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How Long Does Bad Credit Stay on Your Credit Report?

Loan Express | April 28, 2021

Loan Express does not require credit checks, decline a loan based on a credit cheque, or affect the loan's approved amount. A credit score may only provide a higher available amount to the approved amount.  

The following content is for customer education and reference only.

It’s hardly news that having a bad credit score can make life difficult. Simple tasks like renting a new apartment, opening a new credit card, or meeting eligibility requirements for a car loan or a mortgage become next to impossible with bad credit. 

Why We Have Bad Credit

Why We Have Bad Credit

In Canada, the average credit score is currently 650, which falls somewhere between the ‘fair’ and ‘good’ categories, with anything over 760 considered ‘excellent.’ 3% of Canadians have credit scores below 520, with Canadians under 25 representing the majority of this group, and 15% of Canadians have a credit score of 520-680, a score considered poor enough that gaining access to credit products is challenging. There are numerous reasons you may end up having to deal with the realities of bad credit. 

1) Late Payments

Payment history is among the most important factors in determining your credit score. Even one late or missed payment can have a negative impact, and the more time that has passed since your overdue payment, the more significant the impact.

2) Using Too Much Available Credit

Your credit utilization ratio compares your credit limits to your credit card balances, looking at how much you've borrowed in relation to how much you could borrow. Using more than 30% of your available credit is considered a negative. 

3) Loans

While having a credit portfolio that’s less than varied won't cause a low credit score directly, having a variety of credit accounts (i.e. car loan, credit card, student loan, mortgage, etc.), which you pay off on time will raise your score.

4) Applying for Lots of Credit in a Short Time

Every time you open a new credit account, lenders make a hard inquiry to determine how much risk you pose. Hard inquiries remain in your file for two years and can cause your score to decrease slightly. 

5) Defaulting on Accounts

Defaulting on credit accounts can negatively impact your credit up to a decade. Foreclosure, bankruptcy, repossession, charge-offs and settled accounts can all show up on your account and drag that score way down.

How Long Does Bad Credit Last?

You may be wondering: how long does bad credit last? The answer is, it depends. If you take a passive approach and simply wait it out, it could take a decade! However, even then, without any effort made to replace your bad credit with good, you’ll end up with no credit, which isn’t any better. It doesn’t happen overnight, but with determination and diligence, you’re sure to move out of the red zone and into greener pastures!

How Long Does Bad Credit Last?

Tips on How to Improve Your Credit Report

  • Make bill payments on time. Paying all your monthly bills on time is central to boosting your credit score. If you have any overdue payments, bring them up to date, and then keep at it!
  • Pay off your debt. Even if you do it very slowly, begin reducing your credit card balances. This can be one of the fastest ways to see an improved credit score.
  • Dispute any inaccurate information. Mistakes happen, even on your credit report. Check your credit reports regularly to ensure the information displayed is correct. The sooner you dispute an error, the better off your score will be.
  • Set limits on new credit. The fewer new credit accounts you open, the fewer hard inquiries in your file, and the better off your credit will be.

Looking for a Loan?

At Loan Express, we understand that life happens, and that sometimes, all you need is a break so you can stop worrying and get back on track. Although our 5-minute smart loans will not affect your credit score, they are designed to get you out of a jam with fast and secure loans of up to $1500–no credit check necessary. Our loan services are available to all–regardless of how high or low your credit score may be. Contact Loan Express to learn more or to apply for an express loan today!