How Long Does Bad Credit Stay on Your Record in Canada?

A bad mark on your credit report doesn't last forever. In Canada, each type of negative item has a legal retention period at the end of which the credit bureaus — Equifax and TransUnion — automatically remove it. Knowing those timelines helps you plan: you can often qualify for a mortgage through an alternative lender well before the item drops off, and build clean history on top of it in the meantime.

The short answer

In Canada, negative items typically stay on your credit report for 6 years from the date of last activity (Equifax) or 6–7 years (TransUnion). A bankruptcy stays for 6–7 years after discharge for a first bankruptcy, 14 years for a second. After that, lenders cannot see it — your score resets from whatever positive history you have built.

Retention periods by item type

The exact timelines vary slightly between Equifax and TransUnion, and can vary by province. The figures below are the most common Canadian rules:

• Late or missed payments: 6 years from the date of last activity.
• Collections: 6 years from the date of last activity on the original debt.
• Consumer proposals: 3 years after the proposal is satisfied (paid in full), or 6 years from the date it was filed — whichever is earlier.
• First bankruptcy: 6–7 years after the discharge date (varies by bureau and province).
• Second bankruptcy: 14 years after the discharge date.
• Hard inquiries: 3 years from the date of the inquiry.
• Judgments: 6–7 years from the filing date, in most provinces.

Note that the timer runs from last activity on the account — if you make a partial payment on an old collection, some bureaus reset the clock. Get advice before paying aged debts for this reason.

What the clock means for a mortgage

You do not have to wait for the item to disappear to qualify for a mortgage. Alternative lenders (B-lenders and private lenders) weigh your current income, down payment, and the property more heavily than your credit history. A mortgage broker can often find financing soon after a bankruptcy discharge or while a collection is still on file — you may pay a higher rate, but you can own and start building equity. Then refinance to a prime lender once the item ages off and your rebuilt credit qualifies you. See getting a mortgage after bankruptcy in Canada and bad credit mortgages in Ontario.

How to rebuild credit in parallel

You can actively improve your score while waiting for old items to age off:

• Open a secured credit card immediately and keep balances well under 30% of the limit.
• Add a second trade line— a small installment loan or RRSP loan — so two accounts are reporting positively.
• Pay every bill on time; payment history is the single largest factor in your score.
• Avoid applying for multiple products at once (each inquiry shows up).

See the full guide in how to rebuild credit for a mortgage in Canada.

Frequently asked questions

When does the 6-year timer start?

For most items it starts from the date of last activity — the last payment made, or the date the account was closed or charged off. For bankruptcy, it starts from the discharge date.

Does paying off a collection remove it from my credit report?

Paying satisfies the debt but does not automatically remove the entry. It stays on file until the retention period ends, though it updates to show a zero balance. Some collectors will negotiate a "pay for delete" arrangement — always get that in writing before paying.

Can I get a mortgage with bad credit in Canada?

Yes. Alternative lenders and private lenders can often approve mortgages where prime banks cannot, using a larger down payment and strong income to offset the credit risk. A mortgage broker is the fastest way to find which lenders will approve your file today. See bad credit mortgage options in Ontario.