If you have a default, judgment, or bankruptcy on your credit file, the question isn't just "how long does it stay?" — it's "can I still get a home loan while it's there?" The answer is often yes, with the right lender.
5 yrs
Defaults (paid & unpaid)
5 yrs
Court judgments
5 yrs
Part IX debt agreements
5–7 yrs
Bankruptcy
How Long Each Type of Listing Stays on Your Credit File
| Listing Type | Duration on File | Notes |
|---|---|---|
| Credit enquiry (application) | 5 years | Each application lodged |
| Repayment history | 2 years | On-time or late, per account |
| Default (unpaid) | 5 years | From date of listing |
| Default (paid) | 5 years | Stays listed but shows as paid |
| Court judgment | 5 years | From date of judgment |
| Clearout listing | 7 years | Address unknown to creditor |
| Part IX Debt Agreement | 5 years or 2 yrs after completion | Whichever is longer |
| Bankruptcy | 5 years from declaration or 2 yrs after discharge | Whichever is longer; also on NPII permanently |
Does Paying a Default Remove It?
No — paying a default does not remove it from your credit file. It remains for the full 5 years from the date it was listed. However, paying it does change its status from unpaid to paid, which is meaningful:
- Specialist lenders view a paid default significantly more favourably than an unpaid one
- It demonstrates you've taken responsibility and resolved the debt
- Some specialist lenders will approve a home loan even with a paid default, depending on its age and amount
- Unpaid defaults of any amount are a near-certain decline at major banks — and a challenge even at specialist lenders
The practical advice: if you have an outstanding default, pay it immediately — even if you can't get a home loan right now, the clock on the "paid" status starts as soon as you pay.
When is a default listed?
A default can be listed when a payment is overdue by 60+ days and the amount is $150 or more. The creditor must send a written notice (a "default notice") giving you 30 days to pay before listing. The 5-year clock starts from the date the default is listed — not the date the debt was first overdue.
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Can You Get a Home Loan While a Default Is Still on File?
Yes — but not from every lender. Major banks (CBA, ANZ, Westpac, NAB) and most standard lenders decline applications with any defaults on file, regardless of age. This is where specialist lenders come in.
Specialist lenders like Pepper Money, Liberty Financial, Resimac, and Bluestone specifically serve borrowers with imperfect credit. Their approval criteria vary, but as a general guide:
- Small paid default (under $1,000), 2+ years old: Many specialist lenders will consider this
- Larger paid default, 3+ years old: Possible with specialist lender, especially with strong income and 20%+ deposit
- Recent paid default (under 12 months): Difficult — wait 12 months minimum before applying
- Unpaid default: Very difficult to any lender until paid. Pay it immediately.
- Multiple defaults: Harder but not impossible — a broker can find the right fit
What About Defaults Listed in Error?
Errors on credit files do happen — sometimes a default is listed incorrectly (wrong amount, wrong date, or for a debt that was already paid). If you identify an error:
- Contact the credit reporting agency (Equifax, Experian, or illion) with supporting evidence
- They have 30 days to investigate and correct or remove the listing if it's wrong
- You can also contact the original creditor directly
- If the agency doesn't resolve it, escalate to the Australian Financial Complaints Authority (AFCA) or the Office of the Australian Information Commissioner (OAIC)
Do not pay a credit repair company to dispute accurate listings — they cannot legally remove legitimate information. The only valid dispute is for genuine errors.
Practical Strategy: Mapping Your Timeline
If you have defaults, the most useful thing is to map out when each one expires. For example:
- Default listed April 2022 → expires April 2027
- Default listed January 2021 (paid June 2021) → expires January 2026
Once you know when each listing expires, you can plan around it — either apply now with a specialist lender, or wait for specific listings to expire before approaching a major bank at standard rates.
A broker maps this for you for free. At Mortgagefy, we've helped borrowers with active defaults on their credit file find a path to homeownership. The situation is rarely as hopeless as it feels. Call us on 0432 634 648 or read our guides: Bad Credit Home Loans Australia | How to Fix Your Credit Score Before a Mortgage.
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