Glossary - Defaults

Defaults are late payments on finance.
Default describes late or missed payments on financial products. If the consumer is behind or in arrears with repayments they may end up with a County Court Judgment.

Example: UK Mortgage Loan
If the consumer has not made a payment and is more than 30 days over the payment date this is regarded a default. Defaults are recorded on a consumers credit record, should persisitant non payments occur then the consumers lenders can take them to a county court in order to recoup the debt they are owed. A judgement may be passed, this is called a County Court Judgement (CCJ) and again this will be recorded on the consumers credit record. Defaults on credit payments adversely affect a persons credit rating and they will find it hard, sometimes impossible to get any future finance.

Useful Tip
If having difficulty with UK mortgage payments always contact the lender and explain immediately this could reduce arrears charges and defaults. Your lender may be able to help by negotiating your repayments with you, they may be able to increase the term of the loan, this would reduce the monthly payments. A lender can help to tailor finance to your ability to pay. Remember by making finance repayments ontime you will improve your credit rating in the future, so speak to your lender if you get into difficulties they could help and they may prevent you sinking into debt.

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