A default is listed on your credit file when a debt goes seriously overdue, in NZ generally once a payment is at least 30 days late and the credit provider has followed the notice requirements, and it stays visible for years from the listing date, five being the familiar figure.
What matters to a lender reading one is the story around it: how big, how long ago, whether it was eventually paid, and what the file looks like since. A paid default from a rough patch three years ago, followed by clean history, is survivable with much of the lending panel. A fresh unpaid default is the single heaviest anchor a file can carry.
If you have one: pay it or arrange it if you can, because “paid” changes how it reads even though the listing remains, and dispute it with the bureau if it is wrong, because incorrect defaults are more common than they should be and corrections are free.
A default narrows the field and raises the price, but it is rarely the end of the conversation; our bad credit car finance page covers how panel lenders actually price around one, in dollars rather than euphemisms.