Credit 101 – How Long Negative Blemishes Affect Your Credit Score — And What To Do About Them

Automotive Finance, Bad Credit, Credit Education

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Bad Credit Score

It’s hard to understand- your credit in Canada – sometimes, the factors that go into determining your credit score seem somewhat arbitrary. We’ve spoken before about some of the factors that determine a FICO score – repayment history, levels of debt, and so forth, but we haven’t discussed the specific types of negative blemishes that can affect your credit history.

There are many factors that can affect your credit history negatively. In this article, we’ll take a deep look at the most important blemishes, and discuss methods by which their impact can be mitigated.

Late Payments

Late payments are perhaps the most common problem affecting consumers in Canada. Because they’re common, their impact on your credit score isn’t too severe – to a point.

Generally, creditors are quite forgiving about late payments on your credit report if you pay within 30-60 days of the bill being overdue. However, if your debt goes to 90+ days without being paid, it’s going to have a much bigger impact on your credit score – and you risk being referred to a collections agency.

If you have some late payment blemishes on your credit score – but have been paying your debts down regularly since then – you may ask for a “goodwill adjustment” from a particular creditor. This simply involves requesting that the agency remove the negative blemishes from your credit report because you’ve since begun repaying your debt in full. A surprising amount of creditors will do so if you’re polite, and have been responsible in repaying your debts.

These blemishes usually persist for 5-7 years, though remaining timely in repaying other debts can help mitigate their effects, even if they’re not removed.

Debts Sent To Collection Agencies

After 90 or more days of delinquency on your debts, most creditors will begin employing collections agencies in an attempt to get you to render payments. This will be noted in your credit report – and has a significantly higher damaging effect than a simple late payment.

The best way to deal with collections agencies is to, well, pay! If you can, you can negotiate with credit agencies to repay your debts in full, or organize a more reasonable repayment plan. They are generally willing to work with you if it means that they will get paid in the end.

If you render payment in full, they may be willing to work to remove some of the negative marks on your credit report. Otherwise, these marks will last for approximately 5-7 years.

NOTE: if your account has already been “charged-off” (see below), rendering payment can actually have a negative impact on your score. Charge-offs mark your account as “settled”, but reopening an account by paying down the balance marks it as “active”, which can further negatively impact your credit score.


Charge-offs are one of the most severe ways that your credit can be impacted. These occur if a creditor closes your account, expecting no repayment through conventional means.

This usually occurs after 6 months of non-payment and non-communication. If appropriate, the creditor will then continue to use collections agencies or legal systems to get payment from the debtor.

A charge-off is a horrible thing for your credit score – and should be avoided at all costs, if possible. The negative impact of a charge-off will stay on your report for 7 years.

There is no truly “above-board” way to get rid of a charge-off. Some credit agencies will offer “pay for delete” plans whereupon they’ll remove negative information if you pay your debts – but these agreements go against most creditor policies. If a creditor offers this option to you, make sure you get a legally binding agreement, as it could be risky doing further business with this creditor.

Bankruptcies And Foreclosures

Bankruptcies and foreclosures can’t be fought in your credit report – their full negative impact will be felt, no matter what. Both bankruptcies and foreclosures remain on your FICO score for a full 7 years.

Though these judgements are devastating to your credit, their full impact will lessen over time. Your credit can be rebuilt over the intervening years by taking on small, smart debts and repaying them in full – auto loans and secured credit cards are good ways to help you rebuild your credit.

Got Bad Credit In Canada? Need A Car? Come To Ride Time!

At Ride Time, we understand how difficult it is to deal with a bad credit score in Canada.

If you’ve had some bad luck and suffered from a drop in credit, it can be tough to even open up a new credit card account – let alone get a car loan.

So we offer the best used cars in Winnipeg, and we have a network of lenders that can almost guarantee you a loan on a car – even if you have poor credit.

All that our lenders need is proof of employment for 3+ months, a $1500/month income before deductions, and valid driver’s license. If you can provide us with these three things, we can guarantee you a great rate on a fantastic vehicle.

So take a look at our online car listings. We have a huge selection of cars, we offer reasonable rates, and we can deliver your vehicle not just to the Winnipeg area – but anywhere in Canada, using our network of logistics and shipment services.

Don’t miss out on a car just because you have some credit blemishes. Talk to Ride Time today, and see what we can do for you.


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