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How long does it take for bad debt to come off credit report?

Negative information, such as late payments or collections, stay on your credit report for approximately seven years, as do most other types of negative information, including paid tax liens. Bankruptcies and unpaid tax liens can stay on your credit report for up to 10 years.

How long does a bad debt stay on your credit report in Canada?

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).

How long does a debt settlement stay on your credit report?

Settled accounts are potentially negative and remain for seven years. Settling an account for less than the full balance owed is considered potentially negative because you did not repay the entire debt as agreed under the original contract.

Per Consumer Protection BC:

Your credit report is a summary of your credit history. It starts when you borrow money for the first time. Lenders send information about your accounts to credit reporting agencies to be included on your credit report. Businesses, organizations and individuals can use your credit report to help make decisions about many things including lending money to you, collecting a debt, renting a property, or offering you a job.

Your credit report contains a lot of important personal information so it is important to understand what can be reported and who can have access to this information.

The law covers what can be included in a credit report and who can see it. Individuals and businesses can have a credit report; the law applies to both.

What to look for on your credit report

Lenders use codes to send information to the credit bureaus about how and when you make payments. These codes have two parts:
  - a letter shows the type of credit you're using
  - a number shows when you make payments

You may see different codes on your credit report depending on how you make your payments for each account.

What the letters mean in a rating on a credit report

I    ----   Installment Credit
             You borrow money for a specific period of time. You make regular payments in fixed amounts until you

             pay off the loan. ie: Car Loan


O   ----  Open status credit

              You may borrow money when you need to, up to a certain limit. ie: Mobile phone account


R   ----   Revolving or recurring credit
               You borrow money for a specific period of time. You make regular payments in fixed amounts until you pay

               off the loan. ie: Credit Care


M   ----  Mortgage loan
               Mortgage information may be included on your credit report. ie: Mortgage

What numbers mean in a rating on a credit report

0   ---   Too new to rate. Approved, but not yet used

1   ---   Paid within 30 days of billing, Pays as agreed

2   ---   Late payment: 31 to 59 days late

3   ---   Late payment: 60 to 89 days late

4   ---   Late payment: 90 to 119 days late

5   ---   Late payment: more than 120 days late, but not yet rated “9”

6   ---   This code isn’t used

7   ---   Making regular payments using one of the following debt management options:
             - a consolidation order
             - orderly payment of debts
             - consumer proposal
             - debt management program with a credit counselling agency

8   ---   Repossession

9   ---   Written off as a “bad debt”
             - Sent to collection agency
             - Bankruptcy

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