Defaults stay on your credit file for six years, but their effect fades long before that. Most specialist lenders concentrate on the last two to three years, and a growing number of mainstream lenders will overlook older, smaller defaults entirely. Recent conduct matters far more than distant history.
What a default actually is
A default is recorded when a lender decides an account has broken down — usually after several missed payments — and closes it with a balance outstanding.
It is more serious than a missed payment and less serious than a County Court Judgment. It is a lender's own record rather than a court order.
The key date is the date of default, not the date the debt was taken out and not the date you eventually paid it. The six years runs from the default date. Satisfying it later does not restart the clock — and does not shorten it either.
That distinction is worth knowing, because people often assume paying a default removes it. It does not. It marks it satisfied, which helps, but the record stays until six years from the original default date.
How lenders weigh it
Four factors:
Age. The dominant one. A default from four years ago is close to irrelevant to many lenders. One from six months ago points firmly to specialist lending.
Value. Thresholds are common. A £150 default is treated very differently from a £7,000 one, particularly once it has some age.
Satisfied or not. Satisfied is materially better. Some lenders require all defaults to be settled before completion; others will lend with them outstanding, at a price.
Type of credit. This one surprises people. Lenders take a hierarchy:
- Mortgage or secured loan defaults — the most serious. You have defaulted on exactly the kind of commitment you are now applying for
- Unsecured loan or credit card defaults — significant
- Telecoms, utilities and catalogue defaults — the least serious, and frequently disregarded once they have any age
A forgotten mobile phone contract from an old address is a very different matter from a defaulted loan.
The typical lending ladder
Roughly how the market tiers, though every lender sets its own rules:
| Time since default | Typical position |
|---|---|
| Under 12 months | Specialist lenders only, larger deposit needed |
| 1-2 years | Specialist, wider choice, better rates |
| 2-3 years | Some mainstream lenders will consider, especially if satisfied and small |
| 3+ years | Many mainstream lenders, particularly for smaller defaults |
| 6 years | Drops off the file entirely |
Communications defaults deserve a specific mention
Mobile phone and broadband defaults are the most common form of adverse credit we see, and the most frustrating, because they are usually not about affordability at all.
The pattern is almost always the same: a contract was not properly cancelled when moving house or switching provider, bills went to an old address, and a small balance defaulted without the person ever knowing.
Many lenders will disregard a communications default entirely if it is small and over a certain age. If you have one, it is worth checking whether it was even correctly applied — providers do make mistakes, and a default recorded in error can be removed.
What to do now
1. Get all three credit reports. Experian, Equifax and TransUnion hold different data. A default on one may not appear on another.
2. Note the default date for each. That tells you when each will drop off, and whether waiting a few months materially changes your options.
3. Check them for errors. Wrong dates, wrong amounts, defaults showing unsatisfied when settled, and accounts you do not recognise are all common. Correcting one is often worth more than any amount of application strategy.
4. Settle what you can. Satisfied defaults are better than unsatisfied ones, and some lenders require it.
5. Keep everything else clean. Twelve to twenty-four months of perfect conduct after a default carries real weight.
Sometimes the answer is to wait
If your defaults are approaching two or three years old, or a small one is close to dropping off entirely, waiting a few months can move you into a materially better lending tier.
We will tell you when that is the case, rather than placing you on an expensive product now. It is not always what people want to hear, but it is usually worth thousands.
Call 0116 277 7536 or see adverse credit mortgages in Leicester.
More guides: specialist mortgage guides for Leicester.
