Tried working around space, finding fault (7)
I believe the answer is:
demerit
'fault' is the definition.
(I know that fault can be written as demerit)
'tried working around space' is the wordplay.
'working' indicates anagramming the letters.
'around' indicates putting letters inside.
'space' becomes 'em' (in typography, a space as wide as a letter 'm').
'tried' anagrammed gives 'derit'.
'derit' enclosing 'em' is 'DEMERIT'.
'finding' is the link.
(Other definitions for demerit that I've seen before include "Conduct that deserves censure" , "Black mark" , "Mark given for a fault" , "Fact deserving censure" , "Fault, defect" .)