Can You Really ‘Clear’ a Default?

If you’ve ever checked your credit report and been shocked to see a default listed, you’re not alone. Whether it’s from a missed phone bill, a forgotten loan payment, or a dispute that got out of hand, defaults can feel like a heavy stain on your financial reputation. But what does it actually mean to “clear” a default—and is it even possible? 

Let’s break it down. 

What Is a Default? 

A default is a formal record that a payment of $150 or more is more than 60 days overdue, and the creditor has tried (and failed) to recover the debt. It’s a red flag to lenders, signaling that you’ve had difficulty meeting repayment obligations in the past. 

Defaults can appear on your credit report for up to five years, even if you eventually pay them off. 

Can a Default Be Removed? 

Yes—but only under certain conditions.

At Credit Repair Australia, we’ve helped thousands of Australians legally remove defaults from their credit reports—but only when there’s a valid reason for removal. Here’s how it works: 

Incorrect or Unfair Listings 

If a default was added: 

• In error 
• Without proper notification 
• For a disputed amount 
• Outside of the legal time frame 

…then there may be grounds to challenge it. We investigate the listing to ensure it complies with credit reporting laws and privacy obligations.

Failure to Notify You Properly 

By law, a creditor must send you: 

1. A notice that the account is overdue. 
2. A default notice with 30 days to pay. 
3. A warning it may be listed on your credit report. 

If they miss a step, the listing may be deemed unlawful—and we can push for its removal. 

What Happens If the Default Is Paid? 

Paying a defaulted debt is always a good step—it stops further collection activity and can improve how lenders view your application. However, it doesn’t automatically remove the default from your credit file. It simply gets marked as “paid,” but the original listing and the date it was added still remain for the full 5-year term.

This is why many people are disappointed to discover that paying the debt doesn’t “clean the slate” like they thought it would.

Myth-Busting: Credit Repair Isn’t Magic

We’ll be honest—no one can just “wipe” a legitimate default from your file without reason. Be cautious of companies promising quick-fix solutions or guaranteed outcomes. Credit repair is a legal, evidence-based process that requires in-depth investigation, experience, and clear documentation.

At Credit Repair Australia, we: 

• Request all documentation from the creditor. 
• Cross-check it against credit laws. 
• Negotiate directly with creditors where appropriate. 
• Provide guidance if you’ve already paid or settled the debt. 

What If the Default Is Valid? 

Even if a default is valid and stays on your report, there are still options: 

• We can help you rebuild your credit profile around it.
• You can demonstrate good repayment history moving forward.
• You may still qualify for credit through lenders who assess your broader situation, not just your credit score. 

So, Can You Really ‘Clear’ a Default? 

Yes—if it shouldn’t be there.

If the default is unfair, incorrect, or unlawfully listed, we may be able to remove it. If it’s valid, we can still help you minimise its impact and put a plan in place to move forward confidently. 

Next Steps: Get a Free Credit Assessment

If you’re unsure whether your default is valid—or want a professional to look into it for you—reach out for a free, no-obligation credit report assessment.

We’ll explain: 

• Whether your default qualifies for removal 
• How we’d go about investigating it 
• What support options are available 

Gavin Symes MBA, Dip FS (FP)

Gavin holds an MBA and a Diploma in Financial Services (Financial Planning). He has been a driving force behind the growth of Credit Repair Australia since its inception in 2003.