 TITLE: What Happens If I Default on a Loan? CONTENT: How Does a Defaulted Loan Affect Credit?\n----------------------------------------\nDefaulting on a loan can not only have serious immediate financial repercussions but also some long-term consequences.\nWhen you're delinquent on a loan or credit card for at least 30 days, that late payment will be reported to the credit bureaus and will remain on your credit report for seven years. Once you default, that can also be reported to the credit reporting agencies as a collection account, which can further damage your credit score. Collection accounts also typically remain on your credit report for seven years.\nWith a default on your credit report, it can be challenging to get approved for credit in the future. That's because a lender's primary concern is repayment, and if your credit report indicates that you've failed to do that in the past, the lender may consider you to be too much of a risk.\nBut that doesn't necessarily mean that you won't ever qualify for another loan. Some lenders specialize in working with borrowers with negative credit issues, and they may offer a loan or credit card at a higher interest rate.\nAlso, it's important to keep in mind that credit scoring models typically favor new information over old information. So if you can manage to establish a positive payment history going forward, the effects of your default can diminish over time. END