How Long Does Bad Credit Last in Australia? (Exact Timelines)

Quick Answer: In Australia, bad credit entries last: defaults — 5 years from listing; court judgements — 5 years; serious credit infringements — 7 years; bankruptcy — 5 years from discharge or 7 years from order (whichever is longer); hard enquiries — 5 years; late payment history (CCR) — 2 years rolling. Paying a debt does not shorten these periods. Defaults listed unlawfully under the Privacy Act 1988 can be removed professionally in 30–90 days, regardless of time remaining.

The question "how long does bad credit last?" sounds like it should have a simple answer. It doesn't — because different types of negative entries have different durations, different clocks, and different rules for when and how they're removed.

This guide gives you the exact timelines for every type of negative credit entry in Australia.

Complete Timeline: How Long Every Negative Entry Lasts

The Most Important Misunderstandings

Paying a default doesn't reset or shorten the clock. A paid default carries the same expiry date as an unpaid one. The listing stays for 5 years from when it was listed — full stop.

The clock starts from when it was listed, not when you missed the payment. There is often a gap of months between a missed payment and the eventual default listing. Your credit report shows two dates — "date of default" (missed payment) and "date listed" (added to file). The 5-year period runs from "date listed."

Different entries on your file have different expiry dates. A default from 2022 and a court judgement from 2024 expire at different times — 2027 and 2029 respectively. You need to look at each entry separately.

How Long Bad Credit Affects Lending in Practice

Even within the official 5-year period, the practical impact of a default on your lending options changes as the entry ages:

This ageing effect is not an official policy — lenders don't publish rules about how they weight a 4-year-old default vs a 1-year-old one. But in practice, older entries carry less weight in credit decisions than recent ones.

Real Case Study: Conor, Geelong — Calculated the Expiry Date. Removed It 2 Years Earlier.

Conor, 44, a logistics manager from Geelong, had a $910 default from a finance company on his Equifax file. He knew it was there and had been counting down: the listing date was March 2022, which meant it would expire March 2027. He had more than two years to wait.

He contacted ACS not expecting much — he figured there was nothing to do but wait. His assessment found otherwise. The finance company had listed the default while Conor had an active payment arrangement in place — an arrangement he'd negotiated directly with the company nine months before the listing. Listing a default while a payment arrangement is being honoured is a breach of the Credit Reporting Code.

We challenged on that ground. The finance company initially disputed our reading of the arrangement, but documentation Conor had kept — emails confirming the arrangement — was unambiguous. The default was removed in 67 days.

Result: Conor's Equifax score moved from 488 to 704 in 67 days — a 216-point improvement. Two years and three months before the default would have expired on its own. He applied for a home loan and was approved at 6.58% p.a. — a rate he'd been told he wouldn't see until 2027 at the earliest. On his $490,000 loan over 30 years, borrowing at this rate rather than waiting 2+ years for a better rate saved him an estimated $40,000 in additional interest from starting sooner. He only paid when we succeeded. Subject to individual assessment; results may vary.

Frequently Asked Questions

How long does bad credit last in Australia? Most bad credit entries — defaults and court judgements — last 5 years from the listing date. Serious credit infringements stay for 7 years. Bankruptcy lasts 5 years from discharge or 7 from the order date (whichever is longer). Late payment history under CCR rolls off after 2 years. Hard enquiries from credit applications stay for 5 years. None of these periods are shortened by paying the debt.

Does bad credit go away automatically in Australia? Yes — entries must be removed automatically when their retention period expires. Defaults after 5 years, enquiries after 5 years, late payment history after 2 years. Bureau systems generally handle this automatically, but occasional errors mean expired entries sometimes linger — always check your file around the expected expiry date.

Can bad credit be fixed before it expires in Australia? Yes — if the negative entry was listed in breach of the Privacy Act 1988 or Credit Reporting Code. Defaults challenged on grounds like no Section 21D notice, listing during an active dispute, or incorrect amounts can be removed in 30–90 days regardless of how much time remains on the 5-year period.

Does having bad credit affect more than just loans? Yes. Active defaults or a poor credit score can affect rental applications (property managers run credit checks), employment in some industries (finance, government, security), utility connections (providers may require deposits), phone plan access, and even some insurance assessments.

How long does it take to rebuild after bad credit clears? When entries expire or are removed, score improvement is immediate and significant. But mainstream lender access also depends on your positive history at that point. Rebuilding through consistent on-time payments while the negative entries are still present means your file is in much better shape the moment the default clears — rather than starting from scratch. Most people reach the Good Equifax band (661+) within 6–18 months of consistent rebuilding after their last negative entry is gone.

What is the fastest way to deal with bad credit in Australia? If any negative entries were listed unlawfully — no Section 21D notice, listing during a dispute, incorrect amount — professional removal is the fastest path: 30–90 days versus 1–5 years of waiting. A free assessment from ACS determines viability in 24 hours.

Don't Just Count Down the Days — Find Out If You Can End It Sooner

A free assessment from ACS tells you whether your specific negative entries can be challenged — and on what grounds. Many Australians are waiting on a clock they don't have to.

Australian Credit Solutions is ASIC-licensed (ACL 532003), lawyer-led by Principal Solicitor Elisa Rothschild, and has helped over 5,000 Australians clear credit entries early since 2014. No Win No Fee. 98% success rate on accepted cases.

Get My Free Assessment → 📞 0489 265 737 🛡️ ASIC Licensed ACL 532003 | ⭐ 4.9/5 from 976+ Reviews | 🏆 Award Winner 2022–2024

Australian Credit Solutions Pty Ltd holds Australian Credit Licence ACL 532003. Credit repair services are subject to individual assessment. Results may vary. This article provides general information only and does not constitute legal or financial advice.

Free credit reports: equifax.com.au | experian.com.au | creditreport.com.au

Related reading: How Long Does a Default Last? → | Fix Bad Credit → | Default Removal Services →