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Credit Repair – How to remove black marks and defaults against your name

Discover how to take control of your finances and get your credit file back in shape.

Bad credit is a common source of concern for many people, especially if you’re thinking about how to finance a new home or car. Lenders look at your credit report to assess your ability to repay a new loan, so any black marks on it could reduce your chances of getting approved. Basically, if you have less than stellar credit history, it’s important to focus on improving your finances before approaching any prospective lenders.

Fortunately, there are ways that you can salvage your credit report, either by yourself or with the help of credit repair specialists. This guide explains credit repair, what it involves and whether it might be an option for you to consider before your next loan application.

How to repair your credit report

Step 1. Order a copy of your credit report

To kick things off, request a copy of your credit file from any or all of the credit reporting bureaus: Equifax, Dun & Bradstreet, and Experian. It is advisable to obtain all three reports because the details on your credit report may vary between each agency.

You are entitled to a free credit report from each agency once a year. It takes around 10 working days to get a copy of your credit history once you submit a request through these agencies. You may also purchase a copy of your credit file if you need it in a hurry, and receive it within one day.

Once you’ve received a copy (or copies) of your credit file, you can start looking through your history to identify any black marks or defaults.

Step 2. Identify the black marks and defaults

But what are black marks and defaults? The term “black marks” refers to any information on your credit file that may indicate you have trouble managing your money. Defaults, on the other hand, are a type of black mark – this term refers to any account with a payment that is overdue by 60 days or more. When you’ve received your report, these are the negative items or “black marks” to look for:

  • Missed payments. Your credit report retains negative repayment history for two years. This means that any missed payments on your mortgage, personal loans, or credit card accounts during the last two years will show up your credit file, lowering your credit score and hurting your chances of obtaining new credit.
  • Overdue accounts or payment defaults. Overdue amounts of $150 and above are recorded once they are 60 days overdue. Defaults can be extremely damaging to your credit reputation as they indicate that you are unlikely to repay your debts on time and may default on payments altogether. These listings remain on file for five years.
  • Clearouts or serious credit infringements. These are overdue accounts or payment defaults where the credit provider has not been able to contact you for six months. These types of listings indicate that you may default on payment and skip town after that. Clearouts and serious credit infringements stay on your report for seven years if they remain unpaid. If paid, these listings only remain on your report for five years and are defined as “payment defaults”.
  • Writs and summons. These listings relate to instances where you have been summoned to court to settle a debt. They stay on record for five years.
  • Court judgments. Court judgements including bankruptcies, personal insolvencies or debt agreements can stay on file for five years or longer, depending on when the case is officially resolved. For instance, bankruptcy goes off record two years from your date of discharge or five years from your date of bankruptcy, whenever is later.
  • Credit enquiries. Applications for any form of credit (including personal loans, mortgages and even utilities) can remain on your credit report for up to five years, regardless of whether they are approved. That’s why it’s important to only apply for credit you have a high change of being approved for, and to space out your applications over time.

Step 3. Remove the black marks and defaults

Please be aware that any repairs you make on your credit report are unlikely to have an immediate effect. Having said that, credit repair is a legitimate process of removing black marks from your credit file. It applies for black marks that may not belong on your credit history (i.e. errors), as well as listings that have outstayed their rightful duration.

Since the law surrounding credit reporting is complex and, in practice, not stringently enforced, lenders sometimes list defaults or missed payments without proper legal adherence. Credit repair agencies are experts at spotting these errors and may be more effective at repairing your report than you might be. But these companies can be costly to engage, so the following steps will help if you decide to attempt DIY repairs on your credit file.

  1. Request your credit report. You need to see an up-to-date version of your credit history before you can begin repairing it.
  2. Identify the negative listings. Using the list above, figure out exactly what information is hurting your credit score.
  3. Check for incorrect listings. Lenders can sometimes make listings in error. For example, they may list the same debt twice, list it on the wrong person’s account or wrongly list a debt as a default.
  4. Report any incorrect listings. If you come across any errors on your credit file, you can initiate an investigation by the credit reporting agency or agencies that have this mistake on file.
  5. Negotiate with your credit provider. If existing credit accounts are part of the problem, get in touch with your credit provider and try to negotiate a repayment plan that is manageable for you. This will help reduce missed payments and prevent debts from becoming defaults on your credit file.
  6. Consider getting external help. Aside from hiring a credit repair specialist who can potentially remove other negative listings, you may wish to consider financial counselling. This step can help assist you in long term financial planning and management.

