What is a credit default
A credit default appears on your credit report when a debt isn't paid on time and becomes very overdue. It's a sign that payments were missed and can impact your credit score.
HOW DOES A DEFAULT HAPPEN
A default is usually listed when:
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You owe more than $150, and
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The payment is at least 60 days overdue, and
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The lender has tried to contact you and sent a formal notice
It doesn’t happen because you missed one payment — it happens when the debt is ignored or unpaid for some time.
DOES IT AFFECT MY ABILITY TO BORROW
Yes. A default can:
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Make it harder to get approved
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Reduce how much you can borrow
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Increase interest rates
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Limit lender options
The newer the default, the greater the impact.
HOW LONG WILL IT STAY ON MY CREDIT FILE
A default stays on your credit report for 5 years, even if you later pay it.
Paying it updates the status to "paid" which appears more favourable to lenders when you apply for credit. However, the record still remains.