Join millions of Canadians who have already trusted Loans Canada
Apply Now

Maybe the cable bill slid down behind the desk or the postal strike meant you didn’t receive your cell phone statement. Maybe an emergency expense popped up and you didn’t have the cash to pay your utilities last month. Whatever the reason, you didn’t make a payment on time. Do you know how this will affect your credit?

To answer that question, let’s look at how our creditworthiness is measured in Canada.

What Is A Credit Report?

Your credit reports contain personal information such as your Social Insurance number, date of birth, current and previous address, and employment history. It will also include detailed information about your credit accounts, credit history, and payment information.

When you apply for a mortgage or another type of credit, lenders may use your credit as part of their loan application process. Landlords may also want to check your credit when deciding whether or not to approve your rental application and employers may take a look before they choose to hire you (depending on the industry you work in).

Free Equifax credit score

What Is A Credit Score?

The credit reporting bureaus use credit information reported to them to calculate credit scores between 300-and 900. Credit providers can use this information as part of their approval process, typically to determine the likelihood that a borrower will make their payments on time. Credit scores higher than 660 are considered good and will generally make it easier to get approved for credit. If your score is lower, you might be seen as high risk. Exact numbers will vary, and lenders will look at factors other than your credit score.

It’s important to note that your payment history carries a lot of weight — up to about 35% of your credit scores.

Where Can You Get Your Credit Report In Canada?

Canada has two official credit reporting agencies, Equifax and TransUnion. You can get your credit report and credit scores with each of the credit bureaus online or by mail. With Equifax, users can access their credit report and Equifax credit score for free online or by requesting a paper copy. On the other hand, TransUnion offers users their consumer disclosure for free once a month. 

Other Ways To Get Your Credit Report

Recently, it has become even easier to gain access to your credit scores and credit report. There are countless companies that have teamed up with the credit bureaus to offer Canadians a way to check their credit report and scores. 

 CostCredit ScoreCredit Report 
CompareHub logoFreeYesYesVisit Site
Mogo logoFreeYesNoVisit Site
Borrowell logoFreeYesYesVisit Site
CreditKarma logoFreeYesYes-

How Do Late Payments Affect Credit Scores?

Late payments may have a negative impact on your credit scores, so you’ll want to avoid them if you can. However, you might be relieved to hear not every late payment will be recorded in your file. Moreover, each credit account on your file is assigned a number from 0-9 and depending on how late your payment is your credit rating will vary. 

Payments Less Than 30 Days Late

Generally payments less than 30 days late won’t be reported to the credit bureaus and thus won’t affect your credit. Accounts with late payments less than 30 days late will receive a credit rating of R1.  However, your lender or creditor may charge you a late penalty or increase your interest rate as a result. 

Payments 30 – 120 Days Late

If your late payment is more than 30 days late, it will be reported to the credit bureaus. This may negatively impact your credit scores. Moreover, depending on how late your payment is, it will receive a credit rating of R2 for payments 30-60 days late, R3 for payments 60-90 days late and R4 for payments 90-120 days late. Moreover, late payments recorded on your credit report can stay on your file for up to 3 to 6 years depending on the credit bureau. 

Payments More Than 120 Days Late

Accounts with late payments more than 120 days late may be charged off and sent to collections. This can severely negatively affect your credit and you’ll receive a credit rating of R9.

Account paid within 30 days of due dateR1
Account paid more than 30 days past the due date, not more than 60 days lateR2
Account paid more than 60 days past the due date, not more than 90 days lateR3
Account paid more than 90 days past the due date, not more than 120 days lateR4
Account paid 120 days late or more but had not yet received an R9.R5
Account in collections or bankruptcy.R9

How Late Payments Can Affect Your Credit And Ability To Get Credit?

If a late payment does make it to your credit report, its impact on your credit scores will depend on several factors:

  • How late? The longer it stays unpaid, the more negatively, it will affect your scores.
  • How frequent? Creditors will take note of whether this is a one-time occurrence or a habit that increases your level of risk.
  • How recent? Recently missed payments might be a red flag to a lender, suggesting you are having financial difficulty and may not be able to honour your debt.

How To Repair Your Credit Scores After A Late Payment?

No matter what mistakes you have made in the past, from a single missed payment to a full-on bankruptcy, you can always improve your credit scores. It may take time, but your patience and diligence will pay off. Here are some things you can do to help improve your credit scores:

  • Pay any missed bills, as soon as possible, before they hurt your score any more.
  • If you are missing payments because you can’t afford them, set up a budget and seek help if you need it, to get your finances back on track.
  • If disorganization is the issue, you can use calendars, phone reminders, account alerts, and automatic payments to help you get those payments in on time.
  • If you have credit, use it, but be sure to settle up before the payment due date. If you can’t pay off the entire balance, at least pay the minimum and always pay on time.
  • If you’re trying to rebuild your credit, apply for a secured credit card, where you pay a deposit before you can use it. The funds you provide may or may not be as high as your credit limit. Start with a small limit and use it responsibly.
  • It can be tempting, but you need to avoid maxing out your credit cards. Try to stay below 30% of your credit limit to avoid potentially harming your credit scores.

