How Long Does Bad Credit Stay On The Credit Report

How Long Does Bad Credit Stay On The Credit Report

If you have ever made a late payment to credit, then you have probably asked yourself, "just how long will that item stay on my credit?"

Well, it really depends what type of bill you paid late and how late you paid it. There are four types of items that report to your credit report: - Revolving credit (credit cards, lines of credit) - Instalment credit (loans) - Collection items/Judgements - Bankruptcies/Proposals

Instalment and Revolving credit rate on a scale of one to nine - A rating of R1 or I1 for example, means that your account is up to date. Two represents 60 days arrears, three represents 90 days arrears, four represents 120 days arrears and five represents 150 days in arrears.

If you are one to five months in arrears and you pay your account up to date, your credit rating will return to a one. With that said, evidence of the late payment will remain on your credit for 6 years from when you pay it up to date.

Once a credit product is 180 days in arrears (6 months) it will report as a nine rating. Once this occurs, the item will remain on your credit for 6 years from the date it is paid off.

A collection item will remain on your credit for 6 years from the date it is paid in full.

Credit Counselling and Consumer Proposals remain on your credit for 3 years from the date they are paid in full.

Many people who fall seriously behind on their bills decide to wait, thinking that in "7 years" the items will magically fall of the credit bureau. With improved technology lenders are keeping Equifax much more current than they once did.

A defaulted item will remain on the credit report for 6 years from the date of last activity so as long as your creditor is updating the credit report regularly, it can actually appear there much longer than 7 years. Also, if the company assigns the account to collections you will have an even bigger problem to contend with because now two companies are reporting negative information about the same result.

For more information about how to build good credit and a strong financial profile please visit www.trueassess.com.

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