Depending on your situation, you may find that credit repair is a priority. The cost of engaging credit repair professionals could be a mere drop in the ocean when it comes to the money you could save on loans if you have better credit history.

Things to consider before calling a credit repair specialist

  • Expenses. Weigh up the costs of credit repair against the possible value of it For example, the long term benefit of a home loan with favourable terms outweighs the short term costs of hiring a credit repair specialist. But the benefit depends on them being successful. Consider your credit history carefully and what may be realistically achieved through a credit repair agency before you spend any money on it.
  • No guarantees. The agency will investigate your listings but cannot offer any certainty of removing them. You can take comfort in knowing that you’ll be paying less if they fail to remove the listings though.
  • Time factor. When studying your negative listings, also take note of when they will “expire”. Most credit black marks disappear from your credit file after five to seven years, so in some cases it may be worth waiting it out. If a payment default was listed on your file more than four years ago, there is a good chance it is due to disappear soon. If you can hold off your loan application for a few more months, you can do away with the whole credit repair hassle.

You can call a credit repair company for a consultation at any time, but remember that credit repair can only remove incorrect or illegitimate listings. There’s no guarantee that credit repair will work for you, and you may ultimately still have to wait for some black marks to naturally expire. But now that you understand how credit history and credit repairs work, you can make an informed decision about these options based on your individual circumstances and goals.

If you want to consider debt consolidation?

Unfortunately, Fox Symes won't be able to help you at this stage. For more information on improving your credit learn more here.

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21 Responses

  1. Default Gravatar
    DarrenOctober 12, 2017

    Hi there I have found out I got a default against me wondering how I clear it up thanks you
    04317713

    • Staff
      MariaOctober 13, 2017Staff

      Hi Darren,

      Thank you for reaching out to us.

      If you haven’t yet, you can request a free credit report and receive it in 10 working days to confirm the defaults that you may have on file.

      If you prefer to DIY, you may report the incorrect listings by initiating an investigation by the agency that has this mistake on file.

      You can possibly negotiate with the credit provider for a more manageable payment plan.

      Credit repair agencies are experts at spotting these errors and may be more effective at repairing your report so you may want to consider hiring them to assist you.

      I hope this helps.

      Best,
      Maria

  2. Default Gravatar
    NicolaJuly 26, 2017

    My husband had an mbna credit card that he was paying each month until he was made redundant to a plan was put together with mbna and himself at half the amount each month, which he paid each month until he got a letter from a debt collector Pra, knew nothing of why this had been handed to them and no warning. Can they do this ? 2015 this happened and we were still unaware that a default was added to his credit file until last month when we applied for a mortgage as he paid the company off in full at the begining of the year and was told from the company your credit file from us will be clear after 12 weeks. Which it isn’t and they have also added a default for the same amount even though it’s paid in full . Our house has been sold and we can’t get a mortgage

    • Staff
      JonathanJuly 26, 2017Staff

      Hello Nicola,

      Thank you for your inquiry today. I know this is a sensitive obstacle that you and your husband are both facing.

      It is imperative for lenders to inform their clients prior endorsing the debt to a third-party collection agency or to a law office. Usually, they need to send you several notices for that. These notices don’t need to be letters, it can be phone calls, or even email, so it is important that you don’t ignore them in your mailbox and voicemail.

      Usually, once the debt has been paid, and there was an agreement for that, the creditors may declare it on the credit file as “settled”, “paid as agreed”, or “paid”. It really varies. If they declared something you believe should not be the case, you may need to go back to them and ask to update their declaration.

      If you need further assistance, you may consult a credit repair agency to resolve this, but take note there is no assurance it can be fixed on your favor and it may entail significant costs.

      Hope this helps.

      Cheers,
      Jonathan

    • Default Gravatar
      July 26, 2017

      Thank Jonathan, sorry but no emails or phone calls received, just one letter from the debt collector saying that they have now got his debt and to set up a direct debit with them

    • Staff
      JonathanAugust 3, 2017Staff

      Hello Carter2005,

      Thank you for making a follow-up.

      It is unusual for any lender to not make any early attempts to collect a debt. If you haven’t received any prior notification, such as phone calls or emails, it is either you opted out or has not given them a valid contact information.

      Nevertheless, the endorsement to legal or third-party collection agency is usually at a late stage and doesn’t absolve the client’s responsibility to proactively contact their lender, instead of letting the debt go further delinquent.

      You may consult this with RBA to know if their process has been compliant with existing regulations.

