Hi Steve,
Agree totally with what Ross said but just a little bit to add to that.
Even though its only a small amount the reality is that it can be a real pain in the you know what! It won't be too much of a problem with the banks as Ross said, as long as you provide an explanation and a letter signed by your friend confirming the particulars of what happened when you apply.
But even though it will show on your CRAA file that the outstanding default amount has been paid, it will still remain on your record for another 5 years. I think it's worth trying to get the creditor to have the default removed. Most of the time, you won't have much chance, though, depending on who the default was with some creditors are more willing to help as they understand the hassle it can cause with future finance,etc.
I know when I worked at Westpac and Optus, on the odd occasion we did contact CRAA to have listings completely removed(yes, its true, I'm not lieing!
Depending on the cirumstances in which the default was listed in the first place and also the amount?
I thinks it's worth you getting a detailed letter signed by your friend acknowleding he too was at fault and really push to have the default removed. Whenever you apply for finance in the future, even if its signing up to a new mobile plan they will run a check on your CRAA and you will have to go through the whole time wasteing process of explaining the context of the listing,etc and even then, some creditors won't take your explanation as being good enough as they generally become quite sceptical with people who have a bad credit record. ie there are alot of people out there with genuine blemishes on their CRAA who try to make all sorts of excuses for it!
Also, alot of comapny's these days(like the ones who provide credit cards) have systems in which your application is not even looked at and assessed by a credit analysis. Your application is loaded into a system generated application by an external data inputing company. The application then goes through a whole credit scoring matrix which takes into consideration the usual things. But if it picks up a default,etc on your CRAA then your credit card apllication is automatically declined as your score is too low and your sent the generic "Your aplication has been declined to to information obtained by the Credit Reference Association of Australia (now Baycorp) blah blah.
Obviously you can get past it, but usually involves faxing more info to them, letter explaining circumstances of default, extra financials,etc absolute nuisance and waste of time for you. Not to mention the time you waste having to speak to some unqualified customer service rep trying to tell you why your application was declined without them saying anything because of the protection of the banks lending criteria. Then you 'll ask them, didn't you get my letter attached to the application explaining what happened and they will reply " On the application form(in minute writing mind you) it says to not attach any documentation to the application form. We will request any necessary documents if it is required"
Anyhow, Steve, I guess you get the drift of what I'm saying.
Good luck,
Darren
