Definition
A default happens when a lender formally declares that you have breached the terms of your loan agreement. This typically occurs after you have missed several payments, leading to a buildup of arrears.
Default Consequences: How It Affects Your Future Access to Credit
A default can remain on your credit report for up to six years, affecting your ability to get approved for loans, credit cards, and other financial products.
It is crucial to make timely payments and stay within your means to avoid defaulting on credit agreements.
If you find it difficult to make payments, it is important to contact your lender and discuss the situation.
Budgeting for Success: Preventing Default Through Financial Planning
Building and following a realistic budget, prioritising essential expenses, and seeking additional sources of income may help prevent defaulting on credit agreements in the future.
Seeking Support: Debt Consolidation and Credit Counseling for Debt Management
Exploring debt consolidation options or seeking advice from a reputable credit counselling agency can also be helpful in managing your debt