Let’s say you’ve made some credit card mistakes in the past – but fortunately for you, they were fixable. You’ve since done everything required to get your credit back on track and into good standing: you resolved your outstanding debts, and contacted each individual creditor to clear your name. Now it’s just a waiting game; how long does bad credit stay on your record? where you live, the type of negative information reported, and the credit bureau that created the report. The two credit bureaus in Canada are Equifax Canada and TransUnion Canada.
Information that affects your credit record
This information is reported based on credit card accounts, lines of credit, etc.
Equifax usually keeps negative information on record for six years from the date of last payment (for example, a payment you made).
TransUnion, on the other hand, removes accounts with adverse credit history from your record six years from the date of first delinquency (for example, a late payment or a debt sent to a collection agency).
These are loans that are backed by an asset, such as a mortgage, car lease or personal loan. Negative information on secured loan accounts stays on your record for six years, except in P.E.I., where Equifax keeps the information for seven to 10 years. Equifax counts from the date of filing, whereas TransUnion counts from date of first delinquency.
Sometimes chequing or savings accounts are closed when money is owed or the account holder is pegged for committing fraud (like, for example, writing bad cheques). Negative information on bank accounts can stay on record for up to six years. Equifax counts from date of transaction or default, whereas TransUnion counts from date of write-off or date closed – whichever is most recent.
Legal judgements are debts you owe due to of a lawsuit ruling in court (if someone sues you and you lose the case).
If you’ve had a legal judgment made against you, usually this information stays on record for six years from the date of filing. But this also varies based on province. TransUnion keeps this information on file for seven years in New Brunswick, Newfoundland and Labrador, Ontario and Quebec. For those in Prince Edward Island, TransUnion keeps this information for 10 years and Equifax keeps it for seven to 10 years. To learn more on provincial variations, read the fine print on your credit report.
Debt sent to collections generally stays on your record for six years. The difference is that Equifax counts from the date the debt is first assigned to a collection agency, and TransUnion counts from date of first delinquency (when the account first became delinquent with the original lender). This can be a difference of months – even years – in some cases.
When it comes to registered items, such as a lien against your home, negative information can remain on file for up to 10 years, depending on where you live.
Equifax, for instance, holds that information for six years, except in P.E.I. where they keep it for seven to 10 years.
TransUnion holds it for five years, counted from the date of filing.
A consumer proposal is a legal agreement between you and a creditor that you owe, that states you now only have to pay back a portion of your debt, and the creditor will forgive the rest of your balance.
Equifax will remove a consumer proposal from your record three years after you’ve paid off the agreed amount.
TransUnion will remove the proposal either three years after you’ve paid off the agreed amount, or six years after you sign the proposal (whichever comes sooner).
If the proposal is not paid or satisfied, the maximum time a bureau can keep it on your record is six years.
Bankruptcy is a legal status that declares you have been unable to repay your debts after a lengthy period of time.
Typically, a bankruptcy remains on file for six years from the date you are discharged (meaning, the date you are no longer legally required to pay back the debt).
TransUnion keeps bankruptcies on record for seven years after you are discharged in New Brunswick, Newfoundland and Labrador, Ontario, P.E.I. and Quebec.
If not discharged, Equifax can keep a bankruptcy on your record for a maximum of seven years from the filing date, while TransUnion has no limit on how long it can keep that information.
In the case of multiple bankruptcies, information will be kept for 14 years, with each bankruptcy being counted from the date of discharge.
Did you know that every time a creditor makes an inquiry into your account, the “transaction” remains on your credit report? Equifax keeps negative inquiries (for example, from a collection agency) for three years, whereas TransUnion keeps it on record for six years – both from the date the inquiry was made. TransUnion, though, keeps “soft” inquiries on file for two years in Quebec, and one year everywhere else. That being said, it’s best to be strategic when applying for new credit. Applying for even a few cards at the same time can cause your score to take a hit.
Your credit score is not something that should be taken lightly, as it can affect your ability to apply for apply for rent or a mortgage, get a job, buy insurance, or even get a cell phone plan.
So if bad credit is plaguing you, the best way to improve your credit score is to prove to the bureaus that you’re now positively using your credit.
Take affirmative steps to keeping your credit score on track, like making your payments on time, and spending only 20 to 30 per cent of your available credit
Both bureaus usually keep positive information for up to 10 years from the last date a transaction was made on the account.
This post has been updated.