How Long Does Stuff Stay on Your Credit File?

Have you checked your credit file recently? You should.

Your credit file contains a listing of debit and credit payments and it includes public record information about how promptly you’ve paid bills, along with all the yucky stuff like collections, judgements and bankruptcies.

Typically credit agencies will keep a record of accounts that were paid and have no negative history for up to 20 years or for as long as you have a relationship with the company with which you did business. If you cancel an account, the credit agency has no way of maintaining a current and accurate credit file so they often delete credit information. That’s why when you cancel a credit card the credit history that goes with it disappears. If you have a long history with a credit card supplier and want to stop using that card, cut it up but don’t cancel the account until you’ve established a credit history on a new card.

Most people don’t realize that when a business makes an inquiry – when it checks your credit – that inquiry not only affects your credit score, but it stay on your file for 1-6 years depending on the type of inquiry.

Some credit-reporting agencies report the lenders’ rating of each of your credit history items on a scale of 1 to 9. A rating of “1? means you pay your bills within 30 days of the due date. A rating of “9? means that you never pay your bills at all or that you have made a consumer debt repayment proposal to the lender. A letter will also appear in front of the number: for example, I2, O2, R2. The letter stands for the type of the credit you are using.

“I” refers to an installment loan, such as for a car loan, where you borrow money once and repay it in fixed amounts, on a regular basis, for a specific period of time until the loan is paid off. “O” refers to open credit such as a line of credit, where you borrow money, as needed, up to a certain limit and the total balance is due at the end of each period. “R” refers to revolving credit, on which you make regular payments in varying amounts depending on the balance of your account, and can then borrow more money up to your credit limit. Credit cards are revolving credit.

If you’ve mucked up your credit, know that the record of your financial indiscretions will remain on your file for all who inquire to see for up to six years after you diddled around and defaulted on the account.

If you go through a debt repayment program, like that offered through credit counseling, the record will be removed from your file two years after you finish paying off your agreed upon amount, or six years after you defaulted on the account, whichever comes first. If you do a consumer proposal, the proposal and all accounts reported as satisfied through the proposal are removed from your file three years from the date you satisfied the proposal.

The amount of time a bankruptcy stays on file is dependent on where you live. Typically, if you live in BC, Yukon, NWT, Nunavut, Albert, Saskatchewan, Manitoba or Nova Scotia, the record will stay in place for six years from the date of discharge. In Ontario, Quebec, New Brunswick, PEI and Newfoundland and Labrador, it stays on record for seven years from the date of discharge. However, if you’ve gone bankrupt more than once, each will remain on your file for fourteen years from the date of discharge of each bankruptcy

If you get a judgement against you, the same rules apply ass with bankruptcy except for PEI, which keeps the record on file for ten years.

If you’ve been sent to collections, the record will be removed from your file six years after the date you defaulted on the account with the original creditor.??So if some collector calls you up after six years and says they’re trying to collect on the debt, they have no recourse and you can blow ‘em off. Your record is clear.

Check your credit files at least once a year to ensure the information is correct. Send a written request to one of the two major credit bureaus in Canada: Equifax Canada Inc. or Trans Union of Canada Inc. More information can be found online at www.equifax.ca and www.transunion.ca. There is no charge for this service if you ask for your record by mail. If you’re into instant gratification, you’ll have to pay a fee.

The longer you exhibit good credit behavior by paying your bills on time and managing your credit wisely, the more your credit rating will improve, until you once again achieve a favorable credit rating. And if you’ve got a good rating that’s been marred by inaccurate reporting, it’s your job to fix it.