Credit bureau keeps a record of your credit relating behaviors. It is like a historical snapshot of your commitment to repay your debt in a timely manner. There is a complete history of your loan amount, credit cards and repayment. However, banks and lenders access this information to assess the degree of risk associated with offering you a loan.

Therefore, any past late payments and defaults negatively impact your chances to obtain finance in the near future. Bad credit history signifies your inability to handle your finances.

So, therefore, it is important to pay your bills on time and ensure your spending is under control.

How did you get a default on your credit file?

Overdue account is reported as a payment default in your report. It arises as soon as you have an outstanding account of least $100 overdue for more than 60 days. Late payments of credit card debts, mobile phone or delay in loan repayment are common examples of it. The payment default is recorded on your file after 60 days.

However, if you fail to respond to the request of the lender for settling the outstanding amount, you will be considered as an unaccountable debtor, where in your payment default is classified as a clear out.

You will be listed default on your file even if 60 days duration has not been elapsed. In some of the cases, the lender may start a legal proceeding against you. Such events also get recorded on the file.

However, if you pay your overdue account, the bank will update the file as soon as the payment is made. But the payment default remains on the report for a specific time. The rules are strict and there is no way the default can be removed from the report before the particular time has elapsed.

How long does the default will stay on your report?

The length of time depends on the default. However, a payment default remains for 5 years, even the overdue amount is paid in full.

If you fail to respond to the creditor and gets clear out, the information will remain for 7 years on the file.  The court judgment remains on it for 5years while a bankruptcy list for 7 years, even after it has been discharged.

700 FICO Club offer credit restoration services. Seek our help to manage your finances well. We can also help you enhance your credit score. Call us for additional details or email us your queries.