Is it True That After 7 Years Your Credit is Clear?

Sort of. While information only stays on your credit file for a specified number of years, your credit file itself doesn’t reset every seven years. So depending on the dates when certain defaults or histories appeared on your file, that will affect when the information is removed from your file. 

How long does information remain on your credit file? 

The amount of time information remains on your credit file depends on the type of information. For example,

• Credit accounts will remain on your account while the account (or loan) is still open/being repaid. After the account is closed or the loan is paid back, it will remain on your file for two years. 
• Your repayment history will remain on your account for two years. Your credit file only holds 24 months of repayments for each account, meaning if you had a missed repayment 25 months ago, it should no longer be on your history.
• Credit enquiries from lenders or credit providers will show up on your account for five years after the enquiry date. 
• Defaults are payments that are worth $150 or more that are 60 days late. They will stay on your file for five years. Paying or settling the default won’t remove it from your file; however, your history should be reflected to show the payment or settlement.
• Serious credit infringement, such as obtaining credit by fraudulent means and not making payments for six months and your credit provider cannot get in touch with you, will remain on your report for seven years. 
• Court judgements requiring you to pay your lender or provider the remaining balance, fees, charges, and interest will remain on your file for five years after the judgement date.
•  Bankruptcies, depending on the type, will remain on your file for at least five years.

As seen above, your past financial mistakes won’t impact your credit forever. After a few years, they will disappear from your credit file. In the meantime, Mortgage House can help you obtain a competitive home loan even with bad credit. Once your credit score improves after defaults, missed payments, or other hardships are removed, we can help you refinance with a different lender if you choose.