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Default
Definition
Default is the failure to repay a loan or meet the terms of a credit agreement, typically occurring after several missed payments.
Explanation
Default is a serious credit event that occurs when a borrower misses multiple payments (typically 90-180 days depending on the loan type). Defaulting leads to collection actions, repossession of collateral, significant credit score damage, wage garnishment, and legal action.
Default stays on your credit report for 7 years. Before defaulting, contact your lender to discuss hardship programs, forbearance, or payment modifications.
Example
Missing six consecutive mortgage payments triggers default, allowing the lender to begin foreclosure proceedings and severely damaging your credit score.