What is the difference between a default and a missed payment?

Missed payments: what gets recorded

Lenders report your account to the credit reference agencies every month. If you miss a payment or pay less than you agreed, they may report the account as in arrears. Arrears usually go up one month at a time, for example from one month behind to two, and are shown as a status number that can rise to a maximum of 6.

If you catch up, the change is recorded in the next monthly update. Each missed payment stays in the account’s payment history. Equifax, for example, holds up to four years of monthly history on each account, and keeps it for up to six more years after the account is closed or settled.

Defaults: when the agreement has broken down

A default is recorded when the lender decides the relationship has broken down. As a general guide, this may happen when you are 3 months in arrears, and normally by the time you are 6 months in arrears. Mortgages and other secured or long-term loans, and more flexible products such as current accounts, can be different.

Before registering a default, the lender must tell you it intends to do so at least 28 days beforehand. That gives you time to make a payment or agree an arrangement. The default date is normally when that notice period ends.

A default shows the balance you owe and stays on your credit file for 6 years from the default date. If you pay it off, it is updated to show the account as satisfied, but the default still stays for the full 6 years. If the lender accepts less than the full balance, the account is marked as partially settled.

How to stop missed payments becoming a default

• Contact the lender as soon as you know you will struggle. FCA rules say lenders must treat customers who are in arrears, or close to it, with forbearance and due consideration.
• Ask about an arrangement. If you agree one with the lender and keep to it, a default would not normally be registered. An agreed arrangement is still shown on your credit file.
• If you get a default notice, read it carefully. A default should not be registered if you make a payment in time that fully meets the terms the notice sets out.
• If you are behind on more than one debt, get free debt advice early. An adviser can look at your whole situation and explain your options.

Check what your credit file says

To see exactly how missed payments or a default have been recorded, check your credit report. You can also get a free statutory credit report from each of Experian, Equifax and TransUnion. Our guide to checking your credit report explains how.

If an entry is wrong, ask the lender or the credit reference agency to correct it. If an entry is accurate but needs explaining, you can add a notice of correction of up to 200 words, written by you, which must be sent out with that information in future.

Sources

Every fact in this page was checked against these official sources on 5 November 2026.

1. Principles for the Reporting of Arrears, Arrangements and Defaults at Credit Reference Agencies Experian (credit industry principles agreed with the ICO)
2. Equifax data retention periods Equifax
3. Consumer Credit Act 1974, section 159: correction of wrong information legislation.gov.uk
4. CONC 7.3: Treatment of customers in default or arrears difficulties Financial Conduct Authority

Written and fact-checked by the PiggyBank editorial team. Last reviewed 5 November 2026. This answer is general information, not financial advice. How we write and check our guides.