Credit Defaults And Your Mortgage

Credit Defaults are a result of non payment of a credit account, where your creditor or a debt collector has asked a credit reporting angency to record your credit as defaulted.

Credit Defaults and Lodgment Guidelines

  • Credit defaults amount must be greater than $150 or
  • A confirmed missing debtor where they can’t find you. This would be listed as a clear out.
  • 60 days or more has past since the due date of payment.
  • The creditor has asked you to make the payment via a phone call, letter or in person.

The creditor must also provide you notification that you may recieve credit defaults for the non payment prioor to the default being listed.

Credit defaults will be listed on your credit file for a period of 5 years, unless its a clear out in which case it will be 7 years.

If you pay the debt back after the default is listed, then the credit default would be updated as paid. Credit Defaults will not be removed. There may have been some confusion in regard to paying and clearing your default, which may have been a misrepresentation by a debt collector in their endeavours to obtain your money. Please note your creditor won’t usually remove a default once it is paid, unless they acknowledge they have listed the default in error by not following the above guidelines.

Mortgages With Credit Defaults

You can still get a mortgage with credit defaults against your name. There are finance options to consolidate your arrears, good and bad debts, defaults, credit judgements and more. If you are after a new mortgage than more than likely you will need to apply for a bad credit loan and also prove your current financial position is suitable for a loan. If you already have a mortgage and are struggling with debts, then a debt consolidation home loan may be the option to make things easier for you.

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If you have any further questions regarding credit defaults or judgements, or questions about your credit file call  the Loan Saver Network on 1300 796 850.