How to Remove a Default From Your Credit File Australia (2026)

Quick Answer: A default can be removed from your Australian credit file if it was listed in breach of the Privacy Act 1988 or the Credit Reporting Code — common grounds include failure to issue a valid Section 21D pre-listing notice, listing an incorrect amount, listing while a dispute was unresolved, or a statute-barred debt. Legitimate removal requires identifying the specific breach, lodging a formal dispute with the credit provider and bureau, and following up under your legal rights. Professional credit repair firms with legal expertise achieve significantly higher success rates. Most removals take 30–90 days.

A default on your credit file is not necessarily permanent. That's the most important thing to understand.

Under Australian law, every default must have been listed in compliance with specific rules. When those rules weren't followed — and they frequently aren't — you have legal grounds to have the listing removed. Not suppressed, not noted as disputed. Removed.

This guide explains exactly how, in plain English.

What Is a Default on Your Credit File?

A default is a formal negative listing recorded on your credit file when a creditor reports that you've failed to repay a debt. Under the Privacy Act 1988, a credit provider can list a default after a debt of $150 or more has been outstanding for at least 60 days and the required pre-listing notice has been issued.

Defaults stay on your credit file for 5 years from the date they were listed — not from when the debt was originally incurred, and not from when you paid it. Paying a default changes its status to "paid" but does not remove it.

A single default can drop your Equifax credit score by 100–200 points. That drop affects loan eligibility, interest rates, rental applications, and in some industries, employment checks.

When Can a Default Be Removed?

This is the question that matters. A default can be removed when it was listed in breach of the law — not simply because you disagree with it or because you've now paid it.

Ground 1 — Failure to issue a valid Section 21D notice Before listing any default, the credit provider must send a written notice giving you at least 30 days to respond. This is the most common ground for removal. Many creditors — particularly telcos and utility companies — fail to issue this notice at all, issue it to the wrong address, or get the required notice period wrong. If the notice wasn't issued correctly, the default is unlawful.

Ground 2 — Incorrect default amount The amount listed must reflect the actual arrears at the time of listing. If the figure is wrong — even by a small amount — the listing is inaccurate and can be challenged.

Ground 3 — Listed while dispute was unresolved A default cannot be listed while you have an active, genuine dispute with the creditor, or while a complaint is lodged with an external dispute resolution scheme (AFCA, TIO, or the relevant ombudsman). If listing occurred during a live dispute, it's a direct breach of the Code.

Ground 4 — Statute-barred debt In most Australian states, debts become statute-barred after 6 years — meaning the creditor can no longer sue to recover them. Listing a default on a statute-barred debt may be challengeable.

Ground 5 — Identity fraud If an account was opened fraudulently in your name, any associated default must be removed. This requires supporting evidence but is not contested by creditors when the fraud is demonstrated.

Ground 6 — Expired retention period Defaults must be removed 5 years after listing. If a bureau has failed to remove an expired listing, it can be forced off the file.

How to Remove a Default: Step by Step

1. Get your credit reports from all three bureaus — Equifax, Experian, Illion — and identify every default entry
2. Note the creditor, the amount listed, the listing date, and any reference numbers
3. Request the original Section 21D notice from the creditor — they are obligated to provide it
4. Review whether the notice was issued, to the correct address, with the correct amount, and with the required 30-day notice period
5. Check whether any dispute or complaint was active at the time of listing
6. If a breach is identified: lodge a formal written dispute with the credit provider
7. If the credit provider does not resolve the dispute: escalate to the relevant bureau and to AFCA or the Privacy Commissioner
8. Follow up in writing at every stage and retain all records

This process works. It is also slow when you're doing it alone — creditors don't prioritise investigating their own compliance failures. Professional representation with legal expertise significantly accelerates outcomes.

The Cost of Waiting vs Acting

Every month a removable default stays on your file has a measurable dollar cost.

Real Case Study: Renata, Hobart — $560 Default Removed, Home Loan Approved

Renata had been saving for her first home for 6 years. Her deposit was ready. Her income was solid. But every lender she approached knocked her back. A single $560 default from a TasNetworks electricity account had been sitting on her Equifax file for 19 months.

She found Australian Credit Solutions through a referral. We requested the original Section 21D notice from TasNetworks. It had been sent to a previous address — an address Renata had moved from 8 months before the default was listed. The Credit Reporting Code requires the notice to be sent to the debtor's current known address. Sending it to a known old address is a breach.

The listing was formally disputed on this ground. TasNetworks acknowledged the breach within 18 days. The default was removed from all three bureaus by day 26.

Renata's Equifax score moved from 498 to 682. She reapplied for a home loan within the month. Approved at 6.19% for $395,000.

Her mortgage broker confirmed the non-conforming rate before removal had been quoted at 9.6%. The rate saving over 30 years saved Renata approximately $232,000 in total interest.

She only paid when we succeeded.

Get a free assessment from Australian Credit Solutions →

DIY vs Professional Default Removal: Honest Comparison

DIY is a legitimate option when the breach is obvious and the creditor is cooperative. For most real situations — especially recent defaults from major telcos, banks, or utilities — professional representation produces better outcomes faster.

Frequently Asked Questions

Can a default be removed before 5 years in Australia? Yes — if it was listed in breach of the Privacy Act 1988 or Credit Reporting Code, it can be removed at any point during the 5-year retention period. The grounds for removal are about compliance failures in the listing process, not the age of the default.

Does paying a default remove it from your credit file? No. Paying a default changes its status from "unpaid" to "paid default" on your credit file, but the listing remains for 5 years from the original listing date. The only way to remove a default is to successfully dispute it on legitimate legal grounds under the Privacy Act 1988.

How long does default removal take in Australia? Most professional default removals take 30–90 days from lodging the dispute. Simple cases with clear breaches — particularly telco defaults where the Section 21D notice was never issued — can resolve in 14–30 days. Complex cases or defaults from major banks may take up to 90 days. Subject to individual assessment.

Can I remove a default myself for free? Yes — you can lodge disputes directly with the credit bureau and credit provider at no cost. The challenge is that creditors investigate their own compliance failures slowly and often without urgency. Professional representation under a No Win No Fee model provides legal expertise without upfront cost, and typically achieves results significantly faster.

What is a Section 21D notice and why does it matter? A Section 21D notice is the written notice a creditor must send before listing a default under the Privacy Act 1988. It must be sent to your current known address, specify the amount owed, and give you at least 30 days to respond. If this notice wasn't sent, wasn't sent to the right address, or contained the wrong amount, the subsequent default listing is unlawful and removable.

Will my credit score improve immediately when a default is removed? Yes — credit scores are recalculated when the bureau updates your file. Once a default is removed, the score adjustment typically occurs within 1–5 business days of the bureau processing the removal. Improvements of 100–200+ points are common after a single default removal.

Start With a Free Assessment

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Related Reading:

• Default removal services Australia
• How to improve your credit score Australia
• Credit repair Australia

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.