How Long Does Bad Credit Stay On Your Record?

How long does bad credit stay on your report? Read on to find out.

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 put your credit back 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?

According to the Financial Consumer Agency of Canada, by law, negative information can only stay on your credit report for a certain length of time. Depending on what province you live in, the maximum amount of time for most negative information is six to seven years. The good news is that positive records can be kept for longer than that.

The two credit bureaus in Canada are Equifax Canada and TransUnion Canada; each keeps your information for a different length of time, depending on the type of debt owed and where you live. Ensure you verify the numbers for your home province.

Negative Credit Transactions

This information is reported based on credit card accounts – lines of credit and loans stay on your credit report for up to six years. Equifax counts from the date of your last activity (a payment you’ve made). TransUnion, on the other hand, counts from date of first delinquency (the first missed payment that began the non-payment trend).

Secured Loans

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 account for six years. Equifax counts from the date of filing, whereas TransUnion counts from date of first delinquency.

Bank Accounts

Sometimes chequing or savings accounts are closed when money is owed or the account holder commits fraud (like writing bad cheques, for example). Negative information on bank accounts can stay on record for up to six years. Again, 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

If you’ve had a legal judgment made against you, this information stays on record for up to six years. Please read the fine print regarding provincial variations. Equifax and TransUnion both have different numbers for the different provinces – some lasting as long as 10 years!

Debt Collection

Debt sent to collections can last up to six years, depending on where you live. Equifax counts from the date the debt is first assigned to a collection agency, but TransUnion counts from date of first delinquency (when the account 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.

Bankruptcy

Information pertaining to a bankruptcy, the legal procedure that’s used if you are unable to repay your debts after a lengthy period of time, can remain on file for up to seven years, depending on where you live. TransUnion keeps information for seven years in Ontario, Quebec, New Brunswick, Newfoundland and Labrador, and P.E.I. The start date is counted from the date of discharge. If not discharged, Equifax keeps this information for a maximum of seven years from filing date. There is no time limit for a TransUnion bankruptcy record. In the case of multiple bankruptcies, information, which is counted from the date of discharge for each bankruptcy, can be kept for as long as 14 years.

Sometimes It Can Hurt to Ask

Did you know that every time a creditor makes an inquiry into your account the “transaction” remains on your credit report? Equifax keeps this information for three years, whereas TransUnion keeps it on record for six years.

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One thought on “How Long Does Bad Credit Stay On Your Record?

  1. I had a foreclosure in-lieu-of in 2011 as my husband left me with everything and after 2 and a half years, I could no longer pay the bills and mortgage myself. A decision was made against me in 2012. I only found this information out a few weeks ago (2016) saying I owe over 43K. I have not received any other mail except this and I am now on long term disability. I have no way of paying this back and when I returned the home to the bank in 2011 the financial adviser said to me that foreclosure would be the way to go. I said then that I did not want anyone to come back to me at a later date requesting money. I have been living very poorly since and was looking forward to my credit being clear in another few years time. Now what?

    Many thanks,
    Michelle

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