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Collection Accounts on Your Credit Report: The 6-Year Timeline Canadians Need to Know
Collection accounts stay on your Canadian credit report for 6 years—whether you pay or not. Learn when your score drops, why paying doesn't remove the mark, and strategic options.
Marcus Chen · Debt Relief Expert
Key Takeaways
- Collections stay on credit report for 6 years from FIRST missed payment
- Paying a collection does NOT remove it—status changes to 'paid' but mark remains
- Score impact: 100-150 point drop when collection is first reported
- 6-year clock starts from first delinquency, not when sent to collections
- Consumer proposal shows R7 for 3 years after completion—often better than waiting out collections
A collection account can drop your credit score by 100-150 points and remain on your report for 6 years—whether you pay it or not. Understanding this timeline is critical before you decide how to handle collection calls.
How Long Do Collections Stay on Your Credit Report in Canada?
In Canada, collection accounts appear on your credit report for 6 years from the date of first delinquency—the first missed payment that eventually led to collections. This timeline applies to both Equifax and TransUnion across all provinces.
| Timeline Event | Credit Impact |
|---|---|
| First missed payment | Negative mark appears, score begins dropping |
| 90-180 days delinquent | Account sent to collections |
| Collection reported | Major score drop (100-150 points typical) |
| Years 1-3 | Highest negative impact on score |
| Years 4-5 | Impact gradually decreases |
| Year 6 | Entry automatically removed |
Key insight: The 6-year clock starts from your first missed payment, not when the account went to collections. If you missed payments for 6 months before collections, you’re already 6 months into your 6-year period.
Does Paying a Collection Remove It From My Credit Report?
One of the most common misconceptions: paying off a collection will remove it from your credit report. This is false.
When you pay a collection:
- Status changes from “unpaid collection” to “paid collection”
- The entry remains on your report for the full 6 years
- Your credit score sees minimal improvement (10-30 points typical)
- Future lenders still see you had a collection
The Damage Is Already Done: As Doug Hoyes, Licensed Insolvency Trustee, explains: “Your credit is already impaired. You’re already months, months, and months behind. So instead of worrying about your credit report which is already damaged, deal with the problem and be done with it.”
If you’re seeing warning signs you need a consumer proposal, addressing multiple collections through formal debt relief may be more effective than paying them individually.
Paid vs. Unpaid Collections: Credit Score Impact
| Factor | Unpaid Collection | Paid Collection |
|---|---|---|
| Credit report duration | 6 years | 6 years |
| Initial score impact | -100 to -150 points | -100 to -150 points |
| Ongoing impact | Severe | Slightly less severe |
| Lender perception | High risk | Still concerning |
| Mortgage approval | Difficult | Somewhat easier |
Newer credit scoring models (like FICO 9 and VantageScore 3.0) weight paid collections less heavily, but many Canadian lenders still use older models where paid and unpaid collections have similar impacts.
What’s the Difference Between Statute of Limitations and Credit Reporting?
These are two completely separate timelines that often confuse consumers:
| Factor | Statute of Limitations | Credit Reporting |
|---|---|---|
| What it affects | Legal action (lawsuits) | Credit score/report |
| Duration | 2-6 years (by province) | 6 years (nationwide) |
| Resets when you pay? | Yes (in most provinces) | May extend activity date |
| Provincial variation | Significant | None |
Example scenario:
- You have a $5,000 credit card debt in Ontario
- Last payment: January 2024
- Statute of limitations expires: January 2026 (2 years)
- Credit report entry removed: January 2030 (6 years)
After January 2026, the collector cannot sue you—but the collection remains on your credit report until 2030.
For complete provincial limitation details, see our statute of limitations guide.
When Does a Collection Hurt Your Credit Score the Most?
Collection impact isn’t constant over 6 years:
Initial Impact (Months 1-6)
- Score drop: 100-150 points typical
- Effect: Devastating to approval odds
- Fresh collections are the most damaging
Heavy Impact Period (Years 1-3)
- Score recovery: Minimal
- Effect: Most lenders will decline
- Mortgage approval extremely difficult
Declining Impact (Years 4-5)
- Score recovery: Gradual improvement possible
- Effect: Some lenders may approve with conditions
- Building positive credit history helps
Pre-Removal (Year 6)
- Score impact: Diminished but present
- Effect: Light at end of tunnel
- Score rebounds significantly after removal
Do Credit Reporting Rules Vary by Province?
While the 6-year reporting period is consistent nationwide, some provincial nuances exist:
Activity Date Resets
In some provinces, making a payment can update the “last activity” date, potentially extending how long the collection appears. This is distinct from the statute of limitations reset.
- Alberta: Payments may update the activity date, extending reporting
- British Columbia: Consumer Protection BC oversees credit reporting practices
- Ontario: Last activity date doesn’t typically reset the 6-year clock from original delinquency
- Quebec: Civil law jurisdiction with some reporting variations
Disputing Provincial Errors
Each province has different complaint mechanisms: Ontario (Ministry of Public and Business Service Delivery), BC (Consumer Protection BC), Alberta (Service Alberta), Quebec (Office de la protection du consommateur).
