Delinquency and default
Also known as: Delinquency · Default · Past due · Charge-off · NPL
Delinquency is a missed payment past its due date; default is the point where the lender treats the debt as not going to be repaid under its terms — in US banking, typically at charge-off.
At Zarv
Collateral recovered 6x faster with behavior-driven collections.
Delinquency is measured in buckets — 30, 60, 90 days past due — and what the portfolio watches is how much of it rolls into loss. Federal bank regulators' retail classification policy sets the end of the road: closed-end loans are generally charged off at 120 days past due and open-end credit such as cards at 180 days. On the credit report, a collection or charge-off can be reported for seven years from 180 days after the delinquency began.
Delinquency originates at two different moments. Part of it was already contracted at origination — the risk underwriting did not see. Another part appears during the contract, when the borrower's situation changes. Treating the two as the same problem is what makes collections always arrive late.
Behavioral signals anticipate the second kind: changes in routine, in how the asset is used and in stability show up before the first missed payment. When there is collateral, the same signal locates it — and operations that use Zarv recover collateral 6 times faster.
Frequently asked questions
What is the difference between delinquency and default?
Delinquency starts the day after a missed due date. Default is a later stage defined by the contract or by the lender's policy, commonly when the account is charged off or sent to collections. A delinquent account can be cured by catching up; a defaulted one usually cannot without a settlement.
When does a loan get charged off?
Under the federal banking agencies' retail credit policy, closed-end installment loans are generally charged off at 120 days past due and open-end accounts like credit cards at 180 days. A charge-off is an accounting step; the debt is still owed.