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If I pay defaults on my credit file will the negative marks then be removed from my credit record?

Many individuals with accounts in default may eventually pay that account, but the question is whether or not the negative marks will be removed from the credit record once the account is paid in full.

The way the system operates is that enquiries and credit applications, as well as overdue accounts will remain on the credit file for five years. Accounts that are in payment default will stay on your credit file for a period of five years. Furthermore, accounts that are overdue and listed as a "clearout" are held for a total of seven years. If you are not aware of what a clearout is, it is when the debtor, you, are confirmed missing by the credit provider. So if they have made reasonable efforts to contact you but you have been unreachable, that is when it is called a clearout. However, you are in a situation in which you have paid your defaults, so a clearout is not something that you have to be concerned about.

When you pay your defaults, the credit provider is obligated by law to make changes to your credit file that shows you have brought the account current or paid it in full. However, your payment history remains on your credit file for a period of five years. This means that, although you have brought the account current, credit providers will be able to see the defaulted payments.

If you are trying to acquire new credit, the idea is to work with the credit you have. If you have credit cards, charge items on them every month and make sure you pay them off on your due date. This, over time, will place you within a position in which your credit rating will improve. Before long, credit providers will be able to see that you have made a conscious effort to improve your credit and will be more likely to extend new credit to you. In other words, it is very possible that the good can outweigh the bad if you make sure you pay your payments on time. If you have difficulty paying your payments on time, designate a friend or family member to ensure that you make your payments each month. With a little help, you can go a long way.

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