• Most types of negative information generally remain on your Equifax credit report for six years.
• Closed accounts that were paid as agreed remain on your Equifax credit report for up to 10 years after they were reported as “closed” by the lender.
• Hard inquiries may remain on your Equifax credit report for three years.

When it comes to credit reports, one of the most frequently asked questions is: How long does information stay on my Equifax credit report? The answer is that it depends on the type of information and whether it’s considered “positive” or “negative”. Negative information such as late or missed payments, accounts that have been sent to collection agencies, or a bankruptcy generally stays on credit reports for approximately six years. Here is a breakdown of some the different types of “negative” information and how long you can expect the information to be on your Equifax credit report:

• Late payments remain on a credit report for up to six years from the date reported. This is also known as a “previous high rate” based on the system used in Canada to rate payments. The late payment remains on your Equifax credit report even if you pay the past-due balance. For instance, if you had a late payment in April 2011, the late payment would come off your Equifax credit report in April 2017, six years after the date of the missed payment.
• Collection or charged-off accounts: If you have a late payment and don’t pay the past-due balance, the account could eventually be charged off by the original lender and assigned to a collection agency. If that happens, the entire collection account would be removed six years from the date of your last payment. If you pay the collection account before the six year period is up, it remains on your Equifax credit report, but the account may have less of an impact on your Equifax credit score.
• Bankruptcy stays on your Equifax credit report for six years after the discharge date, or seven years after the date filed without a discharge date. If a second bankruptcy is filed, the first reappears on your Equifax credit report, and both bankruptcies remain for 14 years after the discharge dates.
• Judgments are debts you owe because of a court action. This information stays on your Equifax credit report for six years.
• A registered consumer proposal is a legal agreement set up between you and your creditors, in which they agree to allow you to pay off a percentage of your debt. A consumer proposal will be removed from your Equifax credit report either three years after you’ve paid off all the debts according to the proposal, or six years from the date it was filed, whichever comes first.
• Secured loans remain on your Equifax credit report for six years from the date filed.
• Banking items, such as cheques returned for insufficient funds, remain on your Equifax credit report for six years from the date reported.

Here are some examples of “positive” information and how long it stays on your Equifax credit report:

• Active accounts are paid as agreed. Active credit accounts that are paid as agreed remain on your Equifax credit report as long as the account is open and the lender is reporting it.
• Closed accounts are paid as agreed. If the last status of the account is reported by the lender as paid as agreed, the account would stay on your Equifax credit report for up to 10 years from the date it was reported by the lender as closed to Equifax.

Lastly, hard inquiries result when a potential lender, creditor, or service provider requests a copy of your Equifax credit report in response to a request for credit or certain services. These can remain on your Equifax credit report for three years. Regularly checking your Equifax credit report is an important step to ensure your information is accurate and complete and confirm that any negative information falls off after the appropriate time period. You can order a free copy of your credit reports here

It is very important to understand financing and when is the right time to do so to protect yourself. We see too many people that go down this slippery slope after dealerships enticing the customer to come back after 6-12 months to get a lower interest rate and better vehicle.

What the dealership doesn’t talk about is that the loan you already have HAS TO BE PAID OUT so after such a short period of time, only interest has been paid down, in which almost nothing of the principle borrowed has been affected. So yes, they get you excited to finance a newer vehicle, at a lower interest rate, but ALL the negative equity gets rolled into the new financing!

Nothing builds credit faster than 36 perfect car payments, and we will work hard to help you get the vehicle and financing to start back on the road to the best credit available to you down the road! Depending on the term, and financing option (purchase financing versus a closed-end lease), the three year mark is important.

Purchase financing

• Average 72-80 month term.
• Benefit payments are usually lower.
• Downside, reaching break-even on the vehicle financed (current value of vehicle based on good condition, versus balance of loan amount owed) is about 5–6 years into the term.
• Downside, negative equity will be rolled into next financing (unless vehicle originally acquired through our custom-purchasing for client, in which case it should be minimal as we choose vehicles that will maintain a strong value).

Closed-end lease:

• Average 60-month term.
• Payments manageable based on budget and approval.
• Break-even on the vehicle financed on average (depending on type of vehicle, condition, mileage) is 3 years.
• Our preferred lease lender will allow an upgrade of vehicle, and if perfect payment history, offers lower interest rate in their loyalty program.
• As our preferred lease lender owns the asset, they do NOT have to pay themselves for negative equity into next financing.

Our experience in vehicle acquisition will allow us to offer the best value on a vehicle, regardless of purchase or lease financing. We focus on the unit that will maintain its value (based on client keeping unit maintained and in good condition), so that trade-ins will be favorable, and the best financing options presented to meet your budget, needs, and approval.