Bad Credit and Your Credit Score

January 23, 2010  |  Bad Credit

In Canada bad credit can really hurt your credit score. At Check Your Credit First Canada you can learn all about bad credit and what it means to your credit rating.

How Does Bad Credit Report to the Credit Bureau?

Bad credit in Canada reports to credit bureaus in different ways.

The most obvious way bad or past due credit reports to your credit file is by updating the status of your trade lines from up to date, to past due.

Loan trade lines report with a lettered and numbered credit rating. Trade line ratings report from 0 – 9, with 0 being “new with no history”, 1 being up to date and 9 being “write off”.

Here are some examples of trade lines reporting poorly in Canada:

  • Payments that are 30 days late report as R2 or I2
  • Payments 60 days late report as R3 or I3
  • 90 day late payments report as R4 or I4
  • 120 day late payments report as R5 or I5
  • Written off credit reports as R9 or I9 (credit trade line write off)
  • An I8 trade line represents a car loan repossession (vehicle repo)

Do Collections Report to the Credit Bureau?

Yes. Both paid and unpaid collections report to the credit bureau. A Canadian credit report has a special section dedicated to any collections reporting.

Does Bankruptcy Report on Credit Files?

Yes. Bankruptcy and consumer proposal are both reported to credit bureaus. A consumer with a bankruptcy or previous bankruptcy will have the following bankruptcy information visible on their credit report:

  • Trustee in Bankruptcy (The name of trustee that filed your bankruptcy)
  • Size of the bankruptcy liability
  • Dollar amount of assets included in the bankruptcy
  • Date the bankruptcy was filed
  • Date the bankruptcy was discharged

Does Bad Credit Lower my Credit Score?

There are a number of ways your credit score can take a hit in Canada and having bad credit is one of them. When a creditor reports a payment 30 days late or more, your credit rating on that trade line will change to match its current past due status. This affects your credit score negatively.

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