What is a default?

A default is also referred to as an overdue debt. A consumer payment default is debt equal to or more than $150 and is more than 60 days overdue. For example, if you have a telephone bill of over $150, and it was due more than 60 days ago, it could be listed on your credit report as a payment default by the telco provider. 

Before listing a consumer default, the credit provider must take a number of steps such as sending two separate written notices to your last known address requesting payment stating that the debt may be listed with a credit reporting body (like Equifax).
In the case of commercial credit the minimum default amount is $100. Before listing commercial defaults or overdue debts commercial credit providers or their agents must send a notice to your last known address stating their intention to list the default amount with a credit reporting body such as Equifax.

Potential credit providers may look unfavourably on applicants with a history of overdue accounts, so it’s a good idea to avoid defaults getting onto your credit report. To do this, you need to ensure you pay your bills before they become overdue.
Both consumer and commercial payment defaults stay on your credit report for five years, even when you have paid the overdue amount. The status of the default is updated to paid which can be looked upon more favourably by lenders but it will remain as part of your credit history.

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