Process
Default
A default is a notice on your credit file recording that you fell substantially behind on a credit agreement, after which the lender closed the account. Defaults remain on credit files for six years.
Defaults are typically registered when you're 3–6 months behind on a credit commitment and the lender has decided the account is unrecoverable. The default amount, the date, and whether it's been satisfied are all visible on your credit report.
Like CCJs, defaults are taken seriously by mainstream lenders but accommodated by specialist secured loan lenders. Rate impact depends on the size of the default, how recently it was registered, and whether it's been satisfied.
Settling an outstanding default doesn't remove it from your credit file, but it does change its status from 'unsatisfied' to 'satisfied' — which significantly improves how lenders view it. Any default less than 12 months old will still narrow your lender choice meaningfully even after being settled.