Why a Payment Default Was Registered
A payment default is registered against your business when you fail to pay an outstanding debt owed to another entity (the listing entity).
A listing entity can register a payment default when:
The debt is overdue and greater than $100
They have made reasonable attempts to recover the payment
Registering a payment default is one of the final steps taken to recover unpaid debts. Before a payment default is registered, the listing entity must also provide supporting documentation.
Once registered, a payment default will remain visible on the debtor’s credit report for five years, even if it is later marked as settled.
What You Can Do
If the debt has been paid, the listing entity can update the payment default to show that it has been settled.
It's important to understand that payment defaults are generally not removed simply because they have been paid. Instead, the status can be updated to indicate the debt has been settled.
Similarly, entering into a payment arrangement or payment plan does not invalidate an existing payment default. Unless the default was registered incorrectly, it may continue to be displayed on the credit report while the payment arrangement is in place.
If you believe the payment default was registered in error, review our guide on Payment Default Dispute Process for step-by-step instructions on submitting a dispute.
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