How to Remove a Default From Your Credit File in Australia

Quick Answer: A default can be removed from your Australian credit file before its 5-year expiry if it was listed in breach of the Privacy Act 1988 or Credit Reporting Code. The most common grounds are: no Section 21D pre-listing notice was issued, the debt was disputed when listed, the amount is incorrect, or the debt is statute-barred. You can challenge it yourself by contacting the credit provider and bureau, or use a professional service. Successful challenges typically resolve in 30–90 days with immediate score improvement on removal.

A default on your credit file is not necessarily permanent. That's the most important thing to understand — and the thing most people don't know. Most Australians with defaults either wait five years for them to expire, or assume paying the debt fixes the problem. Neither approach is true, and both leave thousands of dollars on the table.

Under Australian law, specifically the Privacy Act 1988 and the Credit Reporting Code, credit providers must follow strict procedural rules before listing a default. When they don't — and they frequently don't — the listing can be challenged and removed, sometimes in as little as two to three weeks.

This guide explains exactly how that process works.

Can a Default Actually Be Removed Early in Australia?

Yes — but only on specific legal grounds. The default must have been listed in a way that breached the rules credit providers are legally required to follow. There is no mechanism for removing a default simply because you've paid it, because it's inconvenient, or because you've had a change in circumstances.

The legal basis for removal sits in two instruments: the Privacy Act 1988 (the primary legislation governing credit reporting in Australia) and the Credit Reporting Code (the industry code that sets out the detailed procedural rules credit providers must follow).

When a credit provider breaches either instrument in the process of listing a default, the Privacy Act gives you the right to have the entry corrected — which means removed.

The Legal Grounds for Default Removal

These are the main grounds on which defaults are successfully challenged in Australia:

The Section 21D notice requirement is the most commonly breached rule. Before listing a default, a credit provider must send a written notice to the debtor at least 30 days before the listing, informing them of the intention to list and giving them the opportunity to repay or dispute. Skipping this step is a clear, documented breach — and it's far more common than creditors would like to admit.

How to Remove a Default Yourself: Step by Step

1. Get your credit report from all three bureaus

Start with all three — Equifax (equifax.com.au), Experian (experian.com.au), and Illion (creditreport.com.au). A default might appear on one but not another. Under the Privacy Act 1988, you're entitled to a free report from each.

2. Identify the default and gather everything you know about it

Write down: the creditor name, the amount listed, the date listed, and whether you received any written notice before it appeared. Check your records for any correspondence with the creditor, payment receipts, dispute letters, or complaints you lodged at the time.

3. Identify the grounds for your challenge

Ask yourself:

• Did you receive a written notice at least 30 days before the listing? (Section 21D)
• Was there an active dispute with the creditor at the time of listing?
• Is the amount listed different from what you actually owed?
• Is the debt more than 6 years old?
• Did you pay the debt before it was listed?

If the answer to any of these is yes, you have potential grounds.

4. Write to the credit provider formally

Put your challenge in writing — email is fine, but keep a copy. State clearly:

• Your full name and the account in question
• The specific breach you're asserting (e.g., "No Section 21D notice was issued as required under the Privacy Act 1988")
• The outcome you're seeking (removal of the default)
• A reasonable timeframe for their response (30 days)

Be factual. Don't be emotional. Don't speculate. Cite the specific law.

5. If the provider doesn't respond or refuses, escalate

Lodge a formal complaint with the relevant credit bureau (Equifax, Experian, or Illion) requesting correction under the Privacy Act 1988. The bureau has an obligation to investigate.

If that's unresolved, escalate to the Australian Financial Complaints Authority (AFCA) at afca.org.au. AFCA is a free external dispute resolution service with the power to order removal.

6. Document everything

Keep records of every letter, email, call log, and reference number. If the matter escalates to AFCA, this documentation becomes your evidence.

Real Case Study: Yuki, Sydney — $730 Default Removed in 27 Days

Yuki, 31, a nurse from Sydney, discovered a $730 default on her Equifax file from a furniture rental company. She'd ended a 12-month rental agreement early — the company claimed she owed a break fee. Yuki disputed the fee at the time, arguing the contract terms were unclear. The company listed the default anyway.

She contacted ACS six months after discovering the listing. During her assessment, we established two separate grounds: the company had not issued a Section 21D pre-listing notice, and the default had been listed while Yuki's formal written dispute was still open and unresolved.

We drafted and lodged the formal challenge citing both the Privacy Act 1988 and Credit Reporting Code breaches. The furniture company's compliance team responded within 14 days, acknowledging the procedural failures. The default was removed on day 27.

Result: Yuki's Equifax score moved from 534 to 742 in 27 days — a 208-point improvement. She had been planning to apply for a home loan later in the year. The pre-ACS assessment from a mortgage broker had indicated her score would likely land her with a non-conforming lender at around 9.5% p.a. Post-removal, she was approved through a major bank at 6.24% p.a. On her $480,000 loan over 30 years, the interest saving is approximately $217,000. She only paid when we succeeded. Subject to individual assessment; results may vary.

DIY vs Professional Default Removal

Both paths are legitimate. The right choice depends on your situation.

The DIY vs professional credit repair guide on the ACS education hub covers this comparison in detail. A free credit assessment from ACS is also a useful first step — it tells you whether grounds exist without any obligation to proceed.

Frequently Asked Questions

Can I remove a default from my credit file by paying it? No. Paying a default updates its status from "unpaid" to "paid" in the bureau's records, but the default listing itself remains on your file for the full 5 years from the listing date. Paying does not remove it. The only way to remove a default before the 5-year expiry is to successfully challenge it on legal grounds under the Privacy Act 1988.

How long does it take to remove a default from a credit file in Australia? Most successful removals are completed in 30–90 days. Simple cases with clear procedural breaches (like no Section 21D notice) often resolve in 30–45 days. More contested cases — where the creditor initially disputes the challenge — can take up to 90 days through AFCA. ACS's average resolution time across all cases is 47 days.

What happens to my credit score when a default is removed? Score improvement is immediate and significant. Removing a single default typically improves an Equifax score by 80–200 points, depending on the composition of the rest of the file. Clients who have multiple entries removed in a single process have seen score improvements of 200–350+ points.

Can I remove a default I actually owed? Only if the process by which it was listed was unlawful — for example, if no Section 21D notice was issued. Whether the underlying debt was genuinely owed is separate from whether the listing process was compliant. Many legitimate debts are listed using non-compliant processes, creating grounds for removal even where the debt itself was real.

What if the creditor refuses to remove the default? Escalate to the credit bureau's dispute process, then to AFCA. AFCA has the power to order removal where it finds the listing was in breach of the Privacy Act 1988 or Credit Reporting Code. If ACS is representing you, we manage this escalation process on your behalf.

Do defaults get removed automatically in Australia? After 5 years from the listing date, defaults must be removed by the bureau. However, bureau systems don't always catch expired listings automatically — if you notice a default that's more than 5 years old still on your file, request removal immediately. Subject to individual assessment.

Find Out If Your Default Can Be Removed

A free assessment from Australian Credit Solutions reviews your credit file, identifies any breaches, and tells you clearly whether your default can be challenged — and what the realistic outcome looks like. No obligation. No commitment. Just clarity.

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: Default Removal Services → | Improve Your Credit Score → | DIY vs Professional Credit Repair →