      Hope this helps.

      Cheers,
      Jonathan

  3. Default Gravatar
    HappyFebruary 7, 2017

    I have already paid my default off but it’s still on my credit report. Is there any way to get rid of it? I want to clear my report cause I want to go for a home loan.

    • Staff
      AnndyFebruary 7, 2017Staff

      Hi Happy,

      Thanks for reaching out.

      Unfortunately, overdue amounts of $150 and above are recorded once they are 60 days overdue and these listings remain on your file for five years. Also, you can’t repair or remove any valid listings on your file.

      While you already have a negative listing, you can still improve your credit score in so many ways. You can check our guide here for more information how to do it.

      Cheers,
      Anndy

  4. Default Gravatar
    ZoeFebruary 1, 2017

    i have a personal loan that i haven’t made repayments on for quite some time, so i am sure i have a black mark on my credit score.
    Once i manage the repayments how long will the black mark remain on my credit score? will the black mark only be removed once the loan is re-payed or can it be removed sooner?

    • Staff
      MayFebruary 1, 2017Staff

      Hi Zoe,

      Thanks for your question.

      Generally, overdue accounts listed as a payment default will stay on your credit file for five years. The black marks, meantime, can only be removed from your file if they are incorrect and that no credit agency can guarantee that they will be able to remove listings from your file.

      I would suggest that you get a copy of your credit report so you can check all the information in it and see if there are any incorrect listings or details and what could be done to improve your score. Basically, you can improve your score by paying off your debts (credit card and loans) and utility bills on time.

      Cheers,
      May

    • Default Gravatar
      February 1, 2017

      Thank you for your reply.

      Does the 5 years start from the date that the loan has been settled or from the date I was first in default?
      I most likely have been in default for 4 years now, however haven’t made any payments since I was in default.

    • Staff
      MayFebruary 1, 2017Staff

      Hi Sam,

      Thanks for getting back.

      The five years will start from the time that your default was listed on the credit file.

      Cheers,
      May

  5. Default Gravatar
    GeorginaOctober 29, 2016

    My credit core is 315 I have one paid default. Will it improve when the default is removed?

    • Staff
      AnndyOctober 30, 2016Staff

      Hi Georgina,

      Thanks for your question.

      Please note that overdue accounts listed as a payment default will appear in your credit file for 5 years. As long as it is there, it may affect your credit score.

      If you want to know the full details of your credit score including the defaults listed on it, you can request a free credit report through this page.

      Cheers,
      Anndy

  6. Default Gravatar
    andrewMay 23, 2016

    My son had to go through a debt conciliation 2 years ago and currently has the opportunity to purchase a home. Will the credit repair process be suitable for his situation? They are now in a position where they have 2 stable incomes.

    Regards,
    Andrew

    • Staff
      MayMay 24, 2016Staff

      Hi Andrew,

      Thanks for your question.

      Your son’s credit file is used by lenders to judge his creditworthiness. So if he has a bad credit record in the past, it is important that he must focus on improving his finances before he will start applying for a new line of credit or loan. He can do this with the help of a credit repair agency. Please feel free to visit this page where you can find invaluable information on how credit repair can be done.

      I hope this is helpful.

      Cheers,
      May

  7. Default Gravatar
    IronMay 12, 2015

    Hi,

    My name is in default list because of late payments of credit card and personal loan. Both payments been paid and accounts been settled already but they have put my name in default list and now I can’t get any home loan. I have already got Veda report which shows all details. How can I get off my name from the default list before 5 years so I can apply for new home loan?

    Many thanks.

    • Staff
      JonathanMay 13, 2015Staff

      Hi Iron, thanks for your inquiry!

      Please refer to the following page for more information on the credit repair process.

      Cheers,

      Jonathan

  8. Default Gravatar
    kbJanuary 3, 2015

    I have a paid judgment debt on my credit file. I believe this to be unfair, yes I had a disagreement with a lawyer over excessive charges, they lodged judgement against me. The debt is paid. How do I have this removed?

    • Staff
      ElizabethJanuary 5, 2015Staff

      Hi KB,

      Thanks for your question.

      Credit repair is one way to have listings removed from your file, but keep in mind that this removal is not guaranteed. Credit repair agencies are only able to remove listings that have been put on your file incorrectly or without correctly complying with credit law. To read more about this process you can visit this page.

      I hope this has helped.

      Thanks,

      Elizabeth

  9. Default Gravatar
    nicholasAugust 9, 2014

    Need help asap

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