How Long Does a Default Stay on Your Credit File in Australia?

Quick Answer: A default stays on your Australian credit file for exactly 5 years from the date it was listed — not the date the debt occurred, not the date you paid it, and not the date you became aware of it. The 5-year clock starts on the day the credit provider lodged the listing with the bureau. After 5 years, the bureau must remove it. Paying the debt does not shorten this period. However, defaults listed in breach of the Privacy Act 1988 can often be removed much earlier through a formal challenge.

Five years feels like a long time when a default is blocking your home loan, your car finance, or a rental application. The question most people ask when they discover a default isn't "how long does it stay?" — it's "how do I get rid of it sooner?"

This guide answers both questions precisely, without filler.

Exactly How Long Each Negative Entry Stays in Australia

Three Things That Do NOT Shorten a Default's 5-Year Period

1. Paying the debt

This is the most common misunderstanding. Paying a default changes its status from "unpaid" to "paid" — visible to any lender who checks your file. But the listing itself remains for the full 5 years from the original listing date. Paying is not the same as removing.

2. Negotiating with the creditor

Unless the creditor agrees to remove the listing as part of a settlement (which some do, but most won't), settling or paying the debt at a discount does not trigger removal. Get any agreement to remove the listing in writing before making payment if this is your strategy.

3. Disputing the amount

Disputing the amount after the listing has been placed does not remove the default — even if your dispute is successful and the amount is corrected. The corrected listing still stays for 5 years. An amount correction is a separate outcome from removal.

When Does the 5-Year Clock Actually Start?

The 5 years runs from the date the credit provider listed the default with the bureau — not the date of the original missed payment, not the date the debt was incurred, and not the date you became aware of the listing.

This matters because there's often a gap of months between when a payment is missed and when a default is eventually listed. Your credit file will show both dates: the "date of default" (when the missed payment occurred) and the "date listed" (when it was reported to the bureau). The 5-year retention period runs from the date listed.

Check your credit report carefully. If you're unsure which date is which, contact the bureau directly for clarification.

Can a Default Be Removed Before 5 Years?

Yes — and this is where most people are surprised.

Under the Privacy Act 1988 and Credit Reporting Code, credit providers must follow specific procedural rules when listing a default. When they don't, the listing can be challenged and removed, regardless of how much time is left on the 5-year period.

The most commonly successful removal grounds are:

1. No Section 21D pre-listing notice — the credit provider must issue a written notice at least 30 days before listing. If they didn't, the listing is unlawful.
2. Listed while a dispute was active — a default cannot be listed while the debtor has a genuine, formal dispute open. Many are listed anyway.
3. Incorrect amount — the amount listed differs from the actual amount owed at the time of listing.
4. Statute-barred debt — in most Australian states, a debt older than 6 years that has not been acknowledged cannot be legally enforced and should not be listed.
5. Listing has expired — the 5-year period has passed and the bureau hasn't removed it yet.

ACS successfully removes defaults through these grounds with a 98% success rate on accepted cases. Removals typically take 30–90 days.

Real Case Study: Nadia, Melbourne — 4 Years Left on Default. Gone in 36 Days.

Nadia, 38, an event coordinator from Melbourne, had four years and three months remaining on a $490 default from a utility company. She'd switched providers and there had been a billing dispute over the final account. The utility company had listed the default eight months after she switched — while she still had an active complaint with the Energy and Water Ombudsman Victoria.

She'd been told by multiple people — a bank manager, a friend — that she just had to wait. Four years.

Her ACS assessment took 20 minutes. We identified that the default had been listed while Nadia's formal complaint to the Energy Ombudsman was still unresolved — a clear breach of the Credit Reporting Code. The Credit Reporting Code is explicit: a default cannot be listed while a formal dispute remains open.

We lodged the challenge. The utility company's compliance team initially delayed, but when we provided evidence of the Ombudsman complaint date and the default listing date, the breach was undeniable.

Result: The default was removed 36 days after we lodged the challenge. Nadia's Equifax score moved from 489 to 718. Four years of waiting, resolved in 36 days. She applied for a home loan and was approved through a mainstream lender. Subject to individual assessment; results may vary.

What Happens When a Default Reaches 5 Years?

The bureau is legally required to remove it from your file. This happens automatically in most cases — bureau systems are designed to clear expired listings. In practice, however, automated systems occasionally miss entries, particularly those associated with older or closed accounts.

If you check your file and notice a default that appears to be more than 5 years old:

1. Calculate the listing date from the credit report (not the date of the missed payment)
2. If the listing date is more than 5 years ago, contact the bureau directly — Equifax, Experian, or Illion — and request removal
3. The bureau must action this — it's not discretionary

ACS can assist with this process if the bureau is unresponsive.

Timelines: Waiting vs Removing

Frequently Asked Questions

Does a default fall off automatically after 5 years in Australia? Yes — bureaus are required to remove defaults exactly 5 years from the listing date. In most cases this happens automatically. Occasionally expired listings remain through system errors; if that happens to you, contact the bureau directly — Equifax, Experian, or Illion — and request removal citing the Privacy Act 1988.

Does paying a default remove it from your credit file in Australia? No. Paying a default updates its status from "unpaid" to "paid" but the listing remains on your file for the full 5 years from the original listing date. The only ways to remove a default before 5 years are: a successful challenge on legal grounds under the Privacy Act 1988, or in rare cases, a creditor agreeing to remove the listing as part of a negotiated settlement.

When does the 5-year default period start — from the missed payment or the listing date? The 5-year retention period begins from the date the default was listed with the credit bureau — not the date of the original missed payment. Your credit report will show both dates. The listing date is the one that determines when the default expires.

Can I negotiate with a creditor to remove a default from my file? Some creditors will agree to remove a default as a goodwill gesture or as part of a formal settlement, particularly for small amounts or long-standing customers. This is not a legal right and is at the creditor's discretion. If they agree, get it in writing before making any payment. Do not pay first and assume removal will follow.

How long does bankruptcy stay on your credit file in Australia? Bankruptcy listings remain for 5 years from the date of discharge, or 7 years from the date of the bankruptcy order — whichever is longer. If you were discharged after 3 years (standard), the listing could stay for up to 7 years from the original filing date.

How much does a default reduce your credit score in Australia? A single default typically reduces an Equifax score by 80–200 points at the time of listing. The precise impact depends on your score before listing, the amount of the default, how recent it is, and the composition of the rest of your file. Multiple defaults compound the damage significantly.

Don't Just Wait. Find Out If Your Default Can Go Now.

Most Australians with defaults assume waiting is the only option. Many of those defaults were listed unlawfully — and could be removed in 30–90 days with the right challenge.

Australian Credit Solutions is ASIC-licensed (ACL 532003), lawyer-led by Principal Solicitor Elisa Rothschild, and has helped over 5,000 Australians remove unlawful defaults 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.

Related reading: How to Remove a Default → | Default Removal Services → | Fix Bad Credit →