How Long Does a Loan Stay on Your Credit Report?

Most items on a Canadian credit report have a fixed shelf life, and how long that shelf life is depends on what the item is. A consumer proposal stays on your credit report for three years after completion, or six years from filing, whichever comes first, and a first bankruptcy stays for six years after discharge (Office of the Superintendent of Bankruptcy Canada). Ordinary loan accounts and missed payments work differently again: their retention periods are set by each credit bureau's own published schedule rather than by insolvency law, which is why no single number covers every entry on your file.

Two clocks that get confused

There are two separate timers running on the same event, and conflating them causes most of the confusion around this topic. The first is retention — how long the item physically appears on your file. Once that period ends, the entry drops off and a lender pulling your report simply will not see it. The second is weight — how much a still-visible item affects how you are assessed. The Financial Consumer Agency of Canada explains the difference between the report (the record) and the score (a number calculated from it), and why two people with similar-looking records can be scored differently.

Retention is the part you can plan around. Weight is the part lenders decide for themselves, through their own underwriting policies.

Accounts and missed payments: what sets the drop-off date

Loans, credit cards and lines of credit are not covered by one federal retention rule. Each of the two national bureaus — Equifax Canada and TransUnion Canada — publishes its own retention schedule and applies it to the account-level information lenders report to it. That means the drop-off date for a late payment depends on which bureau is reporting it, what type of item it is, and the dates attached to that item. The FCAC sets out how to order a free copy of your report from each bureau and how to read what is on it.

The practical takeaway is to stop relying on rules of thumb. Look at your own report, find the dates attached to each item, and check the bureau's published schedule for that item type. Those dates are the evidence a lender actually sees.

What does not reset the clock

A persistent myth is that paying an old debt restarts its retention period from the date of payment. It generally does not. Retention is tied to the dates associated with the item itself — when the account was opened, and when the delinquency occurred — not to when you eventually cleared the balance. Payment changes the current status and the balance owing, which is worth something, but it does not erase the history.

• Bringing an account current stops further late notations being added. It does not remove late notations already reported.
• Paying a collection in full updates the balance to zero. The collection entry itself remains for its own retention period.
• Closing an account does not delete it. A long-held account in good standing can still help you, because length of history is part of how files are assessed.
• Disputing an item removes it only if the information is in fact wrong or cannot be verified. Accurate information stays.

Consumer proposals and bankruptcy

These two records have clearer rules, because they are legal proceedings as well as credit events. Only a licensed insolvency trustee can administer a consumer proposal or a bankruptcy, and trustees are regulated by the Office of the Superintendent of Bankruptcy Canada. Each filing produces a record that sits on your credit report separately from the individual debts included in it.

Why "whichever comes first" matters

A consumer proposal runs for a set period agreed at the time of filing. Because the retention rule is measured two ways — three years after completion, or six years from filing, whichever comes first — a longer proposal can drop off the report sooner after completion than a short one. If a proposal takes five years to complete, the six-year-from-filing measure arrives only about a year later. If it completes quickly, the three-year-after-completion measure is the one that governs. The OSB publishes material explaining how proposals and bankruptcies work and what the trustee's role is.

What a record on your file means when you apply

Lenders do not read a credit report the same way. Many assess it through their own scorecard plus a policy rulebook. Some will decline automatically where there is an open insolvency record; others will look at what has happened since — how long ago the event was, whether payments since then have been on time, and how much other debt sits in the file. Getting a loan on poor credit therefore depends less on the label attached to your file and more on which lender's policy you happen to be assessed under, and when.

Where a file is thin or damaged, the products available skew expensive, and the reason is straightforward: a lender pricing for a higher chance of default charges more to cover that risk. The extreme end of that is payday lending. Where a province licenses the model, federal regulations (SOR/2024-114) cap the cost of borrowing at $14 per $100 advanced, and some provinces set a lower cap that applies instead. Payday loans are generally up to $1,500 for a term of 62 days or less, which makes the annualised cost extremely high. Quebec does not license payday lending at all, which effectively prohibits the model there. At the outer edge, the Criminal Code sets the criminal rate of interest at 35% per year (s. 347), calculated using a defined method that aggregates interest and certain charges.

None of that is a recommendation. Rolling one short-term loan into the next is how people end up stuck, and anyone considering that route should weigh it against every other option first, including asking an existing lender about a payment arrangement.

How to check and correct your file

1. Order your free credit report from each of the two national bureaus. The FCAC explains how, and why you should look at both — they can differ.
2. Read the dates, not just the status. For each account, note the date opened, the date of last activity, the current status, and any collection line items.
3. Look for errors: a payment marked late that you made on time, an account that is not yours, a duplicate entry, or a debt shown as owing after it was settled.
4. Dispute errors in writing with the bureau that reported the item, and send supporting documents. If information cannot be verified, it should be corrected or removed.
5. If the item is accurate, accept that the only fix is time plus new positive history. No service can lawfully remove accurate information early, whatever it advertises.

Rebuilding while the record ages

Credit histories are not static. Recent behaviour carries more weight in most scoring models than an event from several years ago, which is why a record that has not yet dropped off does not freeze your file in place. What tends to move things forward:

• Payments made on time and reported to the bureau, which add current positive information.
• Accounts held for a long time and kept in good standing, which contribute length of history.
• Using a modest share of any available revolving limit rather than running it near the top.
• Building some activity at all — a file with nothing happening in it is hard to assess, which is its own problem.

Around insolvency specifically, the period after discharge or completion is what lenders examine most closely, because it is the only current evidence of how you handle credit. Whether to take on new credit during that window depends on individual circumstances, and for anything significant — a mortgage, a proposal, a bankruptcy — regulated professional advice is the right place to start.

loanwolf.ca is a matching and comparison service, not a lender. We do not make loans, set rates or make credit decisions; we connect you with lenders and licensed brokers who do. The lowest advertised rates on any comparison service, including ours, are only available to the most qualified applicants — the rate you are offered depends on your file, your income and the lender's own criteria.