in this brief blog, we are going to answer “how many points does a default take off your credit score “.

What is a default?

A default is what happens when you fail to make repayments on credit and the credit provider tries severally to get you to bring your account up to date but finally accepts that you will not be able to and issues you a default notice.  A default will be added to your credit file and will cause your credit score to fall by as much as 250 points depending on the credit bureau.

A default will also last on your credit score for as many as 6 years.

Once you receiving a default notice the credit provider will have 28 days from then in which they can remove the default from your credit file if you bring your account up to date or if you come to an agreement with them.

How many points does a default take off your credit score?

A default will take u to 350 points off your credit score and will likely leave your credit score low for a prolonged period of time. A missed payments il cost you about 80 points off your credit score and a County court judgement will cost you about 250 points off your credit score.

Does your credit score go up when a default is removed?

Yes, your credit score will go up when a default is removed from your credit file but this depends heavily on if you have a default or if you have any defaults on your credit file. More often than not, people will have more than one default on their credit file as they may be going through a hard time and were unable to meet any of their credit obligations.

If you have more than one default on your credit file then your credit score will not go up much if at all, when one of the defaults is removed.

Can a default be removed?

Yes, a default can be removed from your credit file if it was recorded in error but aside from this, a default cannot be removed from your credit file for 6 years after it has been recorded. A default will usually cost you about 250 points off your credit score and will cause your credit options to be limited.

If you feel an error has been made and you should not have a default notice on your credit file then you should check which of the four credit bureaus hold this data and contact all of them to dispute this data.

They will add a notice of correction on your credit file whilst they contact the company who put the data to verify the accuracy of the data. 

The four credit bureaus are Transunion, Crediva, Equic=fax and Experian.Some of these credit bureaus may charge you to view your credit report but you can get it for free by requesting a statutory credit report for free.

You can also view your credit score from services such as Checkmyfile and Clearscore.

Can a paid default be removed?

A paid default can be removed but this will be at the discretion of the credit provider and there is no guarantee that they will agree to have the default removed. If you have paid for a default in full then the credit provider may be able to mark the default as paid or settled on your credit file. u003cbru003eu003cbru003eYou can also contact the credit bureaus and ask them to place a note on the default notice explaining how it came to be. If you were in a financial crisis or something similar then you may find that there are some lenders out there that will take this into consideration.

Can I get a mortgage with a default?

Yes, you can get a mortgage with a default. There are a lot of bad credit mortgage lenders out there who will lend to borrowers who have a default on their credit file. If you want to get a mortgage with a default then you may want to speak with a bad credit mortgage broker who will have experience of dealing with borrowers who have defaults.

Can I get a mortgage with a 4 year old default?

Yes, you may be able to get a mortgage with a 4-year-old default. Mortgage lenders are more willing to lend to people if the default happened a long time ago and the longer the period, the better your chances. If you have a 4-year-old default and want to get a mortgage then you should speak to a bad credit mortgage broker who has experience of getting a mortgage for people with defaults.

How do I fix my credit after default?

After a default you can fix your credit file by following the steps below:u003cbru003eu003cbru003eGet a secured credit card and show good repayment behaviour by never missing a paymentu003cbru003eGet a credit builder credit card and show good credit behaviour by not missing a paymentu003cbru003eGet a credit builder loan which may be able to help you build creditu003cbru003eGet registered on the electoral roll for your current addressu003cbru003eReduce your credit utilization to less than 30%u003cbru003eu003cbru003eu003cbru003eAs a default will cost you up to 250 points dropped you can expect it to be a long road ahead when looking to build credit after a default.u003cbru003eu003cbru003e


Getting a mortgage with a default

You may want to consider using an independent mortgage broker to get a mortgage with a default.

Mortgage brokers are important as they can access mortgage products from across the whole of the market in some cases. This could be over 11,000 mortgage products. This may have some advantages than going directly to a mortgage lender.

A mortgage broker will look to understand your financial circumstances and then provide recommendations on which mortgage products may be suitable for you.

After giving you these mortgage recommendations, most mortgage brokers will seek your consent to apply for a mortgage in principle. This will allow you to shop for your home easier as more estate agents and sellers may take you seriously or it will give you confidence that your remortgage is indeed a possibility before you make a full mortgage application. Once you have found a home you want to buy or are satisfied with the mortgage offer for your remortgage then the mortgage broker will then look to get you a mortgage offer.

This will come with a key facts illustration document which details out the features of your mortgage including how much you will pay per month if there are any limits such as early repayment fees, or annual overpayment limits.

If you are happy with everything you can then go on to secure your  mortgage with the help of a conveyancer. Your conveyancer will manage the legal searches on the property to ensure there aren’t any issues with it, they will oversee the sales agreement to ensure it is in your best interest, they will manage the transfer of mortgage funds, exchange contracts with the seller or their conveyancer and set a completion date with the seller or their conveyancer.

In this blog post, we tackled the question “ How many points does a default take off your credit score “ and we concluded that a default can take off as much as 250 points off your credit score and be very harmful to your ability to get credit in the future.

John Bate

John has 22 years of experience in financial services. This spans across financial research, financial services (As a qualified mortgage broker and underwriter), financial trading and sales at global investment banks. While working as a publishing research analyst, he covered European bank credit and advised institutional clients on investment strategies at both JP Morgan and Societe Generale. John has passed all three levels of the CFA (Chartered Financial Analyst) programme.