When it comes to credit reports, one of the most frequently asked questions asked by clients is: “How long does information stay on my credit report? The answer is that it depends on the Credit Bureau, the type of information and whether it’s considered “positive” or “negative.” Generally speaking, negative information such as late or missed payments, accounts that have been sent to collection agencies, or a bankruptcy stays on credit reports for approximately six or seven years.
Firstly, there are two national credit bureaus in Canada, Equifax and Transunion. Credit bureaus have different sources for collecting information. While many creditors do report to both major credit bureaus, some creditors may report to only one or none at all. This means that each of your credit reports may also contain different information.
Most types of negative information generally remain on your credit report for 6 years after the date you defaulted. Accounts that were paid as agreed and do not contain adverse information remain on your Equifax credit report for up to 10 years and 20 years for Transunion from the last date of activity.
Hard (Credit Related) inquiries may impact your credit score and may remain on your Equifax credit report for 3 years, 6 years for Transunion
Late payments remain on a credit report for up to 6 years from the date reported. This is also known as “previous high rate” based on the system used in Canada to rate payments. The late payment remains on your Equifax credit report even if you pay the past-due balance. For instance, if you had a late payment in April 2011, the late payment would come off your Equifax credit report in April 2017, 6 years after the date of the missed payment.
Collections or charged-off accounts: If you have a late payment and don’t pay the past-due balance, the account could eventually be charged off by the original lender and assigned to a collection agency. If that happens, the entire collection account would be removed 6 years from the date of your last payment for Equifax, 6 years from the date of default for Transunion. If you pay the collection account before the 6-year period is up, it still remains on your credit report for 6 years of the posting date.
In a Debt Repayment Program (Orderly Payment of Debt or Credit Counceling Program) all debts reported as included in the debt repayment program will be removed from your file two years from the date the program was satisfied. The consumer proposal and all accounts reported as satisfied through the proposal will be removed from your file three years from the date you satisfied the proposal or six years for both after the date you defaulted on the account, whichever date comes first.
In Ontario, bankruptcy remains on your Equifax credit report for 6 years after the discharge date, or 7 years after the date filed without a discharge date. 7 years from the discharge date for Transunion. If a second bankruptcy is filed, then both bankruptcies will show and remain for 14 years after the discharge dates.
Judgments are debts you owe due to a court action. In Ontario, this information stays on your Equifax credit report for 6 years and 7 years on Transunion from the date of Judgement.
Secured loans remain on your credit report for 6 years from the date filed.
Banking items, such as cheques returned for insufficient funds, remain on your credit report for 6 years from the date reported.
Regularly checking your credit report is an important step to ensure your information is accurate and complete, and confirm that any negative information falls off after the appropriate time period. Credit report errors are more common than you might think, but thankfully there are steps you can take to address mistakes.
While some issues are harmless, others can negatively affect your credit score. Serious errors include things like identity fraud, delinquent accounts paid off but still reporting or credit card debts from someone with a similar name showing up on your account.
If you do find an error on your credit report, you can file a dispute with the bureau.