Should I Pay Off Old Collection Accounts?
This depends on several factors:
When Paying May Make Sense
- Mortgage applications: Many lenders require collections paid before approval
- Security clearances: Some jobs require clean credit
- Fresh collections: If recently sent to collections, damage is new regardless
- Ethical obligation: You believe in repaying what you owe
When Paying May NOT Make Sense
- Near the 6-year mark: If the collection will fall off in 6-12 months, payment provides minimal benefit
- Statute-barred debt: If collectors can no longer sue (see provincial limits), you’ve lost little leverage by not paying
- Multiple collections: Paying one while ignoring others shows inconsistency
- Debt buyers paid pennies: The collector may have paid 3-5 cents per dollar—negotiation room exists (see portfolio pricing)
- Ignoring strategically: Understand what happens if you ignore debt collectors before making this choice
Strategic Consideration: If you have multiple debts totaling $10,000+, a consumer proposal may reduce your total debt by 60-80% while providing legal protection. Use our calculator to estimate savings.
How Do I Negotiate with a Collection Agency?
If you decide to pay, never pay the full amount without negotiating.
Settlement Amounts by Debt Age
Your negotiation leverage depends on what the debt buyer paid for your account. Understanding how debt buyers price portfolios reveals why older debts settle for less:
| Debt Age | Typical Settlement Range | Why |
|---|---|---|
| 0-12 months | 50-70% of balance | Fresh debt, higher recovery expectations |
| 1-3 years | 30-50% of balance | Aged debt, lower portfolio price |
| 3+ years | 15-30% of balance | Debt buyers paid pennies for aged debt |
”Pay for Delete” Agreements
You can request that the collector remove the entry in exchange for payment. Important caveats:
- Not required: Collectors have no obligation to agree
- Credit bureaus discourage it: They want accurate reporting
- Get it in writing: Before paying, get written confirmation they’ll request removal
- May not work: Even with agreement, credit bureaus may refuse
Settlement Best Practices
- Request debt verification before discussing payment
- Negotiate in writing via email or certified mail
- Never give bank account access — use certified cheque or bank draft
- Get settlement terms in writing before paying
- Keep all documentation for your records
How Does Debt Buyer Pricing Affect My Negotiation Power?
Understanding how debt buyers pay 3-12 cents per dollar gives you negotiation leverage:
- A debt buyer who paid $300 for your $10,000 debt profits at any settlement above $300
- Older debts = lower purchase prices = more negotiation room
- Multiple prior collection attempts = deeply discounted portfolio = maximum flexibility
Can I Remove a Collection From My Credit Report?
Legitimate Removal Methods
- Wait 6 years: Automatic removal after the reporting period
- Dispute inaccuracies: Wrong amount, wrong person, or already paid
- Negotiate pay-for-delete: No guarantee but worth requesting
- File a bankruptcy or consumer proposal: Replaces collections with single entry
What You CAN’T Do
- Pay a “credit repair” company to remove accurate information
- Dispute accurate entries repeatedly hoping they’ll disappear
- Claim identity theft if the debt is legitimately yours
What Are My Options If Collections Are Overwhelming?
If collections are overwhelming, consider formal debt relief:
Consumer Proposal
- Reduces total debt by 60-80%
- Stops all collection activity immediately
- Single R7 rating replaces multiple R9 collections
- Removed from credit report 3 years after completion
Calculate your potential savings using our consumer proposal calculator. Once completed, you can rebuild your credit after a consumer proposal faster than waiting out multiple collections.
Bankruptcy
- Eliminates most unsecured debt
- Immediate protection from collectors
- Stays on credit report 6-7 years after discharge
- More serious long-term impact than proposals
Credit Counselling
- Debt management programs consolidate payments
- May reduce interest rates
- Doesn’t reduce principal owed
- Noted on credit report during program
What Should I Do About Collection Accounts on My Credit Report?
Collection accounts stay on your Canadian credit report for 6 years—paying changes the status but doesn’t remove the entry. Before paying old collections:
- Check the timeline: How many years until automatic removal?
- Verify the statute of limitations: Can they still sue you?
- Understand portfolio pricing: Negotiate from a position of knowledge
- Consider alternatives: A consumer proposal may provide better overall relief
- Assess harassment levels: Use our harassment score calculator to document collector behaviour
For debts under $10,000 close to the 6-year mark, waiting often makes sense. For larger debts or fresh collections, explore formal debt solutions through a Licensed Insolvency Trustee.
Related Reading
Frequently Asked Questions
Marcus Chen
Debt Relief Expert
I write about Canadian debt relief so you don’t have to wade through jargon or sales pitches. Consumer proposals, bankruptcy, CRA debt, and your rights—in plain language. Doing this since 2016 because the information should be out there.
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