Having negative items on your credit reports may make it more difficult to get approved for loans and lines of credit. These items might include missed payments, repossession, accounts that have gone to collections or bankruptcy. However, these negative items will eventually fall off your reports. It may take several years for them to disappear, but they won't be there forever.
With this being said, even if you know that you're going to be stuck with a certain item for a while, you can still work to improve your credit while you wait. Of course, if you are in the process of repairing your credit, it will be good to know when you'll no longer be haunted by your past.
Certain Items Fall off Your Credit Reports Faster than Others
In Canada, there are two primary reporting bureaus, Equifax and TransUnion. So, when you want to check your credit, you should request a report from both agencies. This is because certain creditors only report information to one bureau. Some of this information may be shared with the other agency, but everything may not transfer.
All of these items will stay on both credit reports for six years:
- Late Payments (Over 30 Days) on Loans and Credit Cards
- Having Non-Sufficient Funds to Cover a Cheque
- Chequing or Savings Accounts Closed Due to Fraud
- Accounts in Collection
These negative items linger for varying amounts of time:
- Legal judgments will usually stay on your credit reports for six years. But TransUnion reports this information for seven years in Ontario, Quebec, New Brunswick, Newfoundland and Labrador. On Prince Edward Island, it stays for 10 years.
- Equifax documents liens for six years, but TransUnion only keeps them for five.
- Bankruptcy (BK) is usually reported for six years. However, TransUnion keeps BK information for seven years in Ontario, Quebec, New Brunswick, Newfoundland, Labrador and Prince Edward Island.
- Multiple bankruptcies stay on both reports for fourteen years.
- It takes three years for Consumer Proposals to fall off both reports.
Debt management programs (DMP) are a bit complicated. Equifax reports DMP activity for three years after all debts are paid. If any debt goes unpaid, this will show on your credit report for six years following the date that you filed.
TransUnion does not report the DMP itself, only the associated accounts. These accounts will remain on your report for two years after they've been paid. Or, if unpaid, they will stay for six years after the account(s) first became delinquent.
Poor Credit Auto Loans Made Faster and Easier
If you have poor credit due to negative items on your credit report, you can still get approved for an auto loan. Canada Auto Loan can help you do this by matching you with a dealership in your area that can work with your situation. Even if you're a newcomer to the country with no credit history, we can assist you in finding a financing solution.
Our service is free of charge and applying with us places you under no obligation to buy anything. So, go ahead and fill out our simple and secure online application to get started today.