans with defaults and business loans after paid defaults. For the plain-English definition to share with a business partner, see our glossary entry on defaults.
Mistakes that keep defaults around longer
- Applying everywhere at once. Each declined application adds an enquiry, so a default turns into a default plus six enquiries.
- Paying a collector without getting the update in writing. Ask the collector to confirm it will update the listing to paid.
- Assuming the company’s default is on your file. A default against your company is on the company’s commercial file. It reaches your personal file only if you guaranteed the debt or traded as a sole trader. Our guide to improving your business credit score covers the company side.
- Ignoring a serious credit infringement flag. If a lender has recorded you as having deliberately avoided a debt, that stays for seven years. If you never meant to dodge it, dispute the flag directly.
A default on file doesn’t have to mean no
Some of the owners we speak with have spent months trying to get a default removed when the business needed funding much sooner. Sometimes the right move is to fix the listing. Sometimes it’s to find a lender who’ll look past it, or who’ll clear it as part of the loan.
Our enquiry is quick, about a minute, and asking leaves your credit score exactly as it is. We don’t hand your file to a string of lenders, which means no unexpected calls afterwards. A real person reads it and calls you to work through what’s realistic. Tell us about the default, the amount and whether it’s paid; the more accurate the form, the better our first suggestion will be.
Frequently asked questions
Can I get a paid default removed from my credit file?
Not just because you've paid it. Once you pay, the credit provider should update the listing to show it as paid, but the default stays for five years from when it was first listed. It only comes off early if the listing was wrong in the first place.
How long does a default stay on my credit file?
Five years for a default. A serious credit infringement, which is recorded when a lender believes you've deliberately avoided a debt, stays for seven years. The clock runs from when the information was first collected, and updating a default to paid doesn't restart it.
Do credit repair companies actually work?
They can only ask for incorrect information to be fixed, which you can do yourself for free. Moneysmart warns they can charge high fees for that. If a firm promises to remove an accurate default, treat it as a warning sign and check its credit licence on ASIC's register.
What if I never received the default notice?
The credit provider must send written notice of the overdue amount and a further notice before listing. If it had your current address and sent the notices somewhere else, or can't show it sent them at all, that's a valid ground to dispute the listing. Ask the provider for copies and the dates they were sent.
Will a default stop me getting a business loan?
Not necessarily. Banks generally avoid recent or unpaid defaults, but many non-bank lenders will consider a small or paid default with clean bank statements, and property-secured lenders often look past one altogether. Being upfront about it matters more than most owners expect.
Can a default be listed on a debt that's years old?
A default can't be listed once the debt is out of time for recovery, which in most states is six years from the last payment or acknowledgement. If an old debt has been bought by a collector and listed late, check the dates carefully.