Default
Failure to repay a debt according to the terms of the loan agreement. Default triggers consequences depending on the loan type — collections activity, repossession, foreclosure, or wage garnishment. Defaulting on any loan severely damages your credit score.
Related guides
- Full credit & FICO® glossary
Browse all defined terms by category.
- Charge-Off
When a creditor writes off a debt as a loss after it becomes severely delinquent (typically after 180 days of non-payment). A charge-off doesn't erase the debt — you still legally owe it — but it signals to the credit bureaus and future lenders that you defaulted. Charge-offs remain on your credit report for seven years.
- Collections
When a creditor turns an overdue debt over to a collection agency after the borrower fails to pay. Collection accounts are reported to credit bureaus and remain for seven years from the original delinquency date. Paying a collection removes your legal obligation but typically doesn't remove the account from your report.
Frequently Asked Questions About Default
What does Default mean?
Failure to repay a debt according to the terms of the loan agreement. Default triggers consequences depending on the loan type — collections activity, repossession, foreclosure, or wage garnishment. Defaulting on any loan severely damages your credit score.
Is Default important for my FICO® score?
Understanding Default helps you manage your credit profile more effectively, which in turn supports a stronger FICO® score.