If you happen to move, make sure you update all your accounts with your new mailing address. That way, you avoid missing payments due to lost mail. You can also set up online accounts and notifications to ensure you see your bill or statement and pay it on time.

Rebuilding Your Credit FAQs

Can a secured credit card help me build credit? 

Yes, secured credit cards can help build your credit as payments are reported to one or both credit bureaus. As you build a positive payment history, it can help improve your credit scores. 

How long will it take to rebuild my credit? 

There’s no exact timeline on how long it can take to rebuild your credit. It depends on how well you manage your credit accounts. 

How can I build my credit after moving to Canada?

If you’re new to Canada, you can start building credit in a number of ways. There are many banks that offer credit products that are specialized for new immigrants

Keep Track Of Your Credit

Whether your credit score is poor or excellent, it is important to keep on top of your credit. For a fee, you can monitor your activity through Equifax or TransUnion. Some banks and credit card companies also provide monitoring services, sending you alerts when credit history inquiries are made or when potentially fraudulent activities occur.Watch for errors such as changes to your personal information or new accounts you don’t recognize and correct them immediately. Ensuring the accuracy of your credit information, regularly, can help keep your credit use in check and prevent difficulties and identity theft in the future.

Shari Talbot avatar on Loans Canada
Shari Talbot

Shari is a Freelance Writer, specializing in personal finance, business blog content and education. She enjoys taking complex information and putting it into a form the average consumer can understand. When she is not working, she homeschools her children, supports her husband in business, and enjoys traveling with her family.

More From This Author

Special Offers

More From Our Experts

https://loanscanada.ca/wp-content/uploads/2023/06/Fido-Refer-A-Friend.png
Fido Refer-A-Friend Program

By Lisa Rennie
Published on June 1, 2023

The Fido Refer-A-Friend program is unique. You can earn up to 5 free months of Fido cell service EVERY year. That is almost 50% off your bill.

https://loanscanada.ca/wp-content/uploads/2023/06/Assessed-value-vs.-market-value.png
Assessed Value vs. Market Value: How Does It Affect Your Home Equity?

By Mortgage Maestro

How do assessed value and market value differ? Find out how your market value and assessed value affects your home equity?

https://loanscanada.ca/wp-content/uploads/2019/11/Home-equity-loan-canada.png
How To Borrow Using Your Home Equity In 2023

By Lisa Rennie

Do you have equity in your home? Find out how you can get a home equity loan in Canada and how much you can borrow.

https://loanscanada.ca/wp-content/uploads/2023/05/Keepa-Review.png
Keepa – Amazon Price Tracker

By Bryan Daly

If you want to shop or sell on Amazon, you need to know about Keepa. Keepa is a browser extension that tracks Amazon prices and

https://loanscanada.ca/wp-content/uploads/2023/05/Used-car-loans.png
Should You Get a Loan for a Used Car?

By Bryan Daly

Used cars loan can help you purchase a car even if you can’t pay it outright. The question is, should you get a loan for a used car?

https://loanscanada.ca/wp-content/uploads/2021/12/Best-Credit-Cards-For-Low-Income-Earners.png
Best Credit Cards For Low Income Earners 2023

By Lisa Rennie

If you're worried about qualifying for a credit card because you have a low income, check out these credit cards for low income requirements and great...

https://loanscanada.ca/wp-content/uploads/2023/05/Credit-memo-canada-.png
Why Did You Recieve A Credit Memo In Canada?

By Bryan Daly

Have you ever received a credit memo in Canada? Wondering why you got it? If you’ve ever returned a product, you may receive a credit memo instead of ...

https://loanscanada.ca/wp-content/uploads/2020/04/Personal-Loan-Alternatives-.png
What Do You Need To Borrow Money In Canada?

By Lisa Rennie

When you need to borrow money, there are many options to choose from. But finding the right option can be hard. Let's find out which one is right for ...

Recognized As One Of Canada's Top Growing Companies

Loans Canada, the country's original loan comparison platform, is proud to be recognized as one of Canada's fastest growing companies by The Globe and Mail!

Read More

Why choose Loans Canada?

Apply Once &
Get Multiple Offers
Save Time
And Money
Get Your Free
Credit Score
Free
Service
Expert Tips
And Advice
Exclusive
Offers

Build Credit For Just $10/Month

With KOHO's prepaid card you can build a better credit score for just $10/month.

Koho Prepaid Credit Card