Guide on How to Clear a Default from Your Credit History

how to clear a default from your credit history

Like most people, you probably don’t know how to remove a default from your credit history. A default can stay on your credit report for several years, severely affect your credit rating, and make it harder for you to get approved for new credit products. 

This article will explain how to clear a default from your credit history and how they are listed on your credit rating.

What is a default on credit history?

A default is listed on your credit history when you have failed to make a payment on a credit that you have agreed to. This can include loans, credit cards, and store cards. A default will stay on your credit report and affect your ability to get approved for new credit products.

How to Clear a Default from Your Credit History

You can only delete a negative item on your credit report if the information is incorrect and it has exceeded the expiration date. So, the only way to remove a credit default and deal with black marks on your credit report is to give them time and wait for them to go away; most bad items stay there for seven years.

How to improve your credit rating while having defaults?

If you have a default on your credit history, getting approved for new credit products might be difficult. Still, there are a few ways of improving your credit rating:

  • Order a copy of your credit report – request a copy of your credit report from one or more credit reporting agencies and try to find any black marks or defaults.

Note: You should be aware that the information on your credit report may differ from one agency to the next

  • Identify the defaults and black marks – these represent any items potential lenders may find concerning, and they can negatively impact your credit score; therefore, make sure you know what you’re dealing with.
  • Remove the black marks and defaults many credit repair firms specialize in detecting and correcting these errors, so consider hiring such professionals to help you remove a default from your credit report.

Who can erase defaults from your credit rating?

Credit reporting agencies will not remove a default from your credit report. Only the lender or creditor who listed the default on your credit history can remove it. However, if you have made arrangements to repay the debt, the credit reporting agency may remove it from your file.

However, there are some things to consider before calling a credit repair service.

  • No guarantees – the agency will investigate your listings, but they cannot by law promise to take them down.
  • Time factor – check when your black mars will “expire”; most of them go away after seven years, so if you’re close to this deadline, you might want to wait it out a bit to avoid additional costs.
  • Expenses – hiring a credit repair agency may be a great short-term solution, but it can also be expensive; if you get a loan with excellent terms after waiting for black marks to disappear from your credit history, this may be more beneficial and have more advantages long-term.

Will removing a default improve my credit score?

When a default appears on your credit file, you will see a significant drop in your credit score, as recent negative information has a more substantial impact on your score. A default will remain on your credit reports and be factored into your credit score for seven years from the moment you stopped making payments. 

After a while, however, the influence of a default on your credit score will decrease. It will naturally fade from your credit file after some time, at which point your credit score may somewhat improve. In the meantime, practising healthy credit habits can help you repair your credit score.

Bottom Line

Knowing how to clear a default from your credit history will help you fix any mistakes that could lower your credit score. You can then decide how to improve your credit score based on what is best for you.

Remember, your credit score is calculated by analyzing your credit history, your credit profile, and the components of your